There has been a sharp rise in employee termination claims in the Fair Work Commission (FWC), particularly unfair dismissal and general protections (adverse action) matters – there has been a 57% increase on the three-year average reported in the first quarter of the 2025-26 financial year. This trend means termination decisions now carry a higher legal, financial and reputational risk for employers than in previous years.

One of the key reasons behind this surge is the increased use of AI and paid agents to generate GP applications. While many of these employee termination claims have little prospects of success, employers still need to respond to such claims and expend significant time and resources, creating pressure to settle matters early, regardless of the strength of the claim.

General Protection claims are attractive to employees because they:

• do not require a minimum employment period / probationary period
• involve uncapped compensation
• operate under a reverse onus of proof once a prohibited reason is alleged

The Commission has also raised concerns about the growing role of paid agents in such claims.  Unlike lawyers, paid agents operate outside any regulatory or professional conduct framework and often rely on high-volume, no-win no-fee business models. This has contributed to an increase in such claims being pursued with a focus on early monetary settlement rather than the resolution of genuine disputes.

The increasing use of AI tools has significantly reduced the time and effort involved in commencing employee termination claims. While these applications may be generically framed, they still require employers to devote time and resources to responding.

Reforms introduced by the Commission

In response, the Commission introduced a series of case-management reforms in late 2025 aimed at improving efficiency and strengthening early case management.

Key changes include:

• More detailed application and response requirements: These must clearly set out alleged breaches and jurisdictional objections, replacing the previous “tick-the-box” approach.
• Early determination of representation: Parties must explain their requests for legal or paid-agent representation, which will generally be determined before conciliation.
• Stricter treatment of late applications: Out-of-time applications must justify exceptional circumstances and may be dismissed without requiring an employer response.

While these reforms are welcome, they primarily address how claims are managed rather than the factors driving the increase in employee termination claims. Employers should expect increased scrutiny when responding to such claims. Jurisdictional objections must be clearly articulated, and poorly prepared responses may limit an employer’s ability to rely on those objections later.

Looking ahead to 2026

Further reform is already underway. In 2026, the Commission will commence broader reviews of:

• general protections claims not involving dismissal, and
• unfair dismissal applications.

These reviews are expected to consider additional procedural changes to manage workload and address the continued rise in claims.

Make sure you contact us for advice before taking any steps to terminate an employee’s employment for any reason.