Fair Work claims are projected to hit 55,000 this year. The FWC president says AI is the reason. Here’s what Australian business owners need to know now.
What’s happening: Fair Work Commission President Justice Adam Hatcher has warned that AI tools are driving a surge in workplace claims that is pushing the Commission to its limits.
Why this matters: AI tools are lowering the barrier to lodging claims, enabling employees to prepare and file applications, including some with invented or embellished facts, with minimal effort, time, or cost.
There is a scene Justice Adam Hatcher describes that will resonate with any employer who has ever had to let someone go. He opened ChatGPT, told it he had been dismissed, provided a few basic facts, and watched the tool produce a ready-to-file Fair Work application and a witness statement containing, as he put it, “a substantially-invented story” about his dismissal. It suggested he could realistically expect between $15,000 and $40,000 in compensation. The whole exercise took less than 10 minutes.
Justice Hatcher, President of the Fair Work Commission, shared this account in a presentation to the Victorian Bar Association on 18 February 2026, titled “A disrupted future: Artificial intelligence and the Fair Work Commission.” It was a candid signal to Australian employers that the landscape of workplace disputes has changed significantly, and that AI is the primary reason why.
A 70% surge in three years
The numbers behind Justice Hatcher’s address are stark. Total FWC lodgments sat at a little above 30,000 per year until around 2023. They jumped to 40,190 in 2023-24, then to 44,075 in 2024-25. For 2025-26, the Commission is projecting between 50,000 and 55,000 lodgments, which Justice Hatcher says will represent a growth of over 70% in the space of three years.
Unfair dismissal claims have surged 27% above the long-term average, with cases expected to exceed 50,000 this year, prompting Justice Hatcher to acknowledge publicly that the volume is now stretching the Commission’s capacity.
Compared to the three-year average from 2022-23 to 2024-25, the current financial year’s figures show total lodgments up 40%, unfair dismissal applications up 41%, section 365 general protections dismissal claims up 62%, and other general protections contravention disputes up 135%, according to the Commission’s own data.
Justice Hatcher was direct about what is driving this. The historical relationship between retrenchment rates and dismissal applications, which previously moved in tandem, has broken down. The timing of the divergence coincides closely with the release of ChatGPT in November 2022 and the subsequent proliferation of AI tools.
“That this is principally being caused by the increasing use of AI tools by potential litigants is, in my view, the only reasonable inference which can be drawn,” he said in the presentation.
Ten minutes and a chatbot
The mechanism is straightforward. AI tools can now explain the Fair Work system, identify potential grounds for a claim, fill in the required forms, and generate supporting witness statements, all without any prior legal knowledge required on the part of the user.
Justice Hatcher acknowledged the access-to-justice dimension of this. For a legitimate claimant who would previously have had no idea where to start, an AI tool that can identify a remedy and explain the process in plain language is, on balance, a positive development.
The problem is what happens when the tool is pointed at a weak or unmeritorious case. Emplawyer managing principal Michelle Dawson said AI tools have made it faster and easier for individuals to lodge claims, with her firm observing “a rise in claims that have clearly been prepared with AI tools which require very little input by the applicant, and many such claims smack of opportunism, lack merit and/or are vexatious.”
Justice Hatcher put the practical effect plainly in his presentation. The proportion of dismissed employees who then contested their dismissal at the FWC jumped from 75.6% for the year to February 2024 to 84.4% for the year to February 2025, based on the Commission’s own rough calculation comparing lodgments against ABS job mobility data.
There is a further dimension that is particularly relevant for employers facing general protections claims. Justice Hatcher noted that the majority of general protections dismissal claims under section 365 are brought by applicants who have not served the qualifying period to make an unfair dismissal claim. In other words, a significant portion of the surge in general protections claims appear to be unfair dismissal claims in substance, reframed by AI tools as general protections applications to get around eligibility requirements.
What this costs employers
The Commission is showing the strain. A key performance benchmark requires 90% of reserved decisions to be issued within 12 weeks. The FWC maintained this standard through to the end of 2024-25 despite the growing caseload. That benchmark has now slipped for the first time in many years, with 85% of decisions issued within 12 weeks in the current financial year to date.
As Dynamic Business has reported, for small business owners caught in the system, the impact extends well beyond statistics. The Council of Small Business Organisations Australia has described the current environment as one where claims can be lodged easily and cheaply, with disproportionate consequences for genuine small employers who have done nothing wrong.
Justice Hatcher also noted that the Commission’s capacity to deal with major cases of public importance is being compromised, including gender-based undervaluation matters, reviews of award provisions relating to working from home and part-time employment, and minimum standards orders for digital platform workers. These are cases that affect every employer in Australia.
What employers should do now
In response to the surge, the Fair Work Commission is reforming its procedures. The most significant change for employers is an incoming mandatory AI disclosure requirement, which will be embedded across all FWC forms and documents. Parties who used AI to prepare an application will be required to disclose this, verify that all facts are accurate, and confirm that all case law cited actually exists and says what it is claimed to say. Failure to do so may result in the application being dismissed or a costs order.
The Commission has also streamlined its case management model for general protections conciliation conferences. Conferences will now focus purely on settlement, run shorter, and be terminated immediately if a respondent indicates it has no intention of making an offer. Justice Hatcher noted that most conferences under the new procedures take less than an hour, with some concluding in five minutes.
For employers, the practical takeaway from this shift is the importance of documentation. Under the new procedures, extension of time applications without reasonable prospects of success can be dismissed on the papers, without requiring an employer to respond. But where a matter proceeds, a well-documented termination process remains the most effective protection.
That means clear performance expectations and position descriptions from the outset, structured and documented performance management processes where issues arise, written records of warnings and the opportunity to respond, and a legitimate and documented reason for any termination decision. The quality of records kept before a termination occurs is what determines whether a business can defend a claim effectively once one is lodged.
Justice Hatcher also flagged that the FWC is seeking legislative reform from the Federal Government to allow more matters to be dealt with on the papers and to increase powers to dismiss claims without reasonable prospects of success. Whether that reform eventuates before the next projected record year remains to be seen. In the meantime, the Commission has made clear that employers should expect the current environment to continue.
Source: https://www.fwc.gov.au/documents/reporting/presidents-presentation-ai-bar-association-2026-02-18.pdf
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