The Fair Work Commission (FWC) has announced significant reforms aimed at tackling a surge in unlawful dismissal claims. This rise has been partly attributed to the involvement of artificial intelligence and paid agents who have been leveraging these claims for financial gain. The announcement was made by President Justice Adam Hatcher on Thursday, following the release of data indicating that nearly 40% of settled general protections claims now result in payouts exceeding $10,000.
The reforms will eliminate the previous “tick the box” approach in applications, mandating that workers provide more detailed and substantiated arguments. The changes will also enhance the commission’s ability to screen paid agents at an earlier stage and simplify the process for rejecting late applications. Hatcher emphasized that the increase in unlawful dismissal claims represents the largest area of growth for the commission, with a notable 57% increase in claims lodged from July to September, totaling 2,120 cases.
Impact on the Commission’s Workload
Hatcher expressed concerns regarding the unsustainable nature of this growth within the commission’s current operational framework. He stated, “This continuing rate of growth in the commission’s workload is unsustainable within the commission’s current operational, performance, and funding structures.” The increase in claims is affecting the commission’s ability to focus on other significant matters, such as enterprise bargaining and addressing gender-based pay disparities.
General protections claims encompass a wider range of issues than mere unfair dismissal, including allegations that employers acted for prohibited reasons, such as retaliation for complaints. These claims have no minimum service period and reverse the burden of proof onto employers, allowing for potentially uncapped damages.
According to the FWC’s data, in the financial year 2024-25, almost 40% of settled general protection cases involved payouts exceeding $10,000, a significant increase from the long-term average of 25%. The median settlement figure for the past year ranged from $4,000 to $6,000, with about 33% of settled cases falling below $4,000 and 61% below $10,000.
Unions and Employers Seek Solutions
There is a rare consensus between unions and employer groups that reforms are necessary to address the flood of claims deemed unmeritorious. Some employer representatives are advocating for substantial legislative changes, including narrowing eligibility criteria, eliminating the reverse burden of proof, and capping damages.
Workplace Relations Minister Amanda Rishworth has indicated that she is considering “all options” to address the issues raised. Hatcher’s statement also highlighted the significant role played by paid agents—non-lawyer representatives—in submitting these claims. From July 2022 to September 2023, 25% of applicants had representation from just eight agents.
Currently, there is no federal regulatory framework governing paid agents. The recent procedural reforms now allow the commission to approve or reject representatives based solely on documentation submitted. Furthermore, agents are required to disclose their cost arrangements with clients.
The second phase of the reforms will involve trials of alternative mediation methods, including “expedited settlement-focused conferences,” with a rollout expected by the end of the year. Hatcher noted that stage three of the reforms will review general protection claims that do not involve dismissal, as well as unfair dismissal claims. Claims in the former category were reported to be 142% above their three-year quarterly average during the last quarter, while unfair dismissal claims were 45% higher than average.
These reforms aim to streamline the process and ensure that the Fair Work Commission can manage its increasing workload effectively while continuing to uphold workers’ rights.
