Fair Work Act Changes 2026: Will They Actually Stop Employees Trying Their Luck?

The Fair Work Act just changed again. The Senate passed the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 this week, following an amendment from the Greens. The stated aim: help the Fair Work Commission (FWC) cope with an unprecedented flood of claims, many of them driven by AI tools.

Here is the bit that should interest every employer: the FWC is drowning. And the changes, while helpful, are unlikely to stop employees trying their luck.

Here is what you need to know.

How bad is the FWC claim problem?

Bad. Really bad.

For years, the FWC received around 30,000 lodgments per year. That was the baseline. Then something changed.

In 2023-24, lodgments jumped to 40,190. In 2024-25, they hit 44,075, a 10% year-on-year increase and 24% above the five-year average. The FWC is now projecting 50,000 to 55,000 lodgments for 2025-26.

That is a potential 70% increase in the space of just three years.

FWC President Justice Adam Hatcher has been unambiguous about why. In a speech to the Victorian Bar Association in February 2026, he said the surge coincides almost exactly with the widespread adoption of AI tools, particularly since ChatGPT launched in late 2022. He described opening ChatGPT himself, telling it he had been dismissed, and watching it produce a ready-to-file application complete with a witness statement containing, in his words, a substantially-invented story.

Justice Hatcher told the Victorian Bar Association: “This is unsustainable within our current operational, performance and funding structure.”

The breakdown is stark:

• Unfair dismissal applications: up 41% year-on-year
• General protections (s.365) dismissal claims: up 62%
• Other general protections contraventions: up 135%
• The proportion of dismissed employees then lodging a claim jumped from 75.6% to 84.4% in one year

One in six dismissed employees now lodges a claim. The system is no longer correlating with actual retrenchment rates, which means the old logic, that claims go up when times are tough, no longer holds. The driver now is accessibility.

Why are general protections claims spiking so much?

This is the part employers really need to understand.

General protections claims (also known as adverse action claims) are surging far faster than unfair dismissal claims. The reason is largely procedural.

To bring an unfair dismissal claim, an employee must have served the minimum employment period (one year for small business employers, six months for others). General protections claims have no such qualifying period. An employee on day one of their job can lodge one.

Justice Hatcher noted that a significant portion of the general protections surge appears to be unfair dismissal claims in substance, reframed by AI tools as general protections applications to get around eligibility requirements. In plain English: AI is coaching employees out of the wrong door and through the right one.

The old gatekeeping mechanism is being routed around, automatically, by a chatbot.

What do the new Fair Work Act changes actually do?

The legislation passed this week makes several practical changes to how the FWC operates. Here is a plain-English summary:

Skip the jurisdictional hearing for general protections claims

Previously, if an employer raised a jurisdictional objection (for example, arguing the employee was not actually dismissed), the FWC had to resolve that question before proceeding to conciliation. This created a catch-22 and significant delays.

Under the new rules, the FWC can move straight to conciliation or mediation on an alleged dismissal, without first determining whether a dismissal actually occurred. This streamlines the process and reduces procedural delays for both parties.

The downside for employers: it also lowers the barrier to getting to the negotiating table, which is often where settlement pressure is applied.

Paper-based determinations

The FWC can now determine certain matters on the papers, without a formal hearing, where both parties consent and the matter is suitable. This is a sensible efficiency measure for straightforward cases.

Banning repeat vexatious applicants

This is the most significant deterrent. Where the FWC dismisses an application as frivolous, vexatious, or with no reasonable prospect of success, it can now order that the applicant be banned from making further applications of that type. This is a real consequence for serial filers.

Frivolous and vexatious unfair deactivation claims can be dismissed early

Applications from gig economy workers that have no reasonable prospect of success can be dismissed at an earlier stage without a full process.

Will this actually deter employees from trying their luck?

Honestly? Partially.

The repeat applicant ban is meaningful. If someone has already had a claim thrown out as vexatious, they can be stopped from doing it again. That is a genuine deterrent for a small number of serial filers.

But for the average dismissed employee sitting at home with ChatGPT open on their phone? Not much changes. Filing a first claim is still cheap, easy, and carries almost no financial risk. The FWC does not routinely award costs against unsuccessful applicants, which means the downside for a claimant is limited.

Employment lawyers have been saying this for years. As one partner noted publicly, cost recovery is rare, reserved for extreme cases, and the threshold is so high that most businesses simply absorb the cost. That imbalance fuels the perception that lodging a claim carries nothing to lose.

Until that changes, the underlying incentive structure remains intact. These reforms improve the system’s plumbing. They do not change the economics of speculative claims for the individual employee.

What does this mean for you as an employer?

A few practical things to take away:

• General protections claims are the bigger risk right now. Any employee can lodge one, from day one, and AI tools are actively guiding them toward this path. Your exposure is not limited to long-serving staff.
• Process still matters enormously. The FWC can now skip the jurisdictional threshold for general protections claims, which means getting to conciliation faster. If your process was poor, you will feel that pressure sooner.
• Terminations need to be documented properly. AI-generated claims often include invented facts. Good contemporaneous documentation is your best defence.
• Do not assume a claim has no merit just because it reads like it was written by a chatbot. The FWC still has to deal with it, and so do you.

A client of ours recently received a general protections claim from an employee who had been with them for three weeks. The application read like it had been drafted by a very confident algorithm. It had not gone through a lawyer. But it had been filed correctly, it landed on our client’s desk, and it still cost them time and money to resolve. That is the reality of the current environment.

Frequently asked questions

What is the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026?

It is a set of amendments to the Fair Work Act 2009 introduced by the Albanese government and now passed by the Senate. The reforms are primarily aimed at helping the Fair Work Commission manage a surge in claims, many of which have been driven by employees using AI tools to prepare and file applications.

Why is the FWC receiving so many more claims?

The FWC received over 44,000 lodgments in 2024-25, compared to a baseline of around 30,000 per year before 2023. The FWC President has attributed the increase primarily to AI tools lowering the barrier to filing claims. Employees can now prepare a complete application, including a witness statement, in minutes with no legal knowledge and at no cost.

What is the difference between an unfair dismissal claim and a general protections claim?

An unfair dismissal claim requires the employee to have completed the minimum employment period (one year for small businesses, six months for others). A general protections claim has no qualifying period and can be lodged by any employee at any time. General protections claims allege that the employer took adverse action against the employee for a protected reason, such as exercising a workplace right.

Can the FWC now ban repeat claimants?

Yes. If an application is dismissed as frivolous, vexatious, or with no reasonable prospect of success, the FWC can now order that the applicant cannot make further applications of that type. This is a new deterrent measure introduced under the 2026 amendments.

Does a general protections claim always lead to a hearing?

Not necessarily. Most claims are resolved at conciliation. Under the new rules, the FWC can also determine suitable matters on the papers without a formal hearing, provided both parties consent. However, if conciliation does not result in settlement and the applicant wants to proceed, the matter can escalate to arbitration or the Federal Court.

What can I do to reduce the risk of a Fair Work claim?

Document everything. Follow a fair process before terminating any employee, regardless of their tenure. For general protections specifically, ensure you can demonstrate a legitimate and defensible reason for any action taken. If you are unsure, get advice before you act, not after. That is where we come in.

Is it expensive to defend a Fair Work claim?

It can be. Even if a claim has no merit, the cost of responding, attending conciliation, and potentially defending at arbitration adds up quickly. Cost orders against applicants are rare, which is part of why the claim rate is so high. Prevention through good HR practice and sound process is almost always cheaper than defence.

Need help managing Fair Work risk?

The claim environment is not improving. If you are not confident your termination processes are tight enough to withstand scrutiny, now is the time to fix that.

HR Gurus works with Australian SMEs to build practical, defensible HR processes that hold up when they need to. Get in touch at hrgurus.com.au.

Source and further reading

FWC President’s address on AI and the Fair Work Commission: FWC President speech, February 2026

Parliament of Australia, Bill details: Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026

FWC Annual Report 2024-25: Fair Work Commission Annual Report