Fair Work Commission AI warning: what employers need to know

Australian employers are used to keeping pace with award updates, Fair Work Act changes and case law. Now there’s a new compliance issue to watch out for – how AI tools are reshaping workplace disputes. 

The Fair Work Commission has formally raised concerns about generative AI being used to prepare legal submissions and the warning matters just as much for employers defending claims as it does for the employees making them.

Here’s what the warning says, why it’s important and what employers should do about it.

What is the Fair Work Commission’s warning about AI?

On 24 March 2026, Fair Work Commission president Justice Adam Hatcher released an exposure draft of a new Guidance Note: Use of Generative Artificial Intelligence in Commission cases. The draft sets out what those using generative AI tools must do when preparing an application, submission, witness statement or any other document lodged with the Commission.

The guidance was prompted by a rise in the Commission’s workload. According to the Commission’s own figures, lodgements sat at just above 30,000 a year until 2023, rose to 44,075 in the 2024-25 financial year and are projected to hit between 50,000 and 55,000 in 2025-26. Justice Hatcher has attributed a large share of this growth to applicants using AI tools to prepare claims, describing the overall increase in the Commission’s workload as being on track to exceed 70% over three years.

The draft Guidance Note sets out three core requirements for anyone who uses AI to prepare a Commission document:

1. Disclosure: The document must state that AI was used to prepare it.
2. Verification: The person must check the document and confirm that all facts, legislative references and case law citations are correct and relevant and state that this checking has been done.
3. Witness declaration: If the document is a witness statement or declaration, the person must confirm it is based on their own knowledge.

Legal practitioners and paid agents face an additional obligation. They must include hyperlinks to any case law they cite, so the Commission and other parties can confirm it exists. The Fair Work Ombudsman is separately exploring its own AI tools to help employers interpret awards, though it has confirmed no tool is currently being piloted.

Why AI-generated claims can be risky

The Fair Work Commission’s concern is centred around what happens when AI-generated content is filed without proper checking. AI tools produce fluent, confident-sounding text, but fluency isn’t the same as accuracy. In a legal setting, that can have severe consequences.

Misunderstanding legal requirements

AI tools don’t know the specific enterprise agreement, modern award or workplace policy that applies to a given business. They generate answers based on patterns in their training data, not on the legal framework governing a particular case. This means a submission can seem legally sound while missing or misapplying the exact provisions that determine the outcome, such as the factors the Commission must weigh under section 387 of the Fair Work Act when assessing an unfair dismissal claim.

Inaccurate or fabricated information

The Commission’s draft guidance is explicit that AI output can be “incomplete, inaccurate, out of date, or just made up.”  

Risk of claims being dismissed

Under the draft Guidance Note, failing to meet the disclosure and verification requirements can lead to consequences. The Commission has indicated it may give non-compliant material less weight, disregard it entirely or order costs against the party responsible. 

It’s also worth noting that giving false or misleading information to the Commission is a criminal offence under section 137.1 of the Criminal Code, carrying a penalty of up to 12 months’ imprisonment. These are not small risks for a claim or defence built on unchecked AI output.

What this means for employers and HR teams

While this is focused on employees lodging claims, employers need to be aware of the expected standards. Employers, particularly small businesses without in-house legal support, might use AI to draft employment letters, manage performance processes or respond to Fair Work applications. The same risks apply in both directions.

If an employer’s response to a claim relies on AI-generated content that is incorrect, misses a procedural step or cites case law that doesn’t exist, it can weaken an otherwise defensible position. Procedural fairness in dismissals, correctly applying award conditions and documenting the reasons for a decision are all areas where a generic AI-drafted process can leave out requirements that are specific to your specific circumstances. 

For HR teams, the practical takeaway is that any AI-assisted document heading toward the Commission needs the same disclosure and verification discipline the Commission now expects from applicants.

Can AI still be used in HR and workplace processes?

Yes and the Commission’s guidance doesn’t suggest otherwise. AI can be useful for admin and support tasks, however, the issue is treating AI output as a substitute for legal judgement or compliance expertise.

Tools built for a specific HR purpose, with human review built into the process, are a different proposition to asking a general-purpose chatbot for legal advice. 

Best practices for using AI responsibly in the workplace

Use AI as a support tool, not a decision-maker

AI is well suited to drafting, summarising and organising information. It’s not well suited to determining whether a dismissal was procedurally fair or how a general protections claim is likely to be resolved. Keep AI in a support role and keep a person accountable for the final decision.

Prioritise human oversight and review

Every AI-generated document that could end up in front of the Commission, a court or even an internal grievance process should be checked line by line before it’s used. That means verifying facts, checking that any legislation or case law cited exists and applies, and confirming the content reflects your specific workplace circumstances instead of a generic template.

Seek professional advice when needed

Some situations call for qualified legal or HR advice. This includes terminations, general protections claims, workplace investigations and any matter where the cost of getting it wrong outweighs the time saved. 

Employment Hero’s HR advisory service gives employers access to expert-led advice, so decisions with legal weight are backed by qualified professionals, instead of unchecked AI output.

How to reduce risk in workplace compliance processes

The Commission’s warning is a reminder that good processes outweighs speed. Structured HR systems that document each step of a dismissal or grievance, maintain accurate records of performance conversations and apply awards correctly reduce the risk of any single decision.

If you want AI to reduce admin without adding risk, it needs to sit inside a system built for HR and compliance, with expert support available when a decision matters. 

Take a look at how Employment Hero’s AI-enhanced HR tools and HR Advisory Service can support your business.