Australia's national workplace tribunal has publicly condemned a sacked worker's doomed, AI-guided legal challenge — and flagged new rules that will force people who bring cases to disclose when they used artificial intelligence to build them.

In a decision handed down last week, Fair Work Commission deputy president Michael Easton took the unusual step of ordering a dismissed ALDI worker to pay A$1,230 of the supermarket giant's legal costs after finding he used AI as a "quasi-legal advisor" to pursue a case that had no realistic prospect of success. For more context on this story, see our ongoing artificial intelligence updates.

"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," Easton said in the decision, which was reported by the ABC. "If Mr Khan had properly read his own AI generated replies … he would have known that his case was doomed."

A Case Built With ChatGPT

Sadnan Khan told the ABC he used a paid version of ChatGPT to help him decipher the legal precedents the tribunal and ALDI had cited against him. As a self-represented litigant with no legal training, he said, he needed somewhere to turn to understand the case law being quoted at him.

"They're quoting me cases, right … and I, as not a legal personality, have to go somewhere to do the study," Khan said. "The main thing AI suffers is they do things not the Aussie [court] way."

Khan, who originally came to Australia from Bangladesh, admitted to a telling mistake: he submitted documents to the tribunal that still contained leftover instructions he had typed into the AI chat, an error that laid bare exactly how his filings were produced. He now argues that comprehension barriers shaped the prompts he fed the model. Looking ahead, he is undeterred — he plans to appeal using "a mixture of Claude and ChatGPT … and two or three [others]" to get a range of views.

Cases Are Surging, and AI Is Part of the Reason

The Khan case is not an isolated anecdote. A report commissioned by the tribunal into AI use by litigants, cited by the ABC, found that generative AI was in part responsible for a 40 percent surge in the commission's caseload between 2023-24 and 2024-25.

The research painted a detailed picture of who is turning to AI in workplace disputes:

  • 40 percent of surveyed cases involved at least one litigant using AI
  • AI use was concentrated among younger and self-represented litigants
  • More than three-quarters of that group used ChatGPT, and 60 percent of them relied on the free version
  • Non-English speakers were twice as likely to use AI as native English speakers

The tribunal was designed to help self-represented litigants navigate the system without a lawyer. AI tools have, in effect, handed every applicant a low-cost legal researcher — one whose output can be fluent, confident, and wrong.

New Disclosure Rules From October 20

From October 20, applicants to the Fair Work Commission will be required to disclose whether they used AI in preparing their cases. The commission has also implemented a template aimed at helping AI-dependent litigants present their arguments in a form the tribunal can properly assess.

The move makes Australia one of the first jurisdictions to build AI disclosure directly into a mainstream workplace tribunal's processes, and it reflects a practical concern: commissioners need to know what they are reading, and litigants who outsource their judgment need to understand the material they file.

Easton's criticism of Khan centered on exactly that gap — the AI's confident replies were, in the deputy president's words, "plain wrong," and Khan did not check them closely enough to realize it.

The Other Side: AI as an Access-to-Justice Tool

Notably, the tribunal did not treat AI use as inherently problematic. It acknowledged that AI is improving access to justice for applicants with genuine, meritorious claims who might otherwise have been deterred from acting at all. Sophisticated users, the decision noted, approach AI critically as "one tool among many."

One of those sophisticated users is Gregory Baker, a computer science lecturer at Macquarie University who this month became the first person to successfully challenge Australia's casual employment laws using a team of AI agents. Baker, who teaches AI, told the ABC his Fair Work claim began when he asked ChatGPT for career planning options after the university declined to convert him from a sessional to a permanent employee.

"I used to be famous for saying to my students, 'if you don't use AI in my class, you will fail'," Baker said.

A Warning Shot for Litigants Everywhere

The commission's message is likely to echo beyond Australian workplace law. Self-represented litigants using chatbots to parse precedents are now a measurable phenomenon, not a hypothetical one — and tribunals are adapting their rules in response.

For the growing population of AI-assisted litigants, the lesson from the ALDI case is blunt: the tribunal will not accept "the AI told me" as an excuse, untreated AI output can carry real financial consequences, and from October the system will know when it is looking at machine-assisted filings.

---

Stay Ahead of AI

Get the latest AI news, analysis, and breakthroughs — all in one place.

Read more AI news →