Drowning in dismissal claims: can the new Cooperative Workplaces Bill stem the tide?

AI and unfair dismissal claims: early research findings

The Fair Work Commission is "taking on water", according to FWC General Manager Murray Furlong. Total claims have surpassed last financial year's record high of 44,000, and the Commission's own research now reveals a significant contributor to that surge: artificial intelligence.

Preliminary findings from an FWC study, presented to the Senate Education and Employment Legislation Committee on 3 June 2025, indicate that between 40 and 50% of applicants in unfair dismissal and general protections matters are using AI to prepare and lodge their claims. Forty% of applicants surveyed admitted to using AI, while employers suspected the incidence was higher than 40%, and FWC members estimated that AI was being used in closer to 50% of cases.

The Commission's executive director of legal, performance and engagement, Zoe Bright, noted that while AI tools can help some applicants express their ideas more clearly, they can also give potential litigants "unrealistically optimistic predictions about what the success of their case might be and the likely compensation", which may encourage unmeritorious applications. FWC President Adam Hatcher has also foreshadowed that the Commission will mandate disclosure of whether generative AI has been used to make applications.

The Government's legislative response

In direct response to these pressures, Workplace Relations Minister Amanda Rishworth introduced the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 into Parliament on 3 June 2026. The Bill includes measures designed to reduce the FWC's administrative burden, increase its flexibility, and give it new tools to deal with frivolous and vexatious claims.

For employers, who bear the cost of responding to unmeritorious claims and experience delays in the resolution of genuine disputes, several of the proposed measures are particularly significant.

1. No requirement to determine dismissal before dealing with the dispute

Under the current law, following the Federal Court's decision in Coles Supply Chain Pty Ltd v Milford [2020] 279 FCR 591, where an employer raises a jurisdictional objection that the applicant was not in fact dismissed, the FWC must conduct a contested arbitrated hearing on that preliminary question before it can even commence conciliation. This is costly and time-consuming for both the Commission and respondent employers.

The Bill would remove this requirement. Under the proposed amendments, an applicant need only allege that they were dismissed in order to bring the application. The FWC would then be empowered to proceed directly to conciliation or mediation without first making an arbitrated decision about whether the applicant was in fact dismissed. The question of whether a dismissal has occurred can still be ventilated during the conciliation conference, at consent arbitration, or in court proceedings.

FWC General Manager Murray Furlong told the Senate that the scrapping of this obligation would "have a very significant impact on improving the efficiency of the tribunal".

2. President may delegate functions to staff above APS 6

Currently, where a staff conciliator conducts a conference in a general protections dismissal or unlawful termination matter and the dispute remains unresolved, that conciliator cannot issue the certificate required for the parties to proceed to court or consent arbitration. Instead, the conciliator must prepare a report for a Commission Member to review and decide whether to issue the certificate, which causes further delay.

The Bill would empower the President to delegate these functions to Commission staff at or above the APS 6 level. This means the staff conciliator who has dealt extensively with the matter can issue the certificate or advise the parties on prospects directly, without the matter needing to be referred to a Member. This will free Commission Members to undertake other priority work.

3. Dealing with matters "on the papers" by consent

The FWC is currently required to conduct a conference or hold a hearing in unfair dismissal matters where there are contested facts. The Bill would create an exception, allowing the Commission to determine matters "on the papers" where both parties consent and the FWC member is satisfied the matter can be adequately determined in the absence of the parties.

This measure is intended to give the Commission greater flexibility to deal efficiently with less complex applications, while preserving procedural fairness through the consent requirement.

4. Vexatious litigant orders

Perhaps the most significant new power is the ability for a Full Bench of the Commission to make a "vexatious proceeding order". Where the Commission has dismissed a substantive application because it is frivolous, vexatious, or has no reasonable prospects of success, the Full Bench may order that the applicant must not make a further application of a kind specified in the order without the permission of the Commission.

Permission to make a further application may only be granted by the President, a Vice President, or a Deputy President, and only if satisfied that the proposed proceeding is not itself vexatious. The affected person must be given a reasonable opportunity to make submissions before any order is made. The order does not operate as an absolute prohibition on access to the Commission, rather, it imposes a permission requirement for further applications of the specified kind.

This measure gives the Commission an effective way to deal with applicants who demonstrate a pattern of initiating unmeritorious proceedings, shielding employers from harassment and protecting the Commission from the expense and burden of baseless and repetitious applications.