Qantas is facing a multi-million-dollar compensation bill after it illegally sacked hundreds of workers during the COVID-19 pandemic, with the Federal Court ordering three former employees will receive a share of $170,000.

Last year, the High Court ruled that the airline broke the law when it stood down 1,700 ground crew members in August 2020, after Qantas appealed two previous Federal Court verdicts.

At the Federal Court in Sydney on Monday, Justice Michael Lee ruled that Qantas would be required to pay varying degrees of compensation based on three "test cases".

Justice Lee ordered that the three workers would be awarded compensation of $30,000, $40,000 and $100,000 respectively for "non-economic loss".

"I consider that the ... amounts of compensation for non-economic loss reflect the harm sustained by each of the three individuals in a way that is appropriate, just and rational," Justice Lee said.

However, lawyers for both the airline and the Transport Workers' Union will be required to determine a final compensation figure for the income lost by the 1,700 sacked staff.

The final compensation figure will be capped at around 12 months' pay for affected workers, with Justice Lee agreeing with Qantas that the workers would have been sacked by late 2021 and their roles would have been outsourced.

While the total compensation amount is yet to be calculated, the ruling means Qantas is set to face a substantial compensation bill worth tens of millions of dollars.

In his judgement, Justice Lee issued a stern warning to both parties to resolve the matter, which has been tied up in court for four years.

"Both sides have engaged in rhetoric about being willing to resolve all issues with promptitude," Justice Lee said.

"It may be a triumph of hope over expectation, but my desire is for the court to move quickly to resolve any penalty and the balance of compensation issues.

"Apart from any public benefit, finality would help bring a degree of closure to those affected workers who have been wronged, particularly for those who experienced emotional and financial stress."

'This is the spirit of Australia'

Speaking after the ruling, TWU assistant secretary Nick McIntosh said "this is finally the day for justice for 1,700 workers who did nothing wrong and were illegally sacked".

"Today is not just a victory for them [workers], it is not just a victory for the TWU," he said.

"It is a victory for every working person in this country and is also a message to corporate Australia — a message that says 'if you treat workers this way, if you think you can get away with the biggest illegal sacking of workers in Australian history, then guess what? Think again.'"

Speaking outside the Federal Court in Sydney, Maurice Blackburn lawyer Josh Bornstein said the focus would now be on determining how much each sacked worker is owed.

"From this point on, we will be doing calculations of the loss suffered, the ultimate compensation figure to be determined for all affected workers," he said.

"This was a decision about three test cases. It now has to be applied to every other illegally sacked worker to determine the global figure that Qantas has to pay, and the process by which those payments can get to those workers as soon as possible.

"That's not the end of it either, because there is also a penalty hearing coming up, and we will be asking the Federal Court to order a very big penalty against Qantas to deter not only it, but any other companies thinking about union-busting on a grand scale."

Mr McIntosh said the union expects the total compensation bill to be in excess of $100 million.

"We will be saying to the court, given this is the biggest illegal sacking by a country mile in Australian history … this should be worth more than $200 million when all is said and done at the end of this," he said.

"This needs to send a powerful message to corporate Australia."

Former Qantas employee Don Dixon said the ruling came with mixed emotions.

"What a victory against, almost like our mother and father," he said outside the Federal Court.

"Working for Qantas, we were family … it's sad in one way but it's jubilant in all the other ways.

"We stood up and fought. Every Australian now should say, you know what, this is the spirit of Australia — you dig in when it gets tough and you don't give up, and here we are today having a massive victory."

Qantas apologises to former staff

In a statement, Qantas CEO Vanessa Hudson said the airline accepted the Federal Court's ruling.

"We sincerely apologise to our former employees who were impacted by this decision and we know that the onus is on Qantas to learn from this," she said.

"We recognise the emotional and financial impact this has had on these people and their families. We hope that this provides closure to those who have been affected."

The airline said it would "work to expedite the payments" to former employees, and has reached out to the TWU to "find a way to speed up the compensation".

In its full 2024 financial year results, released in August, Qantas' balance sheet had a provision of $70 million set aside for the case, but noted the "final outcome may vary … from the amount provided."

However, Qantas has not disclosed the total amount it has set aside to resolve the case.

Lawyers for both Qantas and the TWU have been ordered to attend mediation to determine the final compensation amount, before Justice Lee will consider an application by the TWU for the airline to be penalised for its conduct.

The matter will return to the Federal Court in November.