The balance of the penalty imposed on Qantas over its ground handling outsourcing is to be paid to affected workers within days, calculated on each person’s length of service rather than on compensation that is still to be assessed.
Justice Lee made the orders in open court on 6 August 2026 and published reasons on 17 August 2026 in Transport Workers’ Union of Australia v Qantas Airways Limited (Settlement Administration) [2026] FCA 1160.
In August 2025 the Court ordered Qantas to pay a $90 million penalty over the outsourcing of its ground handling operations, conduct found to have contravened s 340(1)(b) of the Fair Work Act 2009 (Cth). Of that sum, $50 million went to the Transport Workers’ Union and the remaining $40 million was placed in an interest-bearing controlled monies account held by the Court with National Australia Bank.
Orders made on 19 December 2025 provided for an interim payment of $3,333 to each affected worker then registered in the settlement scheme, with the rest, about $35 million plus interest, to be divided later in proportion to compensation assessed under the scheme once that administration was complete. Those orders were vacated on 6 August 2026.
At a glance
- Parties: Transport Workers’ Union of Australia v Qantas Airways Limited and Qantas Ground Services Pty Ltd
- Citation: [2026] FCA 1160 (Lee J), Fair Work Division, NSD 1309 of 2020
- Provisions: Fair Work Act 2009 (Cth) ss 539, 545, 546(3); Federal Court of Australia Act 1976 (Cth) ss 23, 57; Health and Other Services (Compensation) Act 1995 (Cth) ss 3, 32
- Outcome: Distribution of the residual penalty uncoupled from the compensation scheme and ordered to be paid by reference to tenure
- Who it affects: Workers terminated or redeployed as a result of the outsourcing decision who had registered for the settlement scheme by 6pm on 6 August 2026, plus the test case individuals
The Court had earlier queried the stalled payout in Transport Workers’ Union of Australia v Qantas Airways Limited (Administration Extension Application) [2026] FCA 1013. The latest reasons identify two principal problems that had left the scheme administrator, Maurice Blackburn, unable to give a date for payment of compensation.
The first involves reports prepared by independent medical examiners for barristers assessing non-economic loss. From 17 June 2026 the administrator was in discussions with an external medico-legal provider about 111 reports said to be deficient. Those 111 sat within a group of 171 reports produced by a single examiner, out of roughly 600 needed for the non-economic loss assessments. By about 3 July 2026 the administrator had concluded that 60 affected workers could be assessed on reports already in hand, 58 had diagnoses that were unclear but could be fixed by supplementary reports, and 53 needed fresh assessments.
The second involves possible repayment obligations under the Health and Other Services (Compensation) Act 1995 (Cth), which in substance bars a compensation payer from paying out compensation until the required notice has issued. Maurice Blackburn wrote to Services Australia about the issue on 11 July 2025, and a conference followed on 14 May 2026 involving the administrator, Qantas, Services Australia and the Australian Government Solicitor. Justice Lee recorded that the administrator has consistently maintained that neither it nor Qantas owes any repayment obligation, but has decided, on legal advice, to pursue a negotiated arrangement rather than seek a determination, a process it expects will take some months.
Justice Lee observed that the administrator, not having been appointed by the Court, “regarded it as inappropriate or unnecessary to seek the intervention of the Court to resolve” the problems, and that “early intervention by the Court, which would have occurred in a Pt IVA class action, could have allowed the Scheme to be administered with far greater despatch”. He noted that the safeguards of a Part IVA representative proceeding, including approval of any settlement by the Court under s 33V and the power to replace a representative applicant under s 33T, are absent from the procedure used by a union suing under the Fair Work Act.
- 18 Aug 2025 $90 million penalty ordered, $50 million paid to the TWU and $40 million paid into a Court-controlled account.
- 19 Dec 2025 Orders for $3,333 interim payments and for the residual penalty to follow assessed compensation.
- 28 Jul 2026 Administrator files interlocutory application to vary the December orders.
- 6 Aug 2026 Orders made uncoupling the residual penalty and directing distribution by tenure.
- 17 Aug 2026 Reasons published.
through independent barristers appointed to represent the workers’ interests that “there is no difficulty as to power in now taking a different course”, and put forward tenure as the basis for dividing the residual penalty. The TWU backed that approach.
that an equal split of the residual amount among affected workers would be fairer. The 43-year-old worker, who appeared on his own behalf and for other interested persons, argued that younger workers, or those with only limited service before the contravening conduct ended their employment, “may have expected a long career at Qantas and have been deprived of that opportunity”. Justice Lee said: “That point has real substance.”
that tenure was the preferable basis. It “introduces no complication” because years of service are already on record and require nothing further from workers, and, the payment not being compensation, “tenure is a relatively good proxy for age”. He accepted that any method would be an approximation.
“To persist with it now would be a counsel of perfection at the cost of practical justice and further delay in getting a very substantial sum into the hands of the workers.” Justice Lee on continuing to tie the penalty to assessed compensation.
Under the orders, the available fund is the account balance less any further amici costs approved by the Court. From that fund, $3,333 is deducted for each worker who did not receive the December 2025 interim payment, and the remainder is divided by applying to each worker their years of service as a proportion of the combined years of service of all affected workers, expressed as a percentage to five decimal places. Workers who missed the interim payment then have $3,333 added to the amount calculated. Payment does not depend on a worker having signed a deed of release (an agreement giving up further claims) in favour of the Qantas Group, and receiving it does not affect any entitlement under the compensation scheme.
Shares for deceased workers and for workers subject to guardianship arrangements are to be paid to a principal solicitor of William Roberts Lawyers, appointed receiver under s 57 of the Federal Court of Australia Act 1976 (Cth), to hold and then pay over to the legal personal representative or authorised person once identified. The administrator gave undertakings to meet the amici curiae’s costs of the 29 July and 6 August 2026 listings and not to recover those costs, or its own costs of those listings, from the settlement fund. The Court has already approved and paid $169,317.50 in amici costs.
The notice to be sent to affected workers directs questions about the penalty payment to William Roberts Lawyers at QantasWorkers@williamroberts.com.au or 02 9552 2111, and questions about the compensation scheme to Maurice Blackburn at qantascase@mauriceblackburn.com.au or 1800 716 855.
The compensation scheme continues separately. The administrator expects to send estimated notices of assessed compensation around October 2026, and the proceeding has been re-listed for the first week of December 2026 for the administrator to report on the scheme’s status, including progress on economic and non-economic loss assessments, and to propose a timetable for completing the administration.
Source: [2026] FCA 1160
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