EMA Note

High Court Rules that Qantas Did Take Adverse Action in relation to a Future Potential Right

The High Court today ruled on Qantasโ€™ appeal in relation to a claim by the Transport Workersโ€™ Union (โ€œTWUโ€) 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 readย here.1


The High Court has published its judgment inย Qantas Airways Ltd v Transport Workers Union of Australia,2ย 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 Courtโ€™s decision and what it means for employers.

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, Qantasโ€™ 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 TWUโ€™s ability to take industrial action in the future was in the mind of the decision-maker (that is, he was โ€˜subjectively consciousโ€™ 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.

The FW Act provides various โ€˜general protectionsโ€™, including a person taking โ€˜adverse actionโ€™ against another person for certain proscribed reasons.  One such proscribed reason is because the person has a workplace right.

In general, a person mustย haveย a workplace right to be protected.ย  At the time of the outsourcing decision, employees did not have a benefit or entitlement under a workplace law.ย  However, there is also a protection against action taken if a substantial and operative reason for taking the action โ€˜is to prevent the exercise of a workplace rightโ€™ by a person.3ย  The High Court found that this specific protection includes future workplace rights.4

On this basis, the High Court unanimously rejected Qantasโ€™ appeal and upheld the Full Federal Courtโ€™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.

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 simplyโ€”no, that is not what the High Courtโ€™s decision means.

Adverse action taken with a mere awareness of a workplace right will not offend the FW Act, but action takenย because of that rightย will.5ย  The reason that Qantasโ€™ case failed was because it had to prove, to the satisfaction of the court, that the reasons for its decision to outsourceย did not includeย the substantial and operative reason of preventing employees from being able to take protected industrial action in the future.ย  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 permissibleโ€ฆ 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 rightsโ€”whether currently existing or not.

  1. See the High Courtโ€™s summaryย here. โ†ฉ๏ธŽ
  2. [2023] HCA 27. โ†ฉ๏ธŽ
  3. Fair Work Act 2009ย (Cth) s 340(1)(b). โ†ฉ๏ธŽ
  4. [2023] HCA 27 [41]โ€“[46], [57]; [64]โ€“[65]. โ†ฉ๏ธŽ
  5. [2023] HCA 27 [41]. โ†ฉ๏ธŽ
  6. [2023] HCA 27 [88]. โ†ฉ๏ธŽ