Emboldened by Qantas penalty, Australian union says more bad bosses are in its sights

SYDNEY - Flush with cash after an unprecedented legal victory over Qantas Airways, union boss Michael Kaine is warning other big businesses: Break Australia’s employment laws at your peril.

The Federal Court of Australia on Aug 18 fined Qantas A$90 million (S$74.5 million), a record penalty for workplace wrongdoing, for illegally sacking almost 2,000 ground workers during the Covid-19 pandemic. More than half – A$50 million – was awarded to the Transport Workers’ Union (TWU), with the presiding judge encouraging it and other unions to act as enforcers of industrial relations legislation.

Mr Kaine, the TWU national secretary, said he is now better funded and ready to take up Justice Michael Lee’s challenge. Corporations in his crosshairs include those that abuse workers’ rights, turn a blind eye to underpaying wages, or do not have adequate payroll systems in place.

“They should be on notice,” Mr Kaine, 56, said. “We will now have some more resources to deploy.”

Salary underpayment is rife as even some of Australia’s biggest companies struggle to navigate, or choose to ignore, complex rules governing varying wage rates and obligatory pension contributions. Commonwealth Bank of Australia, Woolworths Group and Insurance Australia Group have all been fined in recent years for failing to comply with entitlements.

This week, National Australia Bank, which has grappled for years with employee underpayments, said staff payment errors will cost it another A$130 million.

For each underpaid worker, major employers can be fined as much as A$5 million, or triple the underpayment – whichever is greater, according to current penalty rates. That means penalties for large-scale transgressions could stretch to hundreds of millions of dollars.

Australia’s workplace relations regulator, the Fair Work Ombudsman, recovered A$473 million for almost 160,000 underpaid workers in the last fiscal year. Back-payments to staff total A$1.5 billion in the past three years.

The A$50 million award to TWU, which has about 60,000 members, represents a tipping point in workplace relations. After deducting legal costs, the union will be left with about A$40 million, which is equivalent to a year of membership dues, said Mr Kaine.

The union’s national management committee will meet on Aug 21 to start assessing where to deploy the “significant amount of money”, he said.

Mr Kaine’s immediate focus is on employees in aviation and road transport, including truck, bus and ride-share drivers, and food-delivery workers. But he said it is possible that some of the Qantas penalty is used to finance union battles in other industries – if the employer’s conduct has the potential “to come back and bite any worker”. 

The union’s legal battle with Qantas kicked off after the airline outsourced ground-handling operations at 10 Australian airports in late 2020, under then-chief executive officer Alan Joyce. TWU argued that the ground staff were axed to avoid looming negotiations over pay and conditions and potential strikes – a breach of the Fair Work Act. BLOOMBERG