Is ChatGPT the new paid agent? The deluge of claims flooding the Fair Work Commission

The number of dismissal-related claims in the Fair Work Commission are on the rise and there are few signs of this changing in the short term. In 2024-25, the total lodgements in the Commission reached a record 44,075 and it is estimated that those numbers will climb to over 50,000 in 2026.

At first blush, one explanation for this trend could be the Commission’s expanded jurisdiction following the industrial relations reforms introduced by the Federal Labor Government since coming to power in 2022. However, the President of the Commission has recently observed that the increase in total lodgements is due to the increase to the traditional matter types (unfair dismissal and general protections claims), which is further attributed to the rise in generative AI.

General protections dismissal related applications are up 62%, non-dismissal related contravention disputes (e.g. non-dismissal general protection applications) are up 135% and unfair dismissal applications are up 41% compared to the three-year average. We are increasingly seeing applications which are drafted, wholly or partly, with the assistance of generative AI. This is placing strain on both the Commission which has to deal with those claims, and employers who need to respond to them. This is compounded by some architectural features of the Fair Work Act 2009 (Cth) (FW Act) which require the Commission to determine certain jurisdictional matters before even proceeding to a conciliation in general protections matters.

There are ripple effects at the Federal Court and Federal Circuit and Family Court level. There is currently a combined total of over 1,000 cases in those jurisdictions, with a 128% increase in cases in the Federal Court and 60% increase
in cases in the Federal Circuit and Family Court, compared to the three-year average.

The problem

A dismissed employee has a number of potential claims available to them in the Commission. Such an employee may lodge an unfair dismissal claim on the basis that the dismissal was harsh, unjust or unreasonable. For an employee, the drawback of this claim is that there are eligibility requirements based on their length of service, the high-income threshold and modern award coverage.

There is also a compensation cap at 26 weeks’ pay. The claim must usually be brought within a strict 21 day deadline running from the date of dismissal.

An employee may instead lodge a general protections claim. To bring a general protections claim, an employee needs to allege the possession or exercise of a ‘workplace right’ (e.g. they made a complaint or inquiry in relation to their employment) and that their employer subjected them to ‘adverse action’ (e.g. by dismissing them). The onus then shifts to the employer to prove that that they did not take adverse action because of a prohibited reason. For an employee, the benefit of this claim is that there is a reverse onus of proof, no minimum service eligibility period and potentially uncapped damages. A 21-day deadline applies for dismissal related general protections claims (which requires an employee to have actually been dismissed), but there is also a non-dismissal related avenue which has a statutory limitation period of six years.

The Commission has previously expressed concerns that general protections claims were being used as ‘pseudo’ unfair dismissal claims. The statistics show that two thirds of general protections claims were lodged by employees who were ineligible to bring an unfair dismissal claim. Certain employee representatives, known as ‘paid agents’, are said to have contributed to the rise in pseudo unfair dismissal claims – with the operating model that employers would rather settle at a compulsory conciliation rather than risk the matter going to court.

The cost of making an unfair dismissal or general protections claim is relatively modest. The Commission currently imposes an $89.70 application fee (which can be waived on the grounds of financial hardship). There are also cost protections for an unsuccessful litigant.

One (potentially unintentional) feature of the FW Act is that if an employer raises a jurisdictional objection to a general protections claim – such as an objection on the basis that the claim is out of time or the employee was not dismissed – this triggers an interlocutory stage where the Commission must determine the objection before even holding a conciliation conference in the matter.

This means that making a jurisdictional objection can result in the parties needing to file evidence and submissions and attend a hearing on that issue, only to be able to proceed to a conciliation conference if the employer is unsuccessful in that objection. Now add to these matters the advent of easily accessible generative AI. AI tools direct an employee where to go to lodge a claim, advise what type of claim to bring, and will draft the claim for the employee. It is arguably becoming the new ‘paid agents’ in the Commission and has resulted in a deluge of unmeritorious, and sometimes undecipherable, claims.

Recent changes to stem the tide

The Commission has introduced changes to plug this gap and has intimated further changes. It has amended the form for general protections applications so that employees are required to articulate the alleged contraventions the employer has engaged in. The Commission is also holding shorter conciliation conferences (usually one hour) focused almost entirely on settlement, rather than the merits (or otherwise) of the application. Interestingly, an employee who tries to access an application form using the FWC’s website will need to navigate an online questionnaire as to their eligibility to make a claim. The Commission has most recently sought feedback on a draft guidance note on the use of generative AI and the proposed wording for a generative AI disclosure requirement in its application forms.

Proposed further reforms

There appears to be appetite from the Commission, Federal Government and employer groups for further reforms. The President of the Commission is also pushing for legislative reform to resolve the jurisdictional objection anomaly set out above. The Federal Government has indicated it is open to those reforms. Employer groups are pushing for more radical reforms, such as increasing application fees, imposing compensation caps and removing the reverse onus.

What this means for employers

The changes to the Commission’s processes to respond to the influx of claims have so far been incremental and often at the discretion of the member presiding over the relevant matter. Here, experience counts and so if faced with a claim and an unfamiliar process, please reach out to a member of the HFW team to help your business navigate the situation.