A robo-power boost for disgruntled staff

Freely available artificial intelligence tools are helping drive record unfair dismissal lodgements at the Fair Work Commission, and employers are being reminded to follow correct processes and review their insurance arrangements.

Artificial intelligence is changing how quickly employment disputes can be prepared and lodged, with the Fair Work Commission reporting record levels of unfair dismissal applications.

Dispute lodgements have jumped to record levels, with no sign of plateauing, and many applications clearly use AI-generated language, commission president Adam Hatcher warned in a speech earlier this year.

Applications in the December half totalled 27,192, representing a 40% increase from the preceding three-year average.

Justice Hatcher pointed out applications can be put together quickly and easily, even when they have no reasonable prospects of success.

The trend is coinciding with rising business cost pressures that can lead to staffing level reviews. But difficult decisions on employees can be required at any time, due to issues such as poor performance or serious misconduct.

Why correct process still matters

Whatever the cause of a job loss, technology is making it easier for aggrieved people to take matters further and to test the chance of gaining redress, even when their case is weak.

The federal government has introduced reforms to ease caseload pressures on the Fair Work Commission and curb dubious applications, but it remains important for employers to follow correct processes, and to have suitable insurance arrangements in place.

“Even where an employer follows the correct process, the cost of defending a claim can still be significant.”

An employer could be ordered to pay compensation, generally capped at 26 weeks, or give a former staff member their job back if their case succeeds, but even if the employer wins and follows processes “by the book”, legal defence costs can be high. A broker can help explain how the relevant policy may respond and assist with the insurance process if a claim or circumstance arises.

Eligibility criteria for a person to make an unfair dismissal claim include that they have been employed continuously for six months, or a year in the case of a small business.

Where employers are commonly caught out

Common mistakes employers make include not having documentation to support concerns and not raising problems in a timely way, with managers sometimes reluctant to pursue difficult conversations.

Steps to prevent escalation start with having clear policies in place, setting expectations, documenting concerns and addressing them as they arise. Written warnings are particularly important in poor performance cases, and where more serious misconduct occurs a person should have an opportunity to respond.

Businesses of all sizes are exposed to risks, and problems can arise even when staff are considered friends. Employment practices liability cover, often arranged as a section of a management liability policy, may respond to some related expenses, subject to the policy terms and the insurer's assessment of the claim.

Reviewing your management liability arrangements before an employment issue arises can help identify whether employment practices liability is included and what limits, exclusions or conditions apply. If your business has employees, contact the RMA Insurance Brokers team to review how your management liability and employment practices exposures are currently arranged.

Source: NIBA Winter Newsletter 2026