Commonwealth Bank of Australia is reinstating 45 workers after they were made redundant due to the rollout of artificial intelligence, and then challenged the move in a tribunal. The case centers on a group of employees who found their jobs eliminated overnight due to the bank’s decision to roll out a new AI-powered “voice bot” to take over their work.

The role of the workers in question was to handle incoming customer calls. CBA’s move to automate the role was an early foray into generative AI for the bank and rolled out during 2023. According to the company, the technology has reduced incoming calls by around 2,000 per week, meaning the same work could be handled with a smaller workforce. The bank has made it clear it will continue to press ahead with generative AI, but the forced reversal on the job cuts could put a strain on employee relations.

The controversy began last month when dozens of bank employees were told their positions had been made redundant. The news was an especially bitter pill for some employees. Several of the staff members who were fired had worked for the company for decades, and the news was accompanied by confusion.

The problem was that the case was not backed up by the call statistics at the time the layoffs were made. While the bank had said it had reduced incoming calls by 2,000 per week, staff members refuted this. On the contrary, they said that calls had actually been increasing at the time, and management had only just then been struggling to meet demand. To make up for the shortfall, managers had reportedly been temporarily reassigned to take calls, and the remaining employees were being asked to work overtime.

The employees challenged the redundancy decision with a fair work tribunal. The FSU claimed that CBA did not explain adequately the basis for the redundancies and alleged the redundancy process had been used to disguise an attempt to move work offshore, as the bank has been hiring people in India to do similar jobs. “Members were caught off guard by the bot announcement and the subsequent sacking of people,” FSU National Secretary Julia Angrick told Bloomberg. “It had all the hallmarks of the bot announcement being a convenient cover story for offshoring.”

At a fair work tribunal, the bank’s argument unraveled. CBA conceded that the firm “hadn’t appreciated a sustained increase in call volume” at the time the redundancies were made. “The tribunal found that because of the increase in call volume, the roles were not redundant,” the company said in a statement. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required.”

In an interview with Bloomberg, a spokesperson for the bank conceded there had been “misunderstandings” and said it accepted the tribunal’s decision. The employees in question have been given three choices: accept an offer to return to their previous position, apply for other roles in the bank, or take a redundancy package.

The FSU, which helped challenge the redundancy decision, celebrated the news as a “massive win for our members.” But the union’s national secretary, Julia Angric,k also warned that many of the employees had already suffered as a result of the cuts and that many had spent weeks in uncertainty. The union said the layoffs had left them “terrified about how they were going to pay their bills.” The union took aim at the bank’s decision-making and its lack of urgency in the consultation process. “CBA brought this upon itself by rushing into these changes without having a full grasp of what they entailed for our members and with a lack of genuine consultation,” Angrick said.

It is against the backdrop of growing cost pressures and rising customer dissatisfaction that CBA is making its AI push. This week, the bank announced a deal to work with OpenAI on new AI applications to combat scams and boost fraud detection. It said these “advanced generative AI models” could lead to “new fraud prevention capabilities” to better detect suspicious activity and save money for customers. But the union said this development comes too soon after the layoffs, and many members feel burned by the rapid changes. The bot that was the catalyst for the termination of employees has been trained by OpenAI.

CBA’s development is part of a wider trend. In 2023, there were more than 700 tech startups in Australia focusing on the applications of AI and data. But in the world of finance, the technology is being seen as the route to job cuts. Data from Bloomberg Intelligence suggests that banks globally could lay off between 150,000 and 200,000 jobs over the next three to five years as AI applications take over back office, middle, and operations roles. In many ways, the job cuts and the reversal of those cuts represent the canary in a coal mine for the broader AI rollout.

In a statement, CBA said that the deal with OpenAI “isn’t about replacing people, it’s about investing in our people.” “It will also embed our responsible use of AI principles,” the bank spokesperson said, without addressing why these principles have led to job cuts. But the rehiring of the 45 workers in Australia has given unions more ammunition in what is likely to be a long-term pushback against automation. CBA was careful to say the 45 people were being rehired as part of a company-wide reassessment, but the FSU has confirmed it is in the process of bringing a new case over the bank’s wider use of AI.