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Month: July 2026

Categories
Perspective

When AI Sounds Right but Gets It Wrong: What the Fair Work Commission Is Warning Employers

The Fair Work Commission has warned against treating AI as a shortcut in workplace matters.

Its draft guidance says AI can be helpful, but it is not a substitute for legal advice, award interpretation or HR compliance expertise, and that AI-generated material may be “inaccurate, incomplete, out of date or just made up.”

The biggest danger with using AI in these scenarios is that it is plausible advice that sounds polished, confident and legal, but is still wrong in ways that matter. The Commission has also warned that AI tools may give unrealistically optimistic predictions about prospects and compensation, which can encourage claims that should not be pursued. This is not a fringe issue either. The Commission’s own workload has increased by over 70 per cent in three years, a rise its President has linked directly to the growing use of AI tools by people preparing claims (Source: Fair Work Commission).

Where AI gets it wrong

Employment issues are rarely straightforward. Before anyone drafts a letter or starts a process, someone needs to identify the real issue, the right law and the right risk.

AI often gets this wrong by:

  • citing the wrong section of the Fair Work Act or applying a section that does not fit the facts;
  • relying on outdated law in fast-moving areas such as casual employment, fixed-term contracts, flexible work, labour hire and general protections;
  • applying the wrong jurisdiction, including overseas or state-based principles that do not fit the national workplace relations system;
  • inventing or misquoting cases, or citing decisions that do not support the point being made.

It can also miss the threshold question entirely. Is the employee in the national system? Does a modern award or enterprise agreement apply? Have they completed the minimum employment period? Is the issue really unfair dismissal, or is it general protections, discrimination, workers compensation or adverse action? If the foundation is wrong, the answer built on top of it is wrong too.

This is not a rare glitch. Stanford University research found that general-purpose AI tools hallucinate on legal questions between 69 and 88 per cent of the time, inventing authorities or misstating the law. In an area as technical as employment, that is not a margin of error you can afford to build decisions on.

Awards are not simple

Modern awards are highly technical. Coverage depends on the employer’s industry, the employee’s actual duties, classification definitions, exclusions, higher duties, allowances, overtime triggers, rostering provisions and the interaction with the National Employment Standards.

That is not a keyword exercise. It requires legal and practical analysis. Even experienced HR professionals need time to work through award coverage properly, and AI often skips over the nuance that decides the outcome. Even a tool built specifically for the task cannot be trusted to get this right on its own.

Why employers should care

A wrong AI answer can create real exposure. It can lead to underpayments, incorrect classifications, invalid contract terms, flawed termination processes, sham redundancy risks, missed consultation obligations or unlawful deductions.

Dismissal matters are especially risky. AI may produce a professional-looking letter but miss award obligations, procedural fairness, redeployment issues, the employee’s history, or whether the employee has exercised a workplace right. That is how a tidy draft turns into a messy claim.

Contracts and policies are no safer just because they read well. AI can produce clauses that are unenforceable, inconsistent with the National Employment Standards, inconsistent with an award, or too generic to reflect the business’s real processes.

A live example

In Hoverd v M & J D Pty Ltd FWC 1013, the applicant admitted using AI to draft submissions and relied on contract clauses and award provisions that did not exist. The Commission dismissed the application and invited the employer to seek costs.

That matters because it shows how easily AI can generate material that sounds legal but is disconnected from the real contract, award or facts. If that can happen in Commission submissions, it can happen just as easily in an internal HR process.

Privacy matters too

There is also a confidentiality problem. The Fair Work Commission’s draft guidance warns users not to provide personal or confidential information to public AI tools.

That is especially relevant in HR, where matters often involve medical information, payroll data, complaint material, disciplinary history and sensitive investigations.

If it should not be shared broadly, it should not be going into a public AI prompt.

Closing

AI can be a useful assistant in various aspects of business, but it is not an HR adviser, employment lawyer or award interpreter. In Fair Work matters, the cost of a confident wrong answer can be far greater than the time saved. And in the time you have spent prompting it over and over, you probably could have picked up the phone and called us.

This article provides general information only and does not constitute legal or professional advice. Before making any decisions in a workplace matter, always consult a qualified HR or workplace relations professional, and where appropriate seek legal advice. For guidance tailored to your business, get in touch with the team at Inject.

Categories
Leadership Perspective

Leading Your People Through This Year’s Budget Changes

The 2026–27 Federal Budget, handed down in May, introduced a range of changes affecting small and medium businesses, with many taking effect this financial year.

Much of the discussion have focused on the commercial and policy implications. Our focus is to help leaders understand what change may mean for their people and the way they lead through uncertainty.

When government settings shift, businesses may need to adapt. That could mean reassessing workforce plans, pausing recruitment, redesigning roles or, in some cases, making difficult decisions about redundancies. While the catalyst may be external, the impact is felt internally through culture, communication and each employee’s experience of change.

For small and medium business leaders, this is where leadership becomes most visible. The question is not only what the Budget means on paper, but how to respond in a way that is practical and people-centred.

Workforce Planning

Workforce planning is about ensuring the business has the right people, in the right roles, at the right time to meet both current and future needs. It requires leaders to step back and assess whether the organisation’s structure, capability and capacity still align with where the business is heading, particularly when market conditions or government policy shift.

A planned approach makes workforce decisions more deliberate and less reactive. That may involve slowing or redirecting recruitment, reshaping roles, redistributing responsibilities, or identifying new capability requirements before defaulting to headcount reductions.

When conditions shift, the aim is not to act quickly for the sake of action. It is to replan with purpose.

Taking the time to review structure, capability and future needs can lead to stronger people decisions and fewer reactive moves later. This is where Inject HR supports clients through practical workforce planning and HR consulting, helping leaders assess what is changing and plan their next move with greater clarity.

Redundancies

For some businesses, adapting to change may involve difficult decisions about roles.

A redundancy occurs when a business no longer requires a job to be performed by anyone. This may arise through restructuring, a downturn, closure, relocation or technology change. It is about the role no longer being needed, rather than simply the person leaving.

Under Australian workplace law, a redundancy is only genuine where the role is no longer required, consultation obligations under the relevant award or agreement have been met, and it would not have been reasonable to redeploy the employee elsewhere in the business or an associated entity.

For leaders, this means redundancies need to be planned, documented and communicated with care. They should never be treated as a quick operational fix.

How a redundancy process is handled shapes trust well beyond the people directly affected. Employees notice how colleagues are treated as they leave, how clearly leaders explain the reasons for change, and whether those remaining are informed and supported through the transition.

Inject HR supports businesses through this process with practical HR advice, helping leaders manage consultation, communication, compliance and the people impact with greater confidence and care.

Psychological safety

Psychological safety is the environment created when people feel able to speak up, ask questions, raise concerns and contribute honestly without fear of negative consequences.

During periods of uncertainty, it becomes particularly important. Silence and speculation can quickly fill the gaps left by unclear communication. A team that reads about Budget changes in the news but hears nothing from its own leaders may begin assuming the worst before any decision has been made.

Psychosocial hazards are aspects of work that may cause psychological harm. They can include poor support, lack of role clarity, bullying, harassment, high job demands and poorly managed organisational change.

Across Australia, employers are expected to eliminate psychosocial risks so far as is reasonably practicable. Where that is not possible, they must minimise those risks so far as is reasonably practicable.

Psychological safety is therefore not simply a culture concept. It is part of meeting health and safety responsibilities.

When change is handled poorly, communication is delayed or expectations are unclear, psychosocial risk can increase, along with the likelihood of harm. Clear consultation, respectful communication, role clarity and thoughtful change management are practical ways to reduce that risk during restructures or other Budget-driven shifts.

 

Leading yourself and your team through change

Leading through change begins with leading yourself.

In periods of pressure, teams notice not only the decisions their leaders make, but how they make them. They notice whether leaders go quiet, become reactive or remain steady, visible and clear.

Tommy Sim, Managing Director of Inject HR, explores this in the Lead to Grow episode Raise Your Floor. The episode focuses on building self-awareness and strengthening your baseline as a leader, so you can respond rather than react when difficult decisions are on the table.

From there, communication becomes critical. When messages are unclear, delayed or inconsistent, people fill the gaps with their own assumptions. That can increase anxiety and erode psychological safety.

In the Lead to Grow episode Poor Leadership Communication Has a Price, Tommy explores how leaders can communicate during restructures and periods of uncertainty so people feel informed, respected and not blindsided by decisions.

Closing

Whether you are reviewing your structure, planning future capability, managing a difficult transition or simply trying to understand what change means for your team, we can help you move forward with clarity and confidence.
 

Get in touch to discuss what is changing in your business and how to respond in a way that protects your people, your culture and your ability to perform.