Qantas (QF, Sydney Kingsford Smith) will pay AUD120 million Australian dollars (USD75 million) to 1,820 ground workers it sacked illegally in 2020. The airline and the Transport Workers Union (TWU) announced they had reached an agreement on the matter on December 17.

The agreement follows an Australian Federal Court ruling in October that proposed compensation amounts and sent the two sides back to the negotiation table to nut out a settlement deal. As recently as last week, the TWU said talks were at a stalemate.

“Delivering justice to these workers is just the first step in turning Qantas around,” said TWU National Secretary Michael Kaine following this week’s announcement.

Qantas outsourced the jobs to third-party groundhandlers, who offered to reemploy many of the workers on lesser salaries. In a statement, Qantas Group CEO Vanessa Hudson said the settlement was important. “I want to reiterate our sincere apologies to those impacted and their families,” she said.

Qantas sacked the workers as part of an AUD1 billion (USD620 million) cost-cutting exercise blamed on the pandemic. In a 2021 ruling, the Federal Court found that the then CEO of Qantas Group, Alan Joyce, used the cover of COVID to kick off a pre-planned programme to cut costs and de-unionise much of its workforce. Joyce, known for his hardball stance on industrial relations, has since left the airline.

The ruling said the sackings were illegal and contravened Australia’s Fair Work Act. However, Qantas appealed that decision to the Federal Court appeals bench and, later, the High Court. It lost both appeals. The airline and the TWU have spent over 12 months trying to determine how much Qantas should pay the workers.

In his October 2024 ruling, Justice Michael Lee said individual compensation amounts should range from AUD30,000 to AUD100,000 (USD18,620-62,000). Lee capped the compensation payments at about 12 months' pay. He said the workers would likely have been sacked within that time, even if the pandemic had not happened, given the cost-cutting agenda in place. However, Lee’s proposed amounts also included non-economic losses suffered related to hardship and distress.

Qantas and the TWU have agreed to establish a compensation fund, which will be administered by Melbourne-based legal firm Maurice Blackburn on behalf of the union, to pay out the compensation to the former employees.

The fund will be established in early 2025. The compensation amounts will cover both economic and non-economic loss, compensation to the TWU, and the costs incurred managing the distribution of the funds to individuals.