In brief

In Qantas Airways Limited v Transport Workers Union of Australia [2023] HCA 27, the High Court of Australia has dismissed an appeal by Qantas Airways Ltd (Qantas) relating to the decision by Qantas to outsource its ground handling operations at ten Australian airports during the height of the COVID-19 pandemic, finding that Qantas took adverse action against employees when making its decision.

Facts

On 30 November 2020, while its operations were severely affected by the COVID-19 pandemic, Qantas announced a decision to outsource its ground handling operations at ten Australian airports. Qantas had experienced an almost total reduction in travelling passengers and a very significant reduction on its domestic networks. From February 2020, Australian governments implemented progressive restrictions first on international travel, and then on domestic travel. By May 2020, Qantas' management identified the outsourcing of Qantas' remaining ground handling operations as one option to keep the airline financially viable.

At the time of the making and announcement of the outsourcing decision, some of the affected Qantas employees were prohibited from organising or engaging in protected industrial action under the FW Act because their enterprise agreement had not passed its nominal expiry date and some others were practically unable to take protected industrial action of any significance because the complex steps necessary to engage in protected industrial action under the FW Act had not been taken.

The effect of the outsourcing decision was that ground handling services being performed by employees of Qantas, many of whom were members of the Transport Workers Union of Australia, would instead be performed by staff of third-party suppliers contracted to provide those services.

How adverse action laws applied to the outsourcing decision

Section 340(1)(b) of the Fair Work Act 2009 (Cth) (FW Act) provides that a person must not take adverse action against another person "to prevent the exercise of a workplace right by the other person". A person has a workplace right "if the person ... is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument".

It was found that Qantas took adverse action against the affected employees in making the outsourcing decision. At the time of the outsourcing decision, some of the affected employees were prohibited from organising or engaging in protected industrial action under the FW Act because the enterprise agreement which applied to the employees had not reached its nominal expiry date, while some of the other employers were practically unable to take protected industrial action.

The primary judge in the Federal Court found that, while Qantas had "commercial imperatives" for making the outsourcing decision, Qantas had not discharged its onus under s 361 of the FW Act of disproving that the reasons for the outsourcing decision included preventing employees from engaging in protected industrial action and participating in enterprise bargaining (which are “workplace rights” under the FW Act).

The issue before the High Court was whether the adverse action laws under the FW Act prohibited employers taking adverse action against another person for the purpose of preventing the exercise of a workplace right that might arise in the future. The High Court unanimously held that it did, holding that workplace rights can be “forward looking” and adverse action can be taken for a substantial and operative reason of preventing the future exercise of a workplace right by employees, regardless of whether the employee have the relevant workplace right at the time the adverse action is taken.

Implications of the High Court decision

It is clear from the High Court decision that employers will need to take care when making decisions which might include strategies that would have the effect of preventing employees from exercising workplace rights which they might take in the future, such as taking protected industrial action under an enterprise agreement.

However, if an employer can discharge the reverse onus under adverse action laws and disprove an allegation that a substantial and operative reason for a decision was to prevent employees from exercising a future workplace right, then there will be no breach of the FW Act. Qantas was unable to meet this evidentiary test.

The High Court has indicated that alleged reasons which “involve remote or improbable circumstances” may allow an employer to readily rebut the reverse onus of proof in proceedings of this nature.

Take away tip

Given the significant complexity and evolution of adverse action laws under the FW Act, employers are recommended to seek legal advice before making major decisions which could impact on “contingent or accruing” workplace rights an employee may exercise in the future or which may potentially take into account multiple overlapping or intersecting reasons.