Underpayments, psychosocial hazards, AI litigation and more – experts share what HR teams need to act on now
The Employment Law Masterclass 2026 has come and gone, bringing together some of Australia's leading employment, safety and industrial relations lawyers for a day-long deep dive into the issues shaping HR practice.
Chaired by Katie Kossian, special counsel for employment, safety and people at Maddocks, the program moved from wage compliance and flexible work through to artificial intelligence's growing footprint in tribunal litigation, offering practical, case-based guidance for HR directors, CHROs and in-house counsel navigating an increasingly complex regulatory landscape. Here is a breakdown of what was covered, session by session.
From underpayments to penalties: tackling wage compliance hotspots
Kate Pennicott, a partner at MinterEllison, opened the technical program with a session on wage compliance, unpacking how organisations should approach a payroll "health check" and what a defensible remediation program looks like. Pennicott said the general rule of thumb for a remediation period is six years, matching the maximum period an employee could bring a wages claim, though the Fair Work Ombudsman (FWO) will sometimes expect employers to look back further if records allow it.
She said the FWO's guidance sets clear expectations around self-reporting, noting the regulator prefers to hear about issues directly from employers rather than through individual complaints, and that this materially affects the enforcement outcome an organisation can expect.
Pennicott also flagged a shift in enforcement trends, from enforceable undertakings for large, cooperative organisations towards growing use of class actions, particularly in the retail and hospitality sectors – a trend she expects to continue, alongside ongoing litigation such as the Coles and Woolworths annualised salary proceedings.
Employers reviewing their own exposure may find HRD Australia's recent analysis of underpayment risk for salaried employees a useful starting point, alongside the Fair Work Ombudsman's payroll remediation program guide, which sets out the regulator's expectations for a model program in detail.
Flexible work and new entitlements: where HR must draw the line
Helen Lee, a partner at Dentons in Melbourne, and Angela Cartwright, a senior associate at Dentons in Sydney, walked attendees through the fast-moving flexible work landscape. Lee cited Workplace Gender Equality Agency data showing 98 per cent of large employers now offer part-time work and flexible hours, while 88 per cent offer hybrid arrangements – yet fewer than a third measure whether those policies are actually working.
Cartwright took attendees through the Fair Work Act's section 65 framework for flexible work requests, including the 21-day statutory response window and the civil penalties for missing it, which can reach $546,000 for larger businesses.
She walked through five recent Fair Work Commission (FWC) decisions illustrating where employers got the process wrong, including a case where a manager reversed an approved arrangement without giving reasons, and another involving a warehouse worker's request to carry a phone as an exception to a safety policy, which the Commission found could fall within the "working arrangement" definition in section 65 even though the specific request was ultimately refused on reasonable business grounds.
Respect@Work in practice: positive duty, sexual harassment and NDAs
Melini Pillay, principal at McCabes, addressed the shift under the positive duty from a complaints-based model to one focused on prevention.
She pointed to the 2022 Time for Respect survey finding that only 18 per cent of workplace sexual harassment incidents are formally reported, arguing that businesses relying solely on policies and annual training modules are falling short of the Australian Human Rights Commission's seven standards for compliance.
Pillay also covered Victoria's new restriction on non-disclosure agreements (NDAs) in sexual harassment settlements, which took effect on 1 July 2026 and requires that any NDA be requested by the complainant, rather than offered or required by the employer, with a mandatory 21-day review period. She said other jurisdictions, including New South Wales, are expected to consider similar reforms.
Psychosocial safety mandates: new regulations, enforcement and HR's evolving duties
Alana Rafter, senior associate at Australian Business Lawyers & Advisors, warned that safety regulators – particularly SafeWork New South Wales – are moving from education to active enforcement on psychosocial risk. Rafter cited a Coroner's Court of Victoria case in which an employer was fined almost $400,000 for failing to identify psychosocial hazards, even before the introduction of the current regulations.
She outlined the hierarchy of controls that now applies to psychosocial hazards nationally, stressing that information, training and instruction cannot be used as an employer's sole or primary control measure.
Employers wanting a practical starting point can turn to HRD Australia's guide on how to assess psychosocial hazards, or to Safe Work Australia's model code of practice for managing psychosocial hazards, which underpins the state-based codes that regulators are now actively enforcing.
When employees can't perform: HR strategies for ill and injured workers
Bridget Clark, a partner at Addisons, took attendees through the difficult territory of managing long-term illness and injury, distinguishing between work-related and non-work-related absences and the different evidentiary obligations each triggers.
She discussed when it becomes reasonable to direct an employee to attend an independent medical examination (IME), pointing to a recent Fair Work Commission case involving an Amazon delivery station associate whose dismissal was upheld after she repeatedly refused to attend a properly directed IME.
Clark also worked through cases involving River City Ferries and Monash Health, both of which succeeded in defending unfair dismissal claims by properly directing independent medical assessments and documenting a genuine, evidence-based process, in contrast with a case where an employer's minimal communication during an investigation was found to support a general protections claim.
Refresh: conducting defensible investigations in an era of increased scrutiny
Adam Battagello, a partner at Lander & Rogers, focused on what makes a workplace investigation stand up to scrutiny, arguing that process is as important as substantiating the underlying conduct.
He set out the three stages of a defensible investigation – pre-investigation planning, the conduct of witness interviews, and the final analysis – and cautioned against covert recording, confidentiality guarantees that can't actually be kept, and interrupting witnesses to pin down exact dates rather than letting their recollection flow.
Battagello also addressed artificial intelligence's growing role in investigations, warning employers against uploading confidential witness material into public AI tools, and pointed to a SafeWork New South Wales case against the Department of Education in which improvement notices were issued over investigation delays and inadequate communication with the subject of the investigation.
He noted HRD Australia's coverage of the newly mandatory NSW safety codes of practice as a useful reference for organisations reviewing their own investigation timelines.
Restructures that stand up: consultation, redeployment and fairness
Rhian O'Sullivan, senior legal counsel at Energy Queensland, unpacked the three elements of a genuine redundancy under section 389 of the Fair Work Act, referencing Australian Bureau of Statistics data showing 268,000 people were retrenched in the year to February 2025.
She highlighted the High Court's Helensburgh Coal decision, which confirmed that redeployment assessments must look broadly across an employer's workforce structure, including whether work being done by contractors could reasonably be brought back in-house, rather than being limited to existing vacancies.
O'Sullivan also flagged a recent Fair Work Commission case in which the use of ChatGPT to draft a redundancy communication was found to have pre-empted a final decision, rendering the consultation that followed illusory.
The 2026 IR playbook: winning strategies for the new bargaining landscape
Peter McNulty, a partner at Ashurst, gave attendees a rundown of the current enterprise bargaining landscape, noting that award wages rose 4.75 per cent in the Fair Work Commission's most recent annual wage review and that 200,000 working days were lost to industrial action in the year to March 2026.
He said the shift toward multi-employer bargaining, regulated labour hire arrangement orders and intractable bargaining declarations has fundamentally changed the dynamic between employers and unions.
McNulty urged employers to start preparing for bargaining at least six to twelve months in advance, warning that current settings around intractable bargaining generally prevent employees from going backwards on terms once a matter is referred to arbitration.
Self-represented litigants in the AI era: why cases drag on, costs spike
James Parkinson, a partner at Kingston Reid, presented Fair Work Commission data showing the tribunal received 44,000 lodgements in the 2024–25 financial year, a 24 per cent increase on the five-year average, with the Commission attributing much of the growth to rising use of generative artificial intelligence by self-represented applicants.
Parkinson pointed to recent cases, including one where a litigant came close to being held in contempt over fabricated evidence, and another in which a tribunal rejected witness evidence after the applicant was found using AI-generated notes in the witness box.
He recommended employers consider seeking oral evidence rather than written witness statements where AI use is suspected, and flagged that costs orders, while difficult to enforce, remain available against parties who unreasonably increase costs through AI misuse.
Ask the experts: panel Q&A
The day closed with a panel discussion featuring Cynthia Elachi, a partner at Clayton Utz, alongside earlier speakers Peter McNulty and Melini Pillay.
Elachi said she is seeing a sharp rise in large-scale restructures, and urged employers to look broadly across the enterprise for redeployment opportunities rather than assuming employees won't accept a lower-status or lower-paid role. She also warned against including anything resembling sick leave records in redundancy selection criteria, describing the practice as unlawful and discriminatory.
The panel also discussed the rise of AI-driven counter-complaints during performance management, with Elachi advising employers to investigate such complaints promptly and keep a clear paper trail, rather than assuming they are made in retaliation.
That's a wrap on the Employment Law Masterclass 2026. For HR leaders working through any of these issues in their own organisation, the message running through every session was much the same: document the process, communicate early, and don't make assumptions.
