By The Fair Work Commission (FWC) has released an AI Guidance Note introducing disclosure and verification requirements for parties using generative AI in Commission cases, according to HRD America. It takes effect from 20 October 2026 and applies to unfair dismissal, general protections and other matters before the tribunal.
The FWC reported a 70 percent increase in total overall workload over the past three years, largely attributed to the proliferation and use of AI in applications. President Hatcher stated that the growth in matters commenced in the FWC has been linked to the growing use of AI. The guidance follows the decision in Sadnan Khan v Aldi Pty Ltd [2026] FWC 3144, where the Commission ordered an applicant to pay part of the respondent’s costs due to inappropriate use of AI.
What the guidance requires in practice
Any party using generative AI to help prepare a document lodged with the FWC must state in that document that GenAI was used and how it was used. The document must then be checked to ensure all facts, evidence, cases, legislation, references, extracts and quotes are accurate, relevant, properly sourced and support the legal position.
Witness statements carry an additional obligation. Any statement or declaration of a person’s evidence must be based on that person’s own knowledge and words, be true to the best of their knowledge, and include a declaration to that effect. This directly targets a known failure mode of AI drafting, where generated text puts words into a witness’s mouth that the witness never said or could not verify.
Professional representatives must include hyperlinks to all cases referred to in the document. Self-represented litigants are encouraged to do the same. The FWC plans to introduce modified forms giving effect to the guidance, requiring parties to disclose where AI has been used in preparing documents lodged with the FWC. Both the AI Guidance Note and the modified forms take effect on the same day.
The Aldi case and cost consequences
The Aldi decision provides the clearest signal of how the FWC will treat unreasonable AI use. Mr Khan commenced employment with ALDI on 29 September 2025 and was notified of his dismissal on 26 March 2026, three days short of the six-month minimum employment period for protection from unfair dismissal. The Commission ordered him to pay part of the respondent’s costs.
The FWC reinforced that parties may face adverse costs orders if they fail to use AI reasonably, including by failing to identify important jurisdictional errors in AI-generated material. The minimum employment period is a threshold jurisdictional question. An AI tool that generates an unfair dismissal application without flagging that the applicant may not meet the eligibility period creates a problem the applicant then owns.
Non-compliance with the AI Guidance Note can result in documents being given less weight or disregarded, an adverse costs order being made against the relevant party, or the party’s case being dismissed altogether.
What this means for HR and payroll teams
Employers responding to FWC claims should treat AI-generated responses with the same scrutiny the Commission now demands of applicants. An employer response prepared with AI assistance must disclose that use and meet the same verification standard. HR teams that rely on AI to draft responses to unfair dismissal or general protections claims should build a review step into their process before any document is lodged.
The guidance also cautions against entering personal, confidential or legally privileged information into GenAI tools. For HR teams, this is a practical warning: employment records, payroll data, medical information and internal investigation notes should not be pasted into public AI tools when preparing a response. The FWC highlights the potential risk of breaching orders prohibiting or restricting publication of certain information if that information is entered into the tool.
The guidance reiterates that GenAI is not a substitute for legal advice and should not be relied on to assess the merits of a claim or a party’s prospects of success. For employers, this means AI can assist with drafting structure or summarising known facts, but the legal judgment about jurisdiction, merit and settlement remains a human responsibility.
What the FWC observed about AI-generated materials
The Commission has observed changes in the character of materials lodged by parties, including longer and more detailed written submissions, greater use of formal or legalistic language, and more structured claims by self-represented applicants. These changes are not neutral. Longer submissions with confident legal phrasing can mask errors that are harder to spot.
The FWC identified specific problems that reliance on GenAI can create: unrealistic expectations about prospects of a claim and likely compensation, and inaccurate, incomplete, out of date or made up AI-generated content. These impose a significant time and cost burden on parties and the FWC.
Courts and tribunals at the federal, state and territory levels are grappling with increased reliance on GenAI and associated risks to the proper administration of justice and public confidence in the legal system. The FWC guidance is one response to that broader challenge.
Steps to take before 20 October 2026
HR and payroll teams that handle FWC matters should review their current document preparation workflows before the guidance takes effect. Where AI tools are used to draft responses, submissions or witness statements, the team should establish a documented verification process that checks every factual claim, case reference and legislative citation.
The disclosure requirement is not optional. A document lodged after 20 October 2026 that used GenAI without disclosing it risks being given less weight or disregarded. The cost consequences from the Aldi decision show the FWC is willing to act.
For self-represented employers, the same rules apply. The guidance does not distinguish between represented and unrepresented parties on the core obligations of disclosure and verification. The only difference is that professional representatives must include hyperlinks to cases, while self-represented litigants are encouraged to do so.
Sources: HRD America
Photo: AI-BRIDGES Symposium 2026 005 by Photograph by Mike Peel (www.mikepeel.net)., CC BY-SA 4.0
