2025–26 was the year of the worker, FWC Annual Report shows

The last financial year saw major updates to the national minimum wage, modern awards, classifications and flexibility arrangements, while businesses continue to feel the strain. Against this backdrop, employers are being urged to prepare for further changes to the workplace relations environment.

With Fair Work Commission (FWC) president Justice Adam Hatcher warning that an unprecedented volume of applications means traditional case management is now unsustainable, HR Leader spoke to employment lawyers and representative groups to examine what the Fair Work Commission’s report signals for the employment landscape.

Of the report’s key findings, lodgments increased by 80 per cent over the last five years, with general protection claims rising by 123 per cent and unfair dismissals growing 40 per cent, leading to a commission record of 50,162 closed cases over the last financial year.

In line with ongoing coverage, GenAI has been flagged as a significant impactor on additional workload and time constraints.

According to Patrick Will of Liquid Employment Lawyers, the report reflects increased worker entitlements and support, especially due to historic wage increases for female-dominated sectors and junior workers – but while these changes have led to improved employee wellbeing and cost-of-living relief, businesses are feeling the strain.

He said: “Small and medium enterprises face a compounding financial burden of higher payroll expenses, increased superannuation obligations and the costly, operational drain of defending these digital FWC claims.”

Harmers Workplace Lawyers executive counsel and team leader Amy Zhang said the data suggests employers should prepare for more claims from employees, including self-represented workers with the assistance of AI, as well as longer processing times, and potential procedural changes from the commission in response to the increasing workload and resourcing pressures.

With respect to procedural changes, the FWC has implemented two landmark changes in the last few months: digitisation of the application portal and the release of an AI Guidance Note.

Noting the changing nature of applications, Zhang said the number of flexible work arrangement disputes reflects where employees place their value, and their willingness to bring such matters to the regulator.

“Employers should look to take a proactive and preventative approach to avoid disputes escalating into the commission, and should stay on top of ongoing reforms to the commission and the Fair Work jurisdiction,” she said.

Will agreed that “employers should proactively review their compliance with updated Modern Awards to avoid underpayment risks and prioritise early, informal dispute resolution to avoid escalating tribunal claims”.

He said: “Litigants should expect to use the new MyFWC portal, experience heavily overhauled case management practices and see tech-assisted triage like AI-based checklists and staff-led early intervention.”

This worker-oriented period and ongoing legislative and procedural shifts have been divisive in the employment sector, with Australian Industry Group chief executive Innes Willox noting that the system is facing an untenable burden that is also “placing unsustainable weight around the neck of employers”.

Willox told HR Leader that the significant increase in workplace relations litigation will only continue as more avenues are opened for legal action, adding that the recently announced Fair Work Court will likely “make it even easier for employees and unions to commence hopeless claims that employers will be left dealing with”.

“More needs to be done by government to reduce the wasted costs and unnecessary disruption caused by the all too often meritless claims now being routinely confronted by industry,” Willox said.

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