Qantas (ASX:QAN) in trouble for pocketing JobKeeper

Federal Court rules against Qantas in a decision that could have ramifications for all Australian businesses that have relied on JobKeeper.
The post Qantas (ASX:QAN) in trouble for pocketing JobKeeper appeared first on Motley Fool Australia. –

qantas pilot putting hands to her face as if distraught

Qantas Airways Limited (ASX: QAN) has lost a Federal Court case regarding the way it handled JobKeeper payments.

In a decision that could also affect other businesses that have utilised JobKeeper to improve their bottom lines, the court ruled the airline misused the COVID-19 assistance scheme.

The case brought on by unions concerned penalty wages paid in arrears and whether they could be counted towards the $1,500 JobKeeper payment for that second fortnight.

For example, a Qantas worker performs $2,500 worth of overtime in fortnight number 1. Penalties are paid in arrears so they receive nothing out of Qantas’ pocket but do receive $1,500 from JobKeeper.

Then in fortnight number 2, the worker doesn’t do any shifts but receives the $2,500 they’re owed from the previous period.

Qantas’ argument was that the $2,500 counts towards the JobKeeper allowance for fortnight 2. So the airline has been giving such workers just the $2,500 while the company keeps the $1,500 from the government assistance.

The Federal Court disagreed with Qantas on Thursday, and ruled that employees should be receiving both the $1,500 and $2,500 for fortnight number 2.

The court’s logic was that money owed for work from other periods can’t be counted towards JobKeeper for the fortnight of payment. That is, JobKeeper can only offset wages earned in the same fortnight.

Many Australian businesses could owe backpay

Qantas has a large workforce on shifts, fortnightly pay and ‘period on and period off’ cycles due to the nature of the aviation industry.

The court has yet to decide on remediation orders. But Thursday’s decision could mean the airline is up for a large backpay bill.

“The judgment will likely have adverse implications for all companies receiving JobKeeper, who are already reeling from the impacts of COVID,” stated Qantas.

Justice Geoffrey Flick acknowledged his decision could result in a “windfall” for employees.

“It remains a matter for the legislature to ‘tweak’ or adjust the scheme if it sees fit,” he said in the ruling.

According to Qantas, it had followed ATO guidance in handing out the ‘safety net’ assistance of $1,500 per fortnight.

“That ‘safety net’ assurance is a central part of the government’s JobKeeper policy,” the airline stated. “Today’s judgement appears to cut across that principle.”

The ruling especially impacts 8,000 Qantas workers terminated this year, as they would not have had subsequent fortnights to make up for the shortfall.

Qantas has 28 days to appeal to the full Federal Court, which it is “carefully considering”. 

The Australian Services Union has vowed it would “fight this all the way if we need to”.

“This is money stood-down Qantas workers desperately need. Qantas should do the right thing by its workers and promise to pay you what you are owed as soon as possible,” stated the union.

“This is money that Qantas workers will spend in their local businesses, helping our economy to bounce back as soon as possible.”

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Qantas (ASX:QAN) in trouble for pocketing JobKeeper appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!