AI dependence results in ‘very rare’ costs order for fired ALDI employee

Partly due to his stubborn reliance on AI as a “quasi-legal advisor”, a former employee at ALDI has been ordered to pay the costs of his doomed unfair dismissal application.

The Fair Work Commission’s deputy president Michael Easton was critical of unfair dismissal applicant Sadnan Khan for failing to “cut his losses when he had the chance”, resulting in ALDI incurring costs to defend a claim that never had any prospects of success.

Further, Khan’s submissions – which were “obviously” AI-generated – referenced information he should have known was incorrect.

“I have found that an applicant who relied heavily on artificial intelligence to start and continue his unfair dismissal claim acted unreasonably by continuing his claim after it should have been clear on his own version of events he could not win,” Easton said.

“I have taken the very rare step of ordering him to pay some of the employer’s legal costs, because his unreasonable conduct caused his former employer to incur those costs unnecessarily.”

Khan was dismissed three days before he met the six-month minimum period of employment, making him ineligible for the claim.

Despite the Commission drawing Khan’s attention to this ineligibility – confirmed in Khan’s own written submissions – he pressed on, prompting Easton to send him an email “in the hope everyone’s time and costs would not be wasted by attending the hearing”.

The email also stated a “very strong likelihood your case will not win” and there was a “very strong argument” for costs against him.

Easton said emails from the Fair Work Commission meant Khan could “not remain ignorant about the very specific and significant problem with his application”. These emails, written in plain English, drew him to specific sections of the Fair Work Act 2009.

In one of two emails in reply, Khan sent AI-generated submissions that claimed the discussion on 26 March “left the effective date of termination unresolved”. He claimed the actual dismissal was some days after he met the minimum six-month period.

It was not until the hearing that he conceded his ineligibility.

Easton made it clear there was nothing said at the hearing about Khan’s prospects of success that he would not have already known.

“If Khan had properly read for himself the emails from the Commission shortly before the hearing, he would have realised the unfixable flaw in his case and the very fixable exposure to a costs order – and immediately discontinued.”

“If Khan had properly read for himself the AI-generated material on which he relied so heavily, and compared it to the general information on the Fair Work Commission’s website, and compared it to the specific information he had been provided from the Commission member deciding his case, he would have realised that his AI arguments were just plain wrong,” Easton said.

Under section 400 of the Fair Work Act, costs in an unfair dismissal can only be awarded if a party has engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and that the act or omission caused the other party to incur costs.

ALDI’s recoverable costs were $1230, but Easton noted the actual sum it incurred would have been “significantly more”. The $1230 was the maximum claimable rate under the regulation.

“Unfortunately there has been no winner in this matter,” Easton said.

“ALDI incurred significantly more than $1230 in legal fees defending an application that should never have been made. Khan was never eligible to make his unfair dismissal claim and is now $1230 worse off than he was before he started.”

“The losses for both parties were utterly preventable.”

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