As generative AI becomes part of everyday life, it is also changing the way workplace disputes are raised. The Fair Work Commission has identified AI as one factor contributing to a sharp increase in its workload, alongside a reported 70 per cent increase in Fair Work claims.
So, what does this mean for employers and employees? Put simply, a claim can look polished and convincing without being legally sound.
Where AI Fits and Where It Does Not
AI can be useful in legal matters. It can help translate documents, organise facts and direct someone to information published on the Fair Work Commission website.
What it cannot reliably do is determine whether a claim has a proper legal basis. That limitation is now appearing in real cases.
In two recent matters, reliance on AI led to abrupt and, frankly, embarrassing outcomes.
In Riley v Nuvei Australia Merchant Services Pty Ltd, the applicant referred to several Commission decisions in support of their case. Those decisions did not exist.
In Hoverd v M & J D Pty Ltd, the applicant relied on contract and award terms that were not there and continued to do so even after being warned. The Commission ultimately found that there had been no dismissal, dismissed the claim and invited the employer to apply for costs.
Neither case suggests that using AI is improper or that every claim prepared with AI is weak. The message is much simpler. The person filing the document remains responsible for its contents.
The Two Eligibility Rules AI Often Misses
Before a Fair Work claim can be considered on its merits, it must first satisfy some basic eligibility requirements. This is where generic AI advice often falls short.
The 21 Day Rule
An unfair dismissal or related claim will ordinarily need to be lodged within 21 days after the dismissal takes effect.
AI tools may provide a general explanation of the rule without properly checking it against the actual dates. Missing the deadline can result in the claim being dismissed before the underlying dispute is even considered.
Casual Employee or Contractor Status
A casual employee will generally need to have been employed on a regular and systematic basis to be eligible to bring certain claims.
Similarly, whether someone is an employee or an independent contractor depends on the specific facts and circumstances of the working relationship. A generic AI summary may not identify the factors that matter.
Getting either issue wrong can result in a claim being dismissed at an early stage, at real cost to both parties.
A Quick Note on Costs
The Fair Work Commission is sometimes described as a no cost jurisdiction. That description is a little generous.
Each party will ordinarily bear their own legal costs. There is also a lodgement fee, currently $92.70 and subject to waiver.
In limited circumstances, the Commission can order one party to pay the other party’s costs. This may include circumstances where a claim had no reasonable prospect of success.
What This Means for Employers
The same caution applies when an employer uses AI as part of an employment decision.
This may include:
An AI output is not, by itself, a valid reason for making an employment decision.
Before acting, employers should verify the underlying information, give the employee a genuine opportunity to respond and keep a clear record of who made the final decision and why.
How Zervos Lawyers Can Assist
Our legal team advises both employers and employees in relation to Fair Work claims, workplace investigations and the practical risks of using AI in employment decisions.
Getting advice early can prevent a missed deadline or an AI generated error from narrowing your options.
Nic Zervos | Principal
Luke Karapetsas | Lawyer
Disclaimer The content of this newsletter is provided for informational purposes only to offer general insights and an overview of the law. It is not intended to be legal, accounting or tax advice, nor does it consider your specific objectives, circumstances or needs. Zervos Lawyers and the authors accept no responsibility for any loss incurred by individuals acting or refraining from acting based on the material contained herein. We strongly encourage you to seek tailored professional advice before making any decisions.
