37.
- providing workplace relations laws that are fair to working Australians, promote job security and gender equality, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations".
There was evidence before the primary judge that the decision by QAL to outsource the ground handling operations was based upon three commercial imperatives: (a) the achievement of two-year cost targets by a reduction in operating costs; (b) a need to increase variability in the cost base; and (c) a concern to minimise capital expenditure, grow customer confidence and deliver ongoing business improvement. Stating commercial objectives in this way – using language of high generality – is unlikely to be of utility. Of greater concrete reality is the fact, as already mentioned, that it was estimated by QAL that outsourcing its ground handling operations would save it around $100 million per year. Following the making of the outsourcing decision, Mr David sent a communication to employees, which set out more relevant detail about what had occurred. Amongst other things, Mr David wrote that because of the COVID-19 pandemic:
"We face a huge task to recover from this crisis and we need to make fundamental changes across the Group.
For ground operations, we need to solve for three challenges – lower our overall cost of ground handling operations (by outsourcing we anticipated saving around $100 million annually based on pre-COVID flying), avoid large spending on equipment (calculated at $80 million over 5 years) and match our ground handling services with fluctuating levels of demand."
In considering how to achieve its commercial objectives, QAL invited the TWU to make an in-house bid to continue ground handling operations internally. But it was rejected in favour of specialist third-party ground handlers; seemingly, the TWU never had much hope of being the winning bidder. As Mr David explained in his communication:
"The TWU national in-house bid was unsuccessful because it didn't outline a plan or any real detail for how costs savings would be practically achieved. The bid was also unable to solve the challenge to avoid large spending on equipment and matching our ground handling services with fluctuating levels of demand.
In contrast, teams at some airports presented a number of ideas to deliver our ground handling services more efficiently. Unfortunately, they were only able to identify $18 million in savings compared to external suppliers who can solve all three challenges, including an overall reduction in annual ground handling costs of approximately $103 million.
