Qantas share price under pressure after staff underpayment revelations

The Qantas Airways Limited (ASX: QAN) share price has come under more pressure today, after it was revealed that the airliner will be forced to pay back millions of dollars to hundreds of workers.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Qantas Airways Limited (ASX: QAN) share price has come under more pressure, closing down 12.64% today after it was revealed that the airliner will be forced to pay back millions of dollars to hundreds of workers, after entering into a court-enforceable undertaking with the Fair Work Ombudsman (FWO). This was revealed to the market in a release by the FWO today.

Details of the Qantas breach

It was revealed today that Qantas had incorrectly paid some of its marketing and administrative staff under the terms of individual contracts of employment, rather than by the appropriate enterprise agreements that applied to its employees.

Qantas actually informed the FWO itself of the error, and this triggered the investigation by the ombudsman.

The FWO pointed out that as a result the market breach, some Qantas employees had failed to receive their required pay in areas including: minimum wages, overtime, annual leave entitlements and superannuation.

The FWO added that Qantas has already paid back over $7 million to over 600 employees who were underpaid between June 2011 and June 2019. These impacted staff were in Qantas' corporate and administration divisions.

Qantas to apologise and set up complaint hotline

Under the terms of the court-enforceable undertaking, Qantas is required to set up an employee hotline and complaints system within a 30-day period.

In addition, the FWO noted that Qantas has been forced to directly apologise to impacted employees and place public notices on its internal communication systems, and externally on a Facebook page as well as in the national press.

Qantas is also required to rectify any further underpayments it finds by 24 April 2020. The FWO further pointed out that Qantas will be required to make a payment to the Commonwealth's Consolidated Revenue Fund, which amounts to 5.5% of its underpayments.

Recap of recent announcement

Qantas' troubles today follow a very tough couple of weeks, with the Qantas share price falling by 57% since 20 February when the current market correction began. On 10 March, Qantas announced further cuts to its international flights reducing capacity by almost a quarter for the next 6 months. These additional changes will bring the total international capacity reduction for Qantas and Jetstar from 5% to 23% compared to the same time last year, with the biggest reductions in the Asia market, which will be down 31%.

Motley Fool contributor Phil Harpur 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.

More on Share Market News

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

3 small-cap ASX healthcare shares 'with strong prospects'

Fund manager IML discusses why these 3 ASX healthcare shares are likely to rise in value.

Read more »

Magnifying glass on a rising interest rate graph.
Share Market News

Will the RBA finally cut interest rates next week?

Let's see what economists are saying about the central bank's meeting.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a rough Friday to close the trading week today.

Read more »

a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.
Broker Notes

7 ASX All Ords shares elevated to 'strong buy' status in October

The brokers turned bullish on these ASX companies last month.

Read more »

A businessman compares the growth trajectory of property versus shares.
Share Market News

How ASX shares vs. property performed in October

The national home value rose for the 21st consecutive month while the ASX 200 dipped.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
52-Week Lows

Why is the Woolworths share price at its lowest point since 2020?

We haven't seen Woolies shares this low since COVID.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

These shares are ending the week in the red. But why?

Read more »