The Federal Court of Australia has handed Qantas a win after ruling the airline was within its rights to stand down hundreds of employees at the start of the pandemic.
In a landmark ruling that could potentially set precedent for a number of high profile worker’s rights cases, the Federal Court said that Qantas’ move to stand down hundreds of aircraft engineers without pay did not violate contractual agreements, as the airline acted on the government’s travel restrictions.
Throughout the month of March, Qantas moved to stand down 450 aircraft engineers without pay that were working for Qantas and its budget subsidiary, Jetstar.
The ABC’s Jamie McKinnell has written that the case is “being closely watched for its likely ramifications outside aviation,” adding that “Qantas sought a declaration from the court that the stoppage of work was for reasons it could not be held reasonably responsible for.”
Charles Power, an employment law partner has told the AFR that the case “arguably was a lowering of the bar for stand downs,” adding that “the stand down would still require a strong direct causal relationship between the pandemic and the stoppage of work.”
The Australian Licenced Aircraft Engineers Association (ALAEA) has said that the drop in passenger numbers does not represent an adequate excuse for standing down nearly two-thirds of its engineering staff. Barrister for the association, Lucy Sanders has argued that it was well within Qantas’ control to stand down the engineers, suggesting the stand-down order was in violation of the Fair Work Act.
The Fair Work Act states that employers are within their rights to stand down employees without pay if there is a severe disruption to an organisation’s operations that is out of the control of that employer, and if those employees can no longer be usefully employed.
“As good and reasonable as a business decision as it may have been, this is fundamentally an event within the airline’s control,” a spokesperson for the union has said. “It is a stoppage arising from a voluntary change in business operations, not a matter entirely out of the airlines’ hands.”
However, Justice Geoffrey Flick ruled that Qantas was within its rights – and not in violation of contractual obligations – to stand down the engineers after government-imposed travel restrictions eviscerated travel demand. He said that Sanders’ suggestion was “disingenuous,” but added the stand-down clause invoked in employee’s contracts was “hopefully unique and never to be repeated.”
Justice Flick said the airline was acting in line with the government’s medical guidelines to curb the number of overseas arrivals spreading the COVID-19 virus that resulted in a “dramatic downturn” in customers for Qantas.
“It was an economic reality forced upon the airlines by reason of the global pandemic and the conduct of the Commonwealth, state and territory governments in restricting travel and movement,” Flick said.
“The facts of the present case, it is respectfully concluded, come nowhere close to a situation where other steps could reasonably have been pursued by Qantas or Jetstar.”
QC Rowena Orr, acting as Barrister for Qantas said that COVID-19 and the subsequent travel restrictions “challenged the very viability” of Qantas and the entire aviation sector.
Orr has told the Federal Court that if Qantas had continued its operations without stand-down orders and reductions to its schedule, the airline had just eight-to-ten weeks of financial reserves. She argued that Qantas had exhausted its cost-cutting measures before looking to stand down the aviation engineers.
Shortly after the Federal Court’s ruling, Qantas issued a statement saying that “standing down our workers as travel demand collapsed due to factors outside of our control wasn’t a decision we took lightly.”
“We did it because the alternative would have been to burn cash and put the whole company at risk,” Qantas added, labelling calls from the union as “ridiculous,” and concluding that “it’s frustrating that the union continues to waste their members’ money and the court’s time on vexatious legal challenges.”
Federal Secretary of the ALAEA, Steve Purvinas told the Australian Financial Review that there “is ample work to do on aircraft because they are on the ground and have requirements for maintenance.”
“Our members have been told there is no work for them while other members are being told you have too much work and we’re calling people on overtime or we’re using contractors to supplement the excessive amount of work done on our aircraft.”