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Qantas sign-on bonus alleged to be adverse action

By Charles Power on November 27th, 2019
  1. Industrial Instruments
  2. Enterprise Agreements


In 2018 Qantas offered a bonus ($2,500 for full-time employees and $2,000 for part time employees). One of the conditions for receiving the cash component of bonus was that new enterprise agreement was voted up and approved. This has had the effect of delaying the cash bonus payment for employees who are not employed under an enterprise agreement (the non-EBA employees received their payment in September 2018).

Qantas also reserved the right ‘not to award the bonus to an employee group that engages in any action that harms the Qantas Group or any Qantas Group Company, or on other reasonable grounds’.

In June 2019, unions commenced a general protections claim against Qantas (naming its executive manager in employee relations as an accessory). They argued the conditions for the bonus amounted to a threat to withhold the bonus if employees exercised workplace rights to bargain and/or take protected industrial action in support of claims for the new enterprise agreements. The unions argued this was an unlawful threat to take adverse action if employees exercised their workplace rights.

The claim raises a legal issue that frequently arises in adverse action cases. If Qantas was to withhold a bonus to a group of employees engaging in lawful protected action because of the harm caused by the action, it would no doubt argue that the fact the lawful protected action was taken had nothing to do with the decision to withhold the bonus. Instead they would argue it was the impact of the action that motivated the exercise of the discretion not to pay the bonus. It would then be up to the Court to discern whether the effect of industrial action could be sensibly disentangled from the action itself in determining what was in the mind of the decision-maker.

A secondary issue is whether the threat to withhold payment of a bonus, to which a discretion to pay is expressly predicated on satisfaction of certain conditions, can amount to adverse action.  An employer takes adverse action against an employee if it discriminates between the employee and other employees. Is this discrimination or less favourable treatment of Qantas taking lawful industrial action because they are taking the action or because of the effect of it?  It might be indirect discrimination in that striking Qantas employees are less likely to meet the condition – however it is not yet settled that the general protections provisions contemplate indirect discrimination.

A separate feature of the bonus is that it is expressed to be inclusive of any required superannuation contribution. Superannuation Guarantee contributions are deducted from the $2,000 or $1,500 bonus amount e.g. a full-time employee with a 10% superannuation contribution rate will receive a superannuation contribution of $181.82 and a gross cash payment of $1,818.18 less tax. Qantas asserts it can do this, despite the fact that a bonus cash payment is ordinary time earnings for the purposes of the Superannuation Guarantee (Administration) Act.

Arguably, if an employer states an employee will be eligible for a cash bonus of a certain amount and a decision is made to award that bonus, then Superannuation Guarantee contributions are payable on top of that amount, unless it is made expressly clear to the employee that the actual cash amount of the bonus will be grossed down to offset the SG liability.

Even inadvertent adverse action can result in a costly claim

Regardless of the size of your company.

Do you know exactly what constitutes adverse action and when it is unlawful?

Find out by reading the Employment Law Practical Handbook on Portner Digital.

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