A cleaner was told to stop working after he opposed cleaning practices on aircraft arriving from China.
Watchdog SafeWork NSW accused Qantas of discriminatory conduct for stopping the pay of a worker who raised concerns about exposure of employees to Covid.
However, Qantas said the cleaner was being investigated for "attempting to incite unprotected industrial action".
A union called the prosecution a "landmark for work health and safety".
Cleaner Theo Seremetidis was an elected health and safety representative at Qantas when the Covid pandemic broke out.
Last week, he told an Australian Senate inquiry that Qantas' safety precautions were inadequate: "We were directed to clean planes with just water. No sanitiser for the trays, no sanitiser for anything," he said.
"PPE was not mandated despite managers wearing HAZMAT suits. We were not even provided masks or disinfectant.
"These safety issues exposed workers in Australia, and more broadly, to serious risks of contracting and spreading Covid," he added.
"I was really passionate about safety, and wanted to see my fellow workers go home safely each day."
Mr Seremetidis alleges concerns raised with management went unaddressed and eventually he directed a group of workers to stop working.
"On the day that this occurred, I was stood down immediately. The day I was stood down was my last day at Qantas."
The workers safety regulator SafeWork NSW is prosecuting the airline, alleging the company engaged in discriminatory conduct.
"As the matter is before the court, no further information can be provided at this time," a SafeWork spokesman said.