Flying in the face of employment law: The consequences

Australian airline Qantas has failed in their high court bid, to overturn a ruling that the carrier breached Australia’s Fair Work Act by illegally outsourcing 1,700 jobs in November 2020.

Qantas has apologised for letting go baggage handlers and cleaners across ten airports and outsourcing labour. However, it maintains that the dismissal, which was ruled illegal and upheld unanimously by Australia’s high court, was necessary from a financial perspective due to the pandemic.

Australia’s Fair Work Act ensures that workers have the right to “engage in protected industrial action and…bargaining,” with the court ruling that, in this instance, workers had been denied this right. Michael Kaine, the Transport Workers’ Union national secretary, noted that Qantas was responsible for "the largest sacking found to be illegal" in Australian history – and that workers would now seek significant compensation in court.

The case, which is a major win for workers, and has publicly tarnished the reputation of the airline, serves to highlight the moral and legal importance of adhering to employment and termination laws. By deliberately breaching Australia’s Fair Work Act, Qantas not only denied their employees the rights to which they are entitled, but it also left itself open to legal action and large financial penalties. In addition, the controversy has seen Qantas boss Alan Joyce announcing his departure from the company, as well as calls from the Transport Workers’ Union for the entire Qantas board to be replaced.

Larger issue

This particular instance of illegal dismissal and outsourcing speaks to the larger issue of misclassification and non-compliance. These illegal practices are relatively common, and, whether engaged in deliberately , to cut corners and costs, or accidentally, due to misunderstanding of local legislation, they put both businesses and their employees at risk.

When an employee is employed as an independent contractor rather than a full-time employee, they are not entitled to the benefits and protections of a full-time employee, and are vulnerable to discrimination and mistreatment. Many high-profile companies such as Nike, Uber, and Grubhub have recently faced penalties for misclassification – further proving that even industry giants are not immune to legal ramifications, if found to have broken the law.

Similarly, when an employee’s rights, such as those surrounding the event of dismissal, are not respected, this not only leaves the employee unemployed and denied their right to industrial action and compensation, but it also leaves the business open to legal action.

When a company makes a decision that it believes will be financially beneficial in the short-term, without considering the legalities,  and potential long-term outcomes, that company leaves itself vulnerable to legal action, reputational damage for both the company and individual high-profile employees, large financial penalties, and more. It is key when making a decision to terminate a worker or workers, that there is valid reason to do so, and that, if doing so, the rights of the worker or workers are upheld and respected, and all appropriate processes are followed.

If you are thinking of hiring abroad, Mauve Group’s Employer of Record (EoR) service can help. With solutions available in more than 150 countries, our team of experts compliantly hire and support your workforce – in adherence with all local employment law, ensuring that all regulations are followed and worker rights respected. Contact us to learn more.