INSIGHT

Federal Court opts to rule on Qantas stand down case

By Veronica Siow, Tarsha Gavin
Employment & Safety

In brief 2 min read

The Federal Court has decided to adjudicate a dispute between Qantas and its aircraft engineers about the legality of Qantas' and Jetstar's decision to stand down employees during the COVID-19 pandemic.

How does it affect you

Many employers have stood down their employees without pay in recent times because of the impact of COVID-19. The outcome of this dispute will be significant to help assess whether some of those stand-down decisions were, in fact, unlawful.

What was the dispute about?

As part of broader stand downs affecting two-thirds of its workforce, Qantas and its budget subsidiary Jetstar (together, the Airlines) stood down without pay a number of licensed aircraft maintenance engineers purportedly in accordance with the Airlines' enterprise agreements (EAs). On 26 March 2020, the Australian Licensed Aircraft Engineers Association (ALAEA) challenged the legality of the Airlines'  decision in the Fair Work Commission (FWC), arguing that the Airlines had not demonstrated:

  • that the relevant engineers could not be usefully employed; and/or
  • that there was a stoppage of work for which the Airlines could not reasonably be held responsible.

In response, the Airlines applied to the Federal Court to restrain the FWC from arbitrating the dispute. The Airlines argued that the FWC had no jurisdiction to arbitrate the dispute because (the Airlines say) ALAEA had not followed the dispute resolution procedures that were set out in the EAs. The Airlines also argued that even if the ALAEA had followed those procedures in the EAs, the ALAEA's dispute before the FWC was broader and, therefore, a different dispute than that raised by the ALAEA previously.

Outcome – the Federal Court to decide

The Federal Court decided that it (and not the FWC) should hear the dispute since many other businesses have stood down employees in the wake of the COVID-19 pandemic, and that stand-down and dispute resolution clauses in enterprise agreements are often drafted in similar terms to the clauses in question. It was in the public's interest to have a court ruling on the question of the lawfulness of the stand-down decisions in this matter.

The proceedings are continuing in the Federal Court. We will report back on the decision when the court hears the matter and hands down its decision.