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, including AI-generated material citing non-existent cases. This has real consequences for employers, even when claims have little merit.

• 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, small issues can quietly build into costly disputes.  This is where emotionally intelligent leadership and psychological safety becomes critical. Not as a “soft” skill, but as a practical skill that allows concerns to surface early, so trust and standards are 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: navigate 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 service delivery success.

Why clear and kind, performance conversations work.

One of the most effective (and under-used) ways to prevent escalation is training managers to hold clear and confident performance and accountability conversations that are grounded in care and collaboration, to achieve high standards. This approach builds a healthy workplace culture, and reduces the likelihood that employees will seek external escalation.

When Issues Arise: 5 Tips to Lead the Conversation Forward

1) Build in an extra 10 minutes for your team 1 on 1s. 2). When problems are being loaded into the meeting, remember to breathe, as this will calm your nervous system and open up better thinking. 3) When you hear a problem, genuinely acknowledge the problem. 4) Invite joint discussion of the problem together, with a focus on what the preferred future state is, rather than problem rumination. 5) Agree on at least 1 action point to progress the problem to that future state.

Why This Work Matters to Me

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

• Lost time and money when managers and leaders cannot lead well through emotional complexity. It creates delays in addressing serious issues early, before they reach a legal tipping point, and cost big $$$s.

Leadership skill and confidence under pressure 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 costly claims and disputes?

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 psychological safety, and manager development in clear, kind performance and accountability conversations.

If this article resonates and you find yourself thinking, I want my managers trained to lead clearer, more confident performance conversations, you’re not alone, your thinking is spot on. At People Alignment, we blend our extensive experience in HR, neuroscience, EQ and practical nous, and partner with organisations who want to upskill their managers. They can then confidently return their focus to:

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

Equip your managers and prevent costly claims and delays. Contact People Alignment to start the conversation.