Qantas will no longer have to backpay hundreds of workers after the full Federal Court overturned a recent landmark decision that companies have to pass on the full JobKeeper wage subsidy.

The win was a relief not just for Qantas, but business lobbies that had argued the court’s initial interpretation of the law relating to the federal government’s JobKeeper wage subsidy could have opened the floodgates for other companies to have to backpay workers.

But key unions representing airline workers are devastated, saying people who need the money will now miss out.

In September, the Federal Court ruled against Qantas’ interpretation of the JobKeeper wage subsidy program.

Justice Geoffrey Flick had found the airline had paid workers less than they should have received. But Qantas appealed the decision and on Tuesday the full Federal Court ruled in the airline’s favour.

A Qantas spokesman told ABC News the airline was pleased with the decision.

“We have always made JobKeeper payments to our employees according to advice from the Australian Tax Office,” the airline’s spokesman said.

“Most of the JobKeeper payments Qantas has received went straight to employees who were stood down.”

Under the ATO’s written guidance, it states that “regardless of the frequency of regular pay cycles or out-of-cycle pay periods, or the pay period start and end dates, the $1500 per fortnight applies to the paydays (payment date) within the defined fortnights and from which fixed fortnight the payment applies”.

The unions had relied on the initial federal legislation that was drafted explaining the rules, rather than the ATO’s guidance.

Why the decision was overturned

The Transport Workers’ Union and the Australian Services Union argued in court that the airline refused to pay workers for public holidays, weekends, overtime work and allowances.

They had argued Qantas had “deliberately manipulated” JobKeeper so the airline would not have to pay workers a dollar more than the JobKeeper wage subsidy of $1,500 per fortnight (the rate at the time).

But Qantas argued that payments made in arrears to workers for doing overtime should be counted against the JobKeeper payments.

The court ultimately agreed. It accepted the airline’s argument that it could use workers’ earnings paid in arrears to reduce the top-up amount it must make to get their pay to the minimum $1500 a fortnight required under JobKeeper.

The Business Council of Australia, the Australian Chamber of Commerce and Industry and the Council of Small Business Organisations Australia had been among those warning of the unintended impact had the court’s original decision been maintained.

The decision comes after, in a separate court case, a consortium of unions lost an appeal in the Federal Court in November to have Qantas pay sick leave to the 25,000 workers who were temporarily stood down due to COVID-19.

The airline has also recently come under fire from the unions over its decision to outsource more than 2,000 roles across 10 airports.

Earlier this month, Maurice Blackburn Lawyers filed a test case for the Transport Workers Union seeking to overturn Qantas’ decision to outsource the workers, saying it is unlawful under the Fair Work Act.

-ABC