The High Court today ruled on Qantas’ appeal in relation to a claim by the Transport Workers’ Union (“TWU”) that Qantas engaged in adverse action because of a future workplace right when it decided to outsource ground handling operations. The High Court dismissed the appeal, finding that Qantas did take adverse action against those employees for a prohibited reason.
The full decision can be read here.[1]
The High Court has published its judgment in Qantas Airways Ltd v Transport Workers Union of Australia,[2] in relation to whether Qantas took unlawful adverse action against ground staff workers when it decided to outsource ground staff work in 2020.
This EMA Note provides a brief summary of the High Court’s decision and what it means for employers.
Background
In November 2020, following from the significant impacts of the COVID-19 pandemic, Qantas decided to outsource ground handling work, affecting some 1,700 roles. In its detailed planning process leading to this decision, there was an annotation in a document stating that, at the end of December 2020, Qantas’ agreement would pass its nominal expiry date, in which case the TWU would be able to bargain and take protected industrial action.
The Federal Court in the first instance, and the Full Federal Court in the second instance, found that the TWU’s ability to take industrial action in the future was in the mind of the decision-maker (that is, he was ‘subjectively conscious’ of it) and therefore formed part of the reason to outsource. This was held to be a contravention of the general protections provisions of the FW Act, as the ability to take protected industrial action (a protected right) formed part of the reason to make the employees redundant.
High Court Appeal
The FW Act provides various ‘general protections’, including a person taking ‘adverse action’ against another person for certain proscribed reasons. One such proscribed reason is because the person has a workplace right.
In general, a person must have a workplace right to be protected. At the time of the outsourcing decision, employees did not have a benefit or entitlement under a workplace law. However, there is also a protection against action taken if a substantial and operative reason for taking the action ‘is to prevent the exercise of a workplace right’ by a person.[3] The High Court found that this specific protection includes future workplace rights.[4]
On this basis, the High Court unanimously rejected Qantas’ appeal and upheld the Full Federal Court’s decision, finding that Qantas did take adverse action against the relevant employees because of a workplace right to engage (in the future) in protected industrial action.
What Does This Mean for Employers?
So does this mean that, in making business decisions, employers cannot consider any current or future entitlements or terms and conditions of employment? To put it simply—no, that is not what the High Court’s decision means.
Adverse action taken with a mere awareness of a workplace right will not offend the FW Act, but action taken because of that right will.[5] The reason that Qantas’ case failed was because it had to prove, to the satisfaction of the court, that the reasons for its decision to outsource did not include the substantial and operative reason of preventing employees from being able to take protected industrial action in the future. The court was not satisfied that Qantas proved this.
Justices Gordon and Edelman provide this useful takeaway for employers (emphasis in original, citations omitted):[6]
Nothing in these reasons should be understood as suggesting that employers are prevented from considering the existence and terms of enterprise agreements in making decisions about the future. In fact, to fail to do so might in some circumstances constitute a breach of duty. There is no legal or practical difficulty in allowing such a matter to be considered by a decision maker. However, what is not permissible… is the taking of adverse action to prevent the exercise of a workplace right, whether presently existing or not. If Qantas had established, for example, that its reason for the outsourcing decision was to generate substantial savings in order to address imminent liquidity issues (with the inevitable consequence of that decision being termination of employment of staff), and that its reasons did not include a substantial and operative reason of preventing the employees affected by the outsourcing decision from organising and engaging in protected industrial action, then the outsourcing decision would not have been for a proscribed or prohibited purpose…
It is therefore clear that employers can (and, to some extent, may be required to) consider the existence of current terms, entitlements, and rights when making business decisions. However, the employer must not make any decisions to the disadvantage of those employees because of those terms, entitlements, and rights—whether currently existing or not.
[1] See the High Court’s summary here.
[2] [2023] HCA 27.
[3] Fair Work Act 2009 (Cth) s 340(1)(b).
[4] [2023] HCA 27 [41]–[46], [57]; [64]–[65].
[5] [2023] HCA 27 [41].
[6] [2023] HCA 27 [88].
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EMA Consulting is not a law firm and therefore does not provide legal advice or services. The information contained within this document and associated material is general in nature and should not be relied upon. If you require specific advice on a particular matter, we recommend that you contact EMAC on 08 8203 1700. Subject to the matter at hand, your EMAC Consultant may recommend that you obtain formal legal advice. If formal legal advice is required, upon your written instruction EMAC will brief your matter to a legal practitioner for this purpose. The contents of this document and associated materials do not represent legal advice.