Why HR can’t afford to blink amid Australia’s employment law shakeup
Australian HR leaders are facing a perfect storm of legal, cultural and economic change, with two leading employment lawyers warning that boards, regulators and employees are all turning up the heat at once.
Speaking to HRD, Herbert Smith Freehills Kramer partner Rachel Dawson and executive counsel Lucy Boyd said HR now sits at the centre of some of the most significant shifts in Australian employment law in decades – from positive duties on sexual harassment and psychosocial risk, to the AI‑driven explosion in claims, to restructuring pressures linked to global instability and rising fuel costs.
Sexual harassment and psychosocial risk: From HR problem to board‑level mandate
Boyd said one of the most striking changes in recent years is who is now instructing employment lawyers. Traditionally, clients were HR and industrial relations (IR) managers; now boards are more often directly involved, not only on executive dismissals but on culture reviews, investigations and compliance with new duties around sexual harassment and psychosocial hazards.
Much of this shift has been driven by the introduction of a positive duty to prevent sexual harassment, which squarely puts prevention – not just response – on the agenda for senior leadership. At the same time, a tightening focus on psychosocial hazards has elevated mental health risks and psychological safety to the same level as physical safety. A series of high‑profile inquiries and scandals has also raised public expectations and investor scrutiny.
Institutional investors – particularly large super funds – are no longer prepared to accept quiet deals where senior executives keep their positions or exit on generous terms after substantiated misconduct. Boards are being pushed to send clear cultural signals through visible consequences rather than purely financial settlements.
Dawson noted that regulators and professional bodies are reinforcing this shift by directly reminding boards that positive duties on sexual harassment are board‑level issues, that reporting should flow to them, and that they will be accountable if something goes wrong. This is hardening expectations around governance and oversight.
Prevalence hasn’t improved, but reporting has
Despite the sharper focus, Boyd cautioned HR leaders not to assume that sexual harassment itself is on the decline. The Australian Human Rights Commission’s five‑yearly national inquiry still finds prevalence is extremely high – around one in three people experience workplace sexual harassment – and sector‑specific inquiries such as the Western Australia FIFO inquiry show many workers still do not feel safe.
What has changed is employees’ confidence to speak up and employers’ willingness, and obligation, to act. Boyd said she does not believe there is dramatically less harassment happening, but there are more internal reports and more formal claims because people increasingly believe something will be done, rather than the junior employee quietly being moved on.
Dawson highlighted that the WA FIFO inquiry in particular pushed organisations to confront the systemic and environmental factors that fuel harm: accommodation design, travel arrangements, site lighting, alcohol service in wet messes and the physical layout of camps and worksites. Some of these changes take years and significant capital; cultural change takes even longer. She warned that organisations are still only at the beginning of the tail of claims and issues that will emerge from this work.
For HR, this means continuing to drive long‑term cultural programs while also tackling practical, safety‑adjacent issues that might previously have sat solely in the WHS function. Historically there has been a disconnect between HR and safety, but psychosocial hazards and the pandemic have forced those two worlds together. HR now has more influence in what used to be regarded as pure “safety space” – and that integration is unlikely to unwind.
The AI effect: more claims, more volume, more pressure on HR
If sexual harassment and psychosocial duties are reshaping culture and governance, AI is reshaping volume and process.
Dawson described AI as “the brave new world” for HR and employment law. There is broad hope that it will strip out some of the time‑draining work so teams can focus on what really matters. For now, though, many HR practitioners experience AI as creating more work, not less.
Boyd said one of the most immediate impacts has been an explosion in internal grievances and external claims. It is now incredibly easy for an employee to “play AI lawyer”: they can jump on a tool, generate a detailed complaint or application they would never have drafted unaided, and lodge it with HR or the Fair Work Commission.
This is not a theoretical risk. Boyd pointed to the Fair Work Commission’s reported 70% rise in general protections applications and a marked increase in self‑represented litigants in the federal courts, many of whom are clearly using AI to generate their materials. The sheer volume is clogging the system and has already forced the Commission to rethink its conciliation model for general protections – shifting from longer, more in‑depth conciliations to much shorter processes, simply to clear the backlog.
Dawson is concerned about the long‑term impact on trust in institutions. Many disputes resolve because a Commission member spends time really hearing the applicant and then gives an independent, reality‑checking view on whether they should settle or accept an offer. If mounting time pressures erode that process, she warns there is a risk the institution’s authority will be undermined.
Unions are also pushing back on AI‑generated claims. Dawson said unions are already urging members not to go to generic AI tools as a first step, but to seek union advice instead, in part because they are being presented with large volumes of poorly framed, AI‑generated material that still needs to be sifted and reworked.
Disclosure, costs and the risk of ‘AI‑assisted waste’
Courts and commissions are moving quickly to set some boundaries. Dawson noted that recent federal court guidance requires parties to disclose the use of AI in witness statements and submissions. She sees this as a pragmatic balance: courts cannot realistically ban AI entirely, but they can insist on transparency.
The real test, she suggested, will be the first time someone faces an application for costs because they have used AI poorly and caused wasted expense. Courts have already warned some unrepresented applicants that their materials appear AI‑generated and that they should exercise caution. Dawson said it is easy to imagine a future case where, in egregious circumstances, costs are ordered – sending a powerful signal about how both employees and employers are expected to use these tools.
For HR leaders, the message is twofold:
First, assume claim volume will keep rising and build processes, triage frameworks and in‑house capability on that basis.
Second, set internal guardrails on the use of AI – including training managers and employees on appropriate use, disclosure expectations, and the risks of relying on AI outputs without legal or professional review.
While individual claims are surging, Dawson and Boyd also stress that the Fair Work Commission is simultaneously grappling with resource‑intensive industrial matters – often involving large workforces, complex bargaining and the risk of major economic disruption.
IR reforms, big bargaining and a stretched Commission
“In the IR space, we’re seeing campaigns to bring some of Australia’s largest employers back to the bargaining table after long periods away,” Dawson said. These disputes can affect domestic gas supplies and major export trade routes, demanding serious resources from the Commission and highly experienced negotiators.
Balancing those high‑impact disputes against the flood of individual AI‑driven claims is becoming a major challenge. According to Dawson, “It was always a delicate resource balance. Now the pressures on both fronts are increasing at the same time.”
Restructuring, redundancies and the ‘Covid deja vu’ of the fuel crisis
Beyond legal reforms and AI, economic and geopolitical headwinds are shaping day‑to‑day HR decisions.
Boyd said she is seeing a clear uptick in instructions on restructurings and redundancies, as organisations respond to global uncertainty and the growing fuel crisis. It is not driven by new law, but reflects a firm trend: clients are reassessing workforce structures and cost bases, and many HR leaders are already grappling with that reality.
Dawson added that even where organisations are not pursuing permanent restructures, many are actively modelling temporary changes to cope with fuel and logistics pressures. In sectors such as mining and resources – where employers fly workers long distances, often interstate or from overseas, and rely heavily on trucking and shipping – fuel costs and supply chain volatility are massive issues. She said that “it has started to feel a bit like Covid again.”
The parallels with the pandemic are not just economic. Rapid‑fire government interventions – such as recent relief measures for truck drivers – require employers to move at speed. Dawson said clients sometimes need to react within hours to these changes. That, in turn, means HR must be across the detail just as quickly as supply chain and the executive team, back in a world of interpreting new rules on the fly, managing drafting uncertainty and still needing to give clear, actionable guidance to the business.
For senior people leaders, the message from Boyd and Dawson is not that any one reform will define the next few years – but that multiple, overlapping pressures will.
Key implications for HR include:
- Treat culture, safety and conduct as board‑level issues. Build structured reporting lines to the board on sexual harassment, psychosocial risks and systemic cultural concerns, supported by clear data and action plans.
- Invest in speaking‑up mechanisms and investigation capability. Expect more complaints – and more complex ones – and ensure you can respond quickly, fairly and consistently.
- Work hand‑in‑glove with safety and risk teams. Many emerging expectations, particularly in FIFO and other high‑risk sectors, sit at the intersection of HR, WHS and operational design.
- Set an AI strategy for HR and employees. Clarify when and how AI can be used, how outputs are checked, what must be disclosed to courts or regulators, and how you will triage the inevitable increase in AI‑assisted claims and grievances.
- Scenario‑plan for restructures and cost shocks. Rising fuel prices and geopolitical instability may force rapid changes to workforce models. Having legally robust, people‑centred playbooks ready will make a significant difference when time pressures hit.
Employment law is never dull – and for HR leaders, that means staying close to their legal advisors and proactively preparing, rather than waiting for the next wave to break.
Boyd’s final reflection was that “I don’t think the pace is going to slow down. If anything, we’re still at the beginning of many of these trends. HR is absolutely at the centre of how organisations respond.”
