Employers under pressure to settle instead of fighting back
The surging number of claims lodged before the Fair Work Commission is putting employers at a costly disadvantage, according to experts.
Graeme Watson, former FWC vice president, and Kirsty Faichen, a partner at law firm Mallesons, set out the disadvantage facing employers in an opinion piece for the Australian Financial Review.
They warned that the surge in applications before the FWC is putting employers under pressure to settle workplace disputes rather than contest them on their merits.
"The surge in applications means that conciliators are increasingly discouraging discussion of the merits of dismissal due to their workload and time constraints," they wrote in the AFR article.
"The only question is how much an employer is prepared to pay to make the application go away."
Record surge in FWC claims
The shift in handling claims comes in the wake of a record surge in applications before the FWC.
General manager Murray Furlong said in a statement last week that the FWC had received 44,039 lodgements by the end of April, close to surpassing the 44,075 total lodgements received across the entire 2024–25 financial year, so far the highest number of applications received by the FWC.
"The increased workload is placing strain on every element of the Commission's operations," Furlong said in the statement.
"However, applications continue to rise without any signs of slowing, further increasing pressure on existing and future resources. This is unsustainable and we cannot continue to operate in the same way."
According to data cited in the AFR opinion piece, unfair dismissal claims saw a 26% increase, while unlawful dismissal applications recorded 75% growth.
In the wake of these increases, more than 90% of matters were resolved through conciliation without a decision being issued, the authors added.
The situation leaves employers in a lose-lose position, where they either pay to settle when a terminated employee files a claim, or tolerate an employee's poor behaviour to avoid the costs of litigation entirely.
In FY2024–25, the median monetary settlement for general protections dismissal matters resolved with a payment fell between $4,000 and $5,999, with 61% of such settlements under $10,000.
FWC moves to ease the load
These resolutions come as the FWC rolls out alternative dispute resolution measures aimed at clearing matters more quickly.
This includes a pilot of an Early Dispute Resolution (EDR) process, in which a dedicated team of senior officers makes early contact with parties in suitable matters in an attempt to "informally resolve the dispute."
"Early results of the EDR pilot indicate that many cases can be finalised quickly through early intervention, lowering the burden on business of responding to applications with no prospect of success where appropriate," Furlong said.
"The pilot has been extended through to September 2026, and we will continue trialling different approaches during this time."
The Commission is also trialling a new conference model in general protections dismissal disputes, in which staff conciliators focus the discussion on finding a resolution to the dispute.
"This recognises that the Commission does not perform a determinative function in this jurisdiction," it the Commission added.
The pilot, which ran for eight weeks, is now under evaluation.
"Early indications are that the process can present an efficient alternative to the current conference model," Furlong said.
"Following evaluation, the Commission will determine if the new model should be implemented on a permanent basis."
