By the end of the 2025–2026 financial year, the workload of the Fair Work Commission (FWC) is expected to have increased by a staggering 70% in just three years.

According to FWC President Justice Hatcher, this sharp rise is largely being driven by the growing use of AI tools by self-represented applicants. In many instances, these tools are being used to invent fake unfair dismissal and other workplace complaints.

Consequently, the FWC has noted delays in hearings, fewer opportunities for conciliation, and a decline in the quality of submissions, many of which include AI-generated material referencing non-existent matters.

• This isn’t just a legal or compliance issue.
• This changing risk landscape is a red alert signal to employers.

Whether a claim is valid or not, employers are required to respond, and often, to lengthy, complex applications.  That response still involves:

• Time and energy from leaders and the HR Team
• Legal costs
• Emotional load on those involved, and the HR Team
• Disruption to teams and culture
• Time away from critical income generating work

In this environment, prevention becomes far more powerful than defence.

Where Most Workplace Claims Begin

They usually start in moments like:

• A performance conversation that didn’t land well.
• Feedback that was delivered poorly, or heard incorrectly.
• Conflict or something that seemed off that was avoided rather than addressed.
• An employee who was unheard, or told they couldn’t have a voice.

When managers aren’t trained in navigating emotionally charged conversations, issues quietly build into something much bigger.  This is where emotional intelligence and psychological safety becomes critical. Not as a “soft” skill, but as a practical leadership skill that allows concerns to surface early, with trust and standards upheld.

And this is not an isolated Australian trend.  A recent International Business Times article explores what it calls the “$8.8 trillion problem AI can’t solve”, emotional intelligence in leadership.  The article reinforces a critical truth: while AI is truly extraordinary in so many areas (automation, pattern recognition, analysis, modelling, innovation, to name just a few), it cannot: do the navigation of emotional distress for you, navigate complex human and power dynamics, repair trust, or read subtle social clues. All of these human skills provide essential care for people, and enable project, product and services delivery.

Why Coaching-Style Conversations Make Such a Difference

One of the most effective (and underused) ways to reduce escalation of inflammatory situations is training managers in coaching style conversations, enabling them to:

• Stay curious rather than defensive.
• Ask questions before making assumptions.
• Address issues early and collaboratively.

These conversations significantly reduce the likelihood that employees view they have no option other than external escalation.

Emotional wisdom / relational capability is the essential business safeguard.

Why This Work Matters to Me

I’ve recently completed another coaching certification, Emotional Intelligence Coach Foundations, deepening my knowledge skills around emotional intelligence-based leadership.  Because what I’m seeing across organisations is this:

• Businesses need people who can navigate emotional complexity, and address issues early, before they reach a legal tipping point.

Emotional intelligence is not a “nice-to-have”.  It’s critical leadership infrastructure.

A Question for Leaders

How confident are you that your managers are equipped to prevent unnecessary escalation?

Because once a matter reaches the FWC, even if you’re successful, a cost has already been paid. 

The organisations that will sustain in the years ahead will be those that invest early in manager capability, psychological safety, and coaching skills.

If this article resonates and you find yourself thinking, I want my managers trained, you’re not alone, and you’re asking the right question.

At People Alignment, we partner with organisations who want to upskill their managers, so their focus can be returned to:

• More productivity
• More innovation
• More sales or services delivered

Manager capability is a strategic investment, not a cost. Contact People Alignment to discuss how we can support your leadership uplift.