Qantas has apologised to employees unlawfully retrenched during the Covid-19 pandemic as it faces calls to pay more than NZ$220 million in compensation and penalties.

The Transport Workers' Union had a major win in the Federal Court on Monday after deciding to pursue the airline over its decision to outsource almost 1700 ground staff jobs in November 2020.

After redundancies commenced, these employees were eventually all jettisoned from the airline by March 2021.

Justice Michael Lee ordered Qantas pay NZ$187,000 in non-economic loss to cover the hurt and distress suffered by three test-case workers: Christopher Carney, Nicholas Bennett and Leonie Piggott.

The decision paves the way for compensation for other sacked staff following a long and bitterly fought legal battle Qantas unsuccessfully took to the High Court.

In July 2021, Justice Lee found the lay-offs were designed to deprive workers of being able to bargain for a new enterprise agreement and, as such, contravened employment law.

In his 74-page judgment today, he found the workers would have been retrenched by late 2021 anyway given the airline's "laser-like" focus on cutting costs.

The judge awarded Carney and Piggott NZ$33,000 and NZ$44,000 respectively due to their hurt, humiliation and psychological distress from being made redundant.

But he awarded Bennett NZ$110,000 after finding the lay-offs had triggered a major psychiatric illness in the ex-airline worker with symptoms including depression, anxiety, sleep disturbance and problematic alcohol use.

After four years of legal skirmishes, Justice Lee urged the union and airline to swiftly resolve any further disputes.

"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," he said.

The matter will return to court on November 15.

Qantas chief executive Vanessa Hudson apologised and said the company would work to expedite compensation payments.

"We recognise the emotional and financial impact this has had on these people and their families," she said in a statement.

"We hope this provides closure to those who have been affected."

TWU NSW assistant secretary Nick McIntosh said the union would seek a compensation claim in excess of NZ$110 million for all retrenched workers as well as a penalty of a similar amount.

Qantas should be hit with more than NZ$220 million in total for "the biggest illegal sacking by a country mile", he said.

"We need to make sure there is a substantial compensation package and penalty to send a message to corporate Australia that if you do this, you're not only going to pay with your back pocket but you're going to pay in terms of your publicity and your reputation."

He congratulated the employees who stood up to Qantas, saying it was a victory for workers all over Australia.

Outsourced worker Don Dixon said the airline's brutal decision was "a horrible thing" for staff who thought they would spend the rest of their lives with the company.

"Most of us are getting on in years so getting another job out in the harsh world was very, very difficult," he said.

Professor Rico Merkert from the University of Sydney's Institute of Transport and Logistics Studies told AAP Qantas would not be impacted too much by a NZ$220 million legal bill.

However, he said the sheer size of the figure could embolden unions to pursue similar cases in future.

Swinburne law and corporate governance specialist Helen Bird said while the airline could afford to pay, it would not want to repeat its actions.

In April, Qantas announced NZ$1.38 billion after-tax profit for 2024.

It has set aside cash reserves to cover any future court costs and awards, increasing this by NZ$77 million from 2023 to 2024.

On the back of Monday's judgment, Qantas' share price remained steady, rising before the decision, then falling but rebounding by the end of the day.