19/02/2025
The Federal Court has made clear in Transport Workers Union of Australia v Qantas Airways Limited [2024] FCA 1216 that employers may be required to pay significant compensation for both economic and non-economic loss such as distress, hurt and humiliation, where that loss results from unlawful action under the Fair Work Act 2009 (Cth) (FW Act).
Background Facts
On 30 November 2020 Qantas outsourced ground handling operations work at ten Australian airports to several third-party ground handling companies and as a result made Qantas-employed ground handlers redundant.
The Transport Workers’ Union of Australia challenged the outsourcing decision and alleged Qantas made the workers redundant because of an “anticipated” workplace right – being the workers ability to engage in protected industrial action and enterprise bargaining in the future – and therefore the action constituted adverse action under the FW Act.
The Federal Court found in July 2021 that the “redundancies” constituted adverse action in contravention of the FW Act. Qantas unsuccessfully appealed this decision and in May 2022 the appeal upheld the original decision.
The question as to compensation for impacted employees was then decided in October 2024.
Compensation decision
The Court considered what compensatory relief was available to affected employees and specifically whether damages could be paid for non-economic loss that was caused by Qantas’s unlawful employment decision.
Three employees were provided as test cases of the losses experienced by employees.
Each asserted a combination of impacts that resulted from the unlawful adverse action, including emotional hurt, humiliation, distress, and anger, that manifested for each of them in different ways – including an inability to sleep, panic attacks, adverse impacts on personal relationships with children and their husband, nausea, anxiety, and in one case major psychiatric illness including major depression, suicidal ideation, low mood and sleep disturbance.
The Federal Court found:
- employees can be compensated for non-economic loss under the FW Act that arises from an unlawful employment decision in contravention of the FW Act
- compensation orders can be made for non-economic loss such as distress, hurt, humiliation, significant psychological harm (such as anxiety, depression or emotional distress), or other emotional harm
- employees are not required to establish that the only cause of the harm was the unlawful employment decision, provided they can show it was one cause of the loss or damage.
This resulted in Qantas establishing a $120 million compensation fund for the 1,820 impacted workers.
Conclusion
This decision highlights that the Federal Court is willing and able to compensate employees for non-economic loss caused in part or in whole by unlawful employment decisions, in addition to economic loss and this compensation can be significant.
It is critical if you are considering termination, restructure or redundancy that this being done for the right reasons and in a lawful way.
Our team of employment lawyers are available to provide advice on these matters any time, contact us here: