Qantas Airways has been ordered to pay A$90 million (US$59 million) in penalties after Australia’s Federal Court found it illegally laid off nearly 1,800 ground staff during the Covid-19 pandemic. The fine, confirmed on Monday, marks the largest corporate penalty for employment law breaches in Australian history, according to Reuters and Bloomberg.

The case stems from a decision in August 2020, when Qantas outsourced baggage handling and cleaning jobs across 10 airports as international borders remained shut and vaccines were not yet widely available. The airline had argued at the time that the move was driven by “commercial imperatives,” but the court later ruled that the outsourcing was unlawful because it denied employees their legal rights to collectively bargain or take industrial action.

Justice Michael Lee, delivering judgment, said the penalty was intended to act as a “real deterrence” for any companies tempted to prioritise financial rewards over compliance with workplace laws, The Guardian Australia reported.

Qantas had previously lost an appeal against the ruling, prolonging a legal fight that has lasted more than five years. The Transport Workers’ Union (TWU), which brought the case forward, described the court’s decision as a landmark win for labour rights.

“This is a final victory for Qantas workers and a clear message to corporate Australia,” TWU National Secretary Michael Kaine said in comments cited by The Sydney Morning Herald. “Qantas was not sorry to workers when it illegally outsourced them — many were told over a loudspeaker in a lunchroom. It is only sorry now that it must pay the largest penalty fine of any employer in Australian corporate history.”

The penalty will be split, with A$50 million allocated to the TWU and A$40 million held for future payments to former workers. This comes on top of a separate A$120 million compensation settlement agreed last year, meaning Qantas faces a total financial outlay of A$210 million linked to the case.

For many employees, the decision offers closure. “It has been five long years. Today is a victory, not just for our colleagues but for all Australian workers,” said Anne Guirguis, a former aircraft cleaner who spent 27 years at Qantas before losing her job, speaking to ABC News Australia.

Qantas, often branded the “Spirit of Australia,” has faced mounting reputational challenges in recent years, including consumer complaints about soaring ticket prices, service disruptions, and accusations of selling tickets for flights that had already been cancelled.

Chief Executive Vanessa Hudson, who took over in 2023 after Alan Joyce’s early departure, issued an apology following the ruling. “The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families. We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result,” Hudson said in a statement published by Reuters.

Hudson added that the airline had spent the past 18 months working to “rebuild trust” with both staff and customers. “This remains our highest priority as we work to earn back the trust we lost.”

For Qantas, the fine closes a bruising legal chapter but underscores the scale of reputational repair still ahead.