Qantas (QF, Sydney Kingsford Smith) has lost a last-ditch appeal to Australia's High Court that sought to overturn a 2021 lower court ruling that the airline had illegally outsourced its ground-handling units at ten airports in 2020, a decision that saw 1,683 people lose their jobs at the airline. The High Court handed down its highly anticipated decision on September 13, 2023.

The outsourcing decision resulted in ground-handling services, then being performed by the heavily unionised employees of Qantas and Qantas Ground Services Pty Ltd, being outsourced to third-party firms, namely Swissport, dnata, and Menzies. In response to the move, the Transport Worker's Union took Qantas to court on behalf of its affected members.

While Australia's top court agreed with a previous Federal Court ruling that Qantas had sound commercial reasons for the outsourcing decision, it also found that there were additional reasons that were "substantial and operative," including preventing the affected employees from exercising workplace rights to organise and engage in protected industrial action and to participate in bargaining.

The union welcomed the High Court's decision, with senior members in Canberra for the judgement. "This landmark decision to deny an appeal by Qantas against previous rulings by the Federal Court makes it categorically clear that the airline took unlawful action under the Fair Work Act in November 2020 when it outsourced more than 1600 ground-handling staff," reads a statement issued by the union following the court's ruling.

In its statement, Qantas said it acknowledged and accepted the court's decision. "The decision to outsource the remainder of the airline's ground handling function was made in August 2020, when borders were closed, lockdowns were in place, and no COVID vaccine existed," the airline's statement reads. "The likelihood of a years' long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover. As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected, and we sincerely apologise for that."

Qantas now faces a significant financial penalty expected to exceed AUD200 million Australian dollars (USD128.5 million) for breaching Australia's industrial relations and workplace laws. The airline will also likely be required to cover the TWU's legal costs and compensate its former employees for illegally sacking them. Within hours of the ruling, Qantas advised that it would begin talks with the TWU “to discuss reaching agreement on a settlement for the people involved as reasonably and quickly as possible.”

"A prior decision by the Federal Court has ruled out reinstatement of workers but it will now consider penalties for the breach and compensation for relevant employees, which will factor in redundancy payments already made by Qantas," the airline's statement added.

The High Court's ruling continues a wave of negative publicity for the Australian flag carrier, which is under sustained attack by local media for its recent practices, including selling tickets on thousands of cancelled flights, attempting to pocket customer's money from flights cancelled during the pandemic, allegedly hoarding slots at Sydney Airport to deter competition and benefiting from an Australian government decision to block Qatar Airways (QR, Doha Hamad International) from additional capacity rights into certain airports. After fifteen years in the role, Qantas Group CEO Alan Joyce stepped down two months ahead of schedule earlier this month and is replaced by former Qantas Group CFO Vanessa Hudson, who publicly so far has struck a far humbler tone than her predecessor.