Worker ordered to pay employers legal costs after using AI to pursue a ‘hopeless’ unfair dismissal claim.

Credit: Alan Morris, iStock

AI has paved the way for a steep rise in unfair dismissal claims, but quantity doesn’t equal quality, and in a recent ruling the Fair Work Commission (FWC) has ordered a former ALDI employee to repay the company $1,230 compensation.

Now, FWC deputy president Michael Easton has sent a clear message – using AI as a “legal advisor and then blindly submitting AI-generated outputs” wastes both the Commission and employers’ time, and this time will be compensated for by the employee.

To make an unfair dismissal claim, an employee needs to have worked for a minimum of six months in their post.

In this case, a spokesperson for the supermarket chain, ALDI, had informed the defendant of their dismissal three days prior to this cut-off point – meaning the employee wasn’t eligible to make a claim.

Easton had contacted the defendant many times to “explain to him well ahead of the hearing, in plain English, why his case was unlikely to succeed.”

Nevertheless, the defendant ignored this advice, responding with AI-generated emails that still contained AI drafting notes such as: “Here is your **final clean copy-paste version**, with today’s date inserted as the dismissal date.”

Ultimately, the matter was taken to a hearing, the defendant’s claim was unsuccessful, and they were ordered to pay the maximum claimable compensation under the Fair Work Regulations of $1,230.

What can employers learn from this case?

The bar to drafting an unfair dismissal claim has dropped. The head of Advisory Operations at Citation HR, Ilana Kaye, stresses that AI has made it much easier for employees to “sometimes overstate their rights, and to draft formal grievances with speed and complexity that previously required a lawyer.”

In their report the Commission praised ALDI for their swift, accurate, and documented response to the complaint. These three pillars are the foundations for a strong defence:

• Have a human response: the best response to an AI-drafted claim is human guidance from professionals that know the ins and outs of termination processes.
• Have your documentation ready to go: don’t wait for a complaint to arrive to get your systems in order. In this case, ALDI had the employee’s payroll records and documents stating exactly when they had been informed of their dismissal ready to present.
• Have a basic AI policy: with clear guardrails on how AI can and can’t be used.

Don’t fight AI with AI

Businesses are feeling the pressure too. In Citation Group’s 2026 Workforce Pulse Report, 25 per cent of Australian business leaders cited ‘unfair dismissal and disputes’ as a top people management issue.

Terminations are tricky, but AI isn’t the ticket to a stress-free process. Our free webinar, ‘Termination without tears’, will take you through the fair dismissal process, so you know what to do and when.

Registrations are open now – join us on 2 September, 11am AEST.

*AI has not been used in the drafting of this blog post.