Commonwealth Bank of Australia (CBA) has reversed a decision to make 45 employees redundant after the tribunal found the bank did not “properly explain why the roles were redundant.”

A number of CBA staff were told their jobs were being made redundant as a result of a new AI chatbot. The bank’s decision to fire employees has been described as a “massive win” for the Finance Sector Union (FSU).

Australia’s largest bank is among a growing number of financial institutions looking to overhaul their businesses with artificial intelligence. Banks are under pressure to drive efficiency, and many expect significant job cuts as the process takes hold, with an estimated 200,000 jobs potentially at risk over the next three to five years. Although many banks are looking to use AI to transform their operations, the CBA case is a cautionary tale for those who move too quickly with change.

The laid-off employees did not accept the explanation. Rather than a decrease in call volumes, they said staff were being told the opposite was happening at the time of their job losses. Some managers were reportedly being transferred to work on the phones while those who stayed behind were being offered overtime to keep up with demand.

Appealing to a fair work tribunal, the FSU said CBA had “misled” both staff and the public about the potential impact of the bank’s new chatbot technology. It also alleged that staff were not properly consulted about the decision to make the jobs redundant. “CBA failed to properly explain how it assessed the need for the roles or show why it was no longer needed,” it said in its submission to the tribunal.

The union also claimed that the bank may have been covering up a decision to offshore a portion of the roles to India, an accusation denied by CBA. The timing of its decision to hire staff there suggested a relationship between the redundancy announcement and the alleged offshoring, the union claimed.

During the tribunal, CBA made a critical concession. Bank executives admitted it had failed to consider the increase in calls in its assessment. In evidence to the tribunal, CBA had claimed a 2,000 fall in calls a week had necessitated the job cuts. But the figures did not account for a spike in call volume that was rising in the same time period, reaching a level that remained high for months after the redundancies. “This error meant the roles were not redundant,” the bank stated in the tribunal.

Apologising to staff and agreeing to give the 45 former workers the right to return to their previous positions, the bank walked back its original decision. A spokesperson told Bloomberg: “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required.”

The FSU hailed the development as a “massive win” for the workers involved. But the union says it would have preferred not to have to go to a tribunal in the first place, as the real damage to staff was already done. The suddenness of the change, it claims, has already left the workers reeling, with some living under the fear of not being able to pay their mortgages or bills. In a statement, it called the episode an example of the consequences of employers moving too quickly.

Despite this high-profile error, CBA’s transition to an AI-driven bank shows no signs of slowing down. Last week, it was also announced that the bank had formed a new partnership with OpenAI. The goal of the collaboration is to accelerate the development of advanced generative AI tools, which CBA said would be embedded in products and services to make the bank more efficient.

Goals of the partnership, which was first announced in October, include building AI that can boost scam detection and fraud prevention, as well as providing more personalized services to customers. CBA said that although the chatbot case would likely give staff cause for concern, the new tools are being rolled out as a means of investing in the bank’s employees. “We are partnering with OpenAI because our focus is on embedding the responsible use of AI to make CBA better for customers, more efficient, and a great place to work,” it stated.

The FSU has not yet concluded its battle with the bank. A separate case has been lodged with the Fair Work Commission (FWC) focusing on its broader use of AI, which the union says it will continue in parallel with its previous case. Although the result of that particular case remains to be seen, it is not the only part of the financial industry that has to be wary of pushback.

Resistance to rapid change and investment in AI from workers has also been seen in other sectors. When Meta Platforms CEO Mark Zuckerberg recently toured an organization making massive investments in AI, employees raised concerns over privacy as it started work in the new building.