The High Court judgment handed down on Wednesday upheld two rulings made by the Federal Court, which found the outsourcing of baggage handlers, cleaners and ground staff was unlawful.

Qantas was found in the Federal Court to have breached the Fair Work Act in outsourcing its ground operations to avoid enterprise bargaining rights, after the Transport Workers’ Union took legal action against the carrier.

Justices Kiefel, Gageler, Gleeson and Jagot said in today’s judgment anyone who took “adverse action against another person for a substantial and operative reason of preventing the exercise of a workplace right by the other person contravenes (part of section 340 of the Fair Work Act) … regardless of whether that other person has the relevant workplace right at the time the adverse action is taken”.

“Qantas did not avoid the operation of (the section) in relation to its adverse action by taking the action prior to the existence of the workplace rights the exercise of which Qantas sought to thwart.”

Sacked workers inside the courtroom pumped their fists in victory upon hearing the decision.

Australian Council of Trade Unions secretary Sally McManus, who attended the judgment, posted a celebratory photo on social media saying: “The workers win against Qantas in the High Court. We will always have the backs of workers.”

The airline, which retrenched workers in 2020, lost billions of dollars due to the pandemic, which decimated the aviation sector.

Justin Gleeson SC for Qantas, told the High Court in May the airline’s revenue stream had been shattered by the pandemic which left it “bleeding cash”.

Qantas has since posted an underlying profit of almost $2.5 billion in the past financial year.

The airline argued it could not have breached the workplace rights of the employees, as they did not have the right to take protected industrial action at the time of the decision to outsource.

Qantas said in a statement on Wednesday the decision to outsource the remainder of the airline’s ground handling function was made in August 2020 when “borders were closed, lockdowns were in place and no COVID vaccine existed”.

“The likelihood of a years’ long crisis led Qantas to restructure its business to improve its ability to survive and ultimately recover,” the airline said.

“As we have said from the beginning, we deeply regret the personal impact the outsourcing decision had on all those affected and we sincerely apologise for that.

“A prior decision by the Federal Court has ruled out reinstatement of workers but it will now consider penalties for the breach and compensation for relevant employees, which will factor in redundancy payments already made by Qantas.”

The Transport Workers Union said that Qantas chairman Richard Goyder and the entire board must be replaced by new directors including a worker representative.

The union also called on new CEO Vanessa Hudson to “publicly apologise to illegally sacked workers and commit to a speedy and non-adversarial approach to Federal Court hearings on compensation and penalties”.

Long-time Qantas CEO Alan Joyce resigned last week, two months earlier than scheduled, after a storm of negative publicity about lobbying to stop extra Qatar Airways flights, a backlash over credits for cancelled flights and the consumer watchdog launching court action over claims the airline sold tickets to 8000 grounded flights.

-with AAP