FWC says the employee acted unreasonably for continuing the claim despite its warnings
A terminated Aldi worker who used artificial intelligence to make an unfair dismissal claim has been ordered to pay his employer's legal costs after ignoring repeated warnings from the Fair Work Commission (FWC) that he was arguing the wrong point.
The FWC, in a rare move, ordered the employee to pay some of his former employer's legal costs of $1,230.
"I have taken the very rare step of ordering him to pay some of the employer's legal costs, because his unreasonable conduct caused his former employer to incur those costs unnecessarily," FWC Deputy President Michael Easton said in the decision.
The ruling comes after the worker ignored repeated warnings from the FWC that his unfair dismissal claim was "hopeless" and unlikely to succeed.
"I formed the preliminary view that [the employee's] case was hopeless because, on his own version of the facts, he had not met the minimum employment period requirement and was therefore not eligible to make his unfair dismissal claim," Easton said.
The relevant end date for the purposes of calculating the minimum employment period is the date the employee was notified of the dismissal, according to the Fair Work Act.
The employee, in this case, was notified of his dismissal three days short of the required six-month minimum employment period, a fact that was never put in dispute.
The problem, however, was the employee's AI-generated claim was focused on the date the dismissal took effect, which Easton said was a "different and irrelevant" date in the case.
Relying on the AI-generated claim
Easton said the employee was informed in multiple instances before the case was heard that he was unlikely to succeed.
The employee, however, persisted and continued to reply to the FWC's attempts at deterrence with AI-generated submissions.
"[The employee's] AI-generated email once again addressed the wrong end date and repeated the same irrelevant AI-generated arguments," Easton said. "[The employee's] email did not engage, at all, with the matters raised in the earlier email from the Commission."
And even with the warning that Aldi would seek a costs order if the employee persisted with the case, the employee still proceeded with the claim, sending "two further AI-generated submissions" that continued to address the wrong end date.
"For the following reasons I have decided that [the employee] should be ordered to pay an amount towards the legal costs ALDI wasted in preparing for and attending a hearing that should never have taken place," Easton said.
According to the FWC deputy president, while the employee conceded during the hearing that he had not completed the minimum employment period, Aldi had already incurred additional costs in preparing for and attending the hearing.
"The hearing should never have taken place because [the employee] should have realised days before the hearing that he had no reasonable prospects of success," Easton said.
The FWC deputy president stated that the employee acted unreasonably in deciding to pursue the case despite discouragement from the FWC.
"It is not reasonable for a party to simply ignore concerns raised by the very specialist tribunal in which the claim was made, let alone ignore the detailed 'preliminary view' of the Commission member making the decision," Easton said.
He added that if the employee had properly read for himself the FWC's emails, he would have realised the "unfixable flaw" in his case and immediately discontinued.
"If [the employee] had properly read for himself the AI-generated material on which he relied so heavily, and compared it to the general information on the Fair Work Commission's website, and compared it to the specific information he had been provided from the Commission member deciding his case, he would have realised that his AI arguments were just plain wrong," Easton said.
"[The employee] could have and should have chosen to cut his losses when he had the chance."
Surge in AI-generated claims at FWC
The case marks the rare instance in which the FWC has required a former employee to pay the employer's legal costs, an incident that stems from the worker's use of AI in pursuing his claim.
FWC has called out the practice of using AI as a "quasi-legal advisor" following a sudden surge in claims that has disrupted its workload over the past years.
In 2023–24, the commission received around 40,000 cases in total, a surge from the number of matters lodged with the commission in the past two years. The increase continued in 2024–25, when it jumped to more than 44,000 cases.
FWC President Justice Adam Hatcher said earlier this year that they are estimating a total between 50,000 and 55,000 for 2025-26, which he noted will be "another record."
"The clue that the growth in lodgments was AI-driven first became apparent by the widespread use of AI-generated language in the applications being filed," Hatcher previously said.
"Once you learn what this looks like, it becomes pretty easy to spot."
