Key lessons for employers responding to adverse action claims: TWU v Qantas Airways Limited

After an unsuccessful appeal to the High Court of Australia, in the latest instalment of the litigation in the matter of the Transport Workers’ Union of Australia v Qantas (TWU case), the airline was recently ordered by the Federal Court of Australia to pay a civil penalty of $120 million, for contravening the general protections in Part 3-1 of the Fair Work Act 2009 (Cth) (FW Act).

The civil penalty imposed by the Federal Court is a record high for a claim in the Fair Work jurisdiction. It is payable on top of a $90 million compensation bill to former employees and TWU members who were unlawfully dismissed in an ill-fated workforce restructure implemented during the COVID-19 pandemic, following a settlement reached by Qantas with the union in early 2025.

In today’s industrial relations environment, employers are frequently called upon to respond to general protections claims by former employees alleging they were subjected to unlawful dismissal because of the existence or exercise of workplace rights. Unlike unfair dismissal claims, the evidentiary burden to disprove a general protections dismissal claim usually shifts to the employer.

In this article we discuss the TWU case and what employers and their corporate decision-makers should be aware of.

The background

On 30 November 2020, while its operations were severely affected by the COVID-19 pandemic, Qantas announced a decision to outsource its ground handling operations at 10 Australian airports (outsourcing decision).

The effect of the outsourcing decision was that ground handling services previously being performed by Qantas employees (many of whom were members of the TWU), would instead be performed by third-party contractors. Qantas had sound commercial reasons for the outsourcing decision.

Importantly, enterprise agreements which applied to the employees affected by the outsourcing decision would reach their nominal expiry soon after implementation, i.e. in the month of December 2020. The legal significance of this was that, after the nominal expiry dates, the employees could commence organising, engage in protected industrial action and participate in enterprise bargaining (additional reasons).

High Court of Australia

On appeal to the High Court, Qantas only challenged whether the primary judge and a Full Court of the Federal Court were correct in finding that its outsourcing decision breached section 340(1)(b) of the FW Act, which provides that a person must not take adverse action against another person "to prevent the exercise of a workplace right by the other person".

The High Court held that the readily ascertainable meaning of s 340(1)(b) is to proscribe the taking of adverse action against another person if a substantial and operative reason for the action is to prevent the other person exercising a presently held or future workplace right.

This was explained in the High Court’s reasoning as follows: “To "prevent the exercise of a workplace right" encompasses stopping or putting an obstacle in the way of the exercise of a presently held right. But equally, it encompasses putting an obstacle in the way of exercising a right that may arise at some future date.”

Liability decision

Section 361 of the FW Act establishes a rebuttable presumption that the adverse action was taken for the reason alleged, or with the intent alleged, if taking action for that reason or with that intent would constitute a contravention of Part 3-1 of the FW Act (which includes s340). 

The evidentiary presumption in s 361 recognises that the decision maker is uniquely placed to know the reasons for their action and should thus be made to prove them. An employer can discharge that onus by proving that none of its substantial and operative reasons for the adverse action was to prevent the exercise of workplace rights.

Despite Qantas' sound commercial reasons for the outsourcing decision, the primary judge was not satisfied that the CEO decision-maker was "not subjectively conscious of other considerations" and concluded that Qantas had not discharged its onus under s 361 of the FW Act, to disprove the additional reasons were substantive and operative in the decision- making process.

Qantas failed to rebut the presumption because its witness evidence on this point was not accepted in material respects. Of particular significance, a key document with handwritten notations obtained during the discovery process, confirmed that the general management committee informing the CEO decision maker about the outsourcing decision and possible alternatives had been discussing and obtaining external legal advice about “open EBAs”, which is a short hand expression for enterprise agreements which had reached their nominal expiry date.

Future workplace rights and considerations

Judicial members at various stages of the TWU case have made pertinent observations of general importance about the law in relevant respects and practical considerations for employers. Two examples are reproduced below.

On the matter of consideration of future workplace rights and corporate decision making, Gordon and Edelman JJ of the High Court of Australia observed that:

“Finally, nothing in these reasons should be understood as suggesting that employers are prevented from considering the existence and terms of enterprise agreements in making decisions about the future. In fact, to fail to do so might in some circumstances constitute a breach of duty. There is no legal or practical difficulty in allowing such a matter to be considered by a decision maker. However, what is not permissible, and what s 340(1)(b) protects against, is the taking of adverse action to prevent the exercise of a workplace right, whether presently existing or not. If Qantas had established, for example, that its reason for the outsourcing decision was to generate substantial savings in order to address imminent liquidity issues (with the inevitable consequence of that decision being termination of employment of staff), and that its reasons did not include a substantial and operative reason of preventing the employees affected by the outsourcing decision from organising and engaging in protected industrial action, then the outsourcing decision would not have been for a proscribed or prohibited purpose (and the termination would not have been unlawful under s 340). Qantas did not do so.”

On the matter of discharging the evidentiary onus of proof, Lee J of the Federal Court of Australia warned employers about the perils of reverse engineering evidence to support their decisions:

"It seems to me there are different rules that apply in Fair Work cases when it comes to putting together evidence. … It was all through the prism of, 'we're going to structure this in a way where which is best to withstand a general protections challenge in the Federal Court'."

Implications

It is clear that the law is settled in the following fundamental respects:

1. An employer who takes adverse action against an employee for the substantial and operative reason of preventing the exercise of a workplace right by the employee, contravenes s340(1)(b) of the FW Act, regardless of whether the employee has the relevant workplace right at the time the adverse action is taken. This will still be the case even where there are sound commercial reasons for the employer making the decision, which gives rise to the adverse action.
2. An employer will not be able to discharge the burden of disproving the claim, if the evidence of the decision maker or other key persons involved in informing the decision-making process is found to be unreliable in material respects.