Qantas deemed determination to illegally fireplace 1700 employees had ‘low’ authorized danger

A Qantas government has revealed the airline believed its determination to fireplace 1700 employees carried a low stage of authorized danger, a conclusion that has been torpedoed as the corporate prepares to compensate former staffers.

Former Qantas chief operations officer Colin Hughes fronted the Federal Court docket on Tuesday amid a battle between his former employer and the Transport Employees Union.

The union and the airline are engaged in a heated debate about compensation payouts for 1700 employees who had been illegally sacked by Qantas in November 2020.

Earlier than the choice was introduced months earlier, Mr Hughes mentioned Qantas had been suggested the chance of authorized repercussions was low.

He met with attorneys from Herbert Smith Freehills concerning the proposal in June 2020 alongside different executives, who outlined the necessity to drastically cut back prices.

Mr Hughes mentioned the preliminary recommendation from the attorneys was “outsourcing isn’t inherently illegal” however the airline wanted to have “sound industrial causes” to justify the motion.

He advised the courtroom the attorneys warned the airline to make sure it was protected towards hostile motion claims prone to be introduced over the choice, and cautioned it to not breach any agreements.

“(They mentioned to) count on a problem,” the previous Qantas COO recounted.

“I don’t suppose we would have liked that recommendation. It wasn’t a revelatory piece of knowledge.”

In a second assembly every week later, he mentioned the attorneys advised Qantas executives that the explanations for outsourcing, which targeted on slicing prices, had been “authentic authorized causes”.

“We understood there have been actually no authorized limitations to progressing and the authorized danger was low,” Mr Hughes mentioned.

He conceded the attorneys had not used the phrase “low danger” however clarified it was his personal “characterisation primarily based on what I heard”.

The courtroom heard Mr Hughes was requested to transient former Qantas Airways Chief Government Officer Alan Joyce concerning the dangers, commerce offs, and advantages related to the proposal. 

“The advantages had been clear, the dangers had been much less clear,” he mentioned. 

After contemplating recommendation from the attorneys and varied different events, he concluded the authorized danger and danger to operational continuity had been each low.

Nonetheless, the chance of frightening a authorities response and endangering Qantas’ model and fame was rated as excessive.

Finally, Qantas determined the “compelling” monetary advantages of saving $100m outweighed the dangers.

It proceeded with the choice to fireplace 1700 workers and outsource their roles to 3rd celebration contractors, which was later discovered to be unlawful.

Mr Hughes gave proof on the third day of a listening to that may decide the quantity of compensation Qantas pays its former floor companies staff.

The TWU has estimated the airline should pay “many, many hundreds of thousands” in compensation for what it has declared to be the biggest case of unlawful sackings in Australia’s company historical past.

Qantas contends its payout ought to solely lengthen to 12 months past April 2021 as a result of the staff would have misplaced their jobs the subsequent 12 months anyway.

Regardless of the illegality of the choice, Mr Hughes maintained he would have made the identical advice to outsource in 2021. 

He mentioned he needed to contemplate the airline’s restoration by saving $100m after the harm wrought by the pandemic and border closures. 

“It will have been nearly illogical for me to not have that place,” he mentioned. 

“I can’t consider any Qantas supervisor who wouldn’t have really useful consideration of the proposal.”

Learn associated subjects:Qantas

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Qantas proposed outsourcing floor companies roles two years earlier than illegally firing 1700 employees