With many of the world’s biggest banks set to automate hundreds of thousands of jobs, Australia’s biggest lender has been forced into an embarrassing climbdown after dismissing and then being forced to rehire 45 workers. The Commonwealth Bank of Australia (CBA) had to admit that it had not been clear in its explanations after announcing that the jobs in question had been made redundant by artificial intelligence. The banks had to backtrack on the decision to fire 45 workers, following a case brought by the Finance Sector Union (FSU), which also accused the bank of misleading the public over its chatbot claims.

Forty-five staff received the news that their positions at the bank were being made redundant, following the launch of the Commonwealth Bank’s voice assistant. However, according to the FSU, the 45 employees, many of whom had decades of service at the bank, were fired under pretenses. In an initial statement to the staff, the bank had pointed to a reduction in call volume of around 2,000 calls per week following the launch of its new AI assistant, the “voice bot”. The bank said this had reduced the need for human support to handle the calls, and as a result, the decision had been made to make a group of roles redundant.

The call drop allegedly followed the AI assistant rollout in February, but according to the FSU and the workers themselves, it wasn’t a drop, but rather an increase in call volumes that led to the layoffs. The union says, rather than a decrease in calls, staff were telling them the exact opposite and, in fact, that volumes were soaring at the time that the decision to make the roles redundant was taken. According to some of the workers, management was even poaching customer service managers to make up the shortfall and paying staff to work overtime.

Disagreeing with the bank’s decision, some of the workers took the matter to the Fair Work Commission (FWC) and their union, the Finance Sector Union. The finance union, FSU, said the Commonwealth Bank had not made it clear how the positions had been determined as redundant, adding that there were also reasons to believe that the AI announcement was a smokescreen to outsource jobs offshore to India, as recruitment to the same roles in the country was taking place at the same time.

As part of its case, the FSU said CBA failed to meet its legal requirements to notify and consult the affected workers, with full-time equivalent headcount in the business intelligence team having increased from 48 to 59 since 2021, with no departures or resignations in the time between. It is also claimed that CBA used the initial “bot” claim to justify the decision and failed to provide any other explanation or respond to requests for information and other discussions.

The Commonwealth Bank also stated in documents submitted to a federal work tribunal hearing the case that an increase in the call volumes had “directly coincided with the affected employees becoming redundant”. This was not flagged at the time of the dismissals, even though the effect had been sustained for at least six months, but which “the bank had not previously taken into account.” “This error meant the roles were not redundant,” the bank told the tribunal.

Following the tribunals, the bank stated it has decided to review its decision. It has since apologized to the affected staff for the error and has now offered to allow the workers the option to return to their old role, a new role with the bank, or take an ex gratia exit payment. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required,” a spokesperson said.

The FSU, however, has called it a win for the affected staff and described the announcement as “a massive win” for the staff concerned. However, the union pointed out that some of the workers had been in limbo for weeks over the jobs, and some were just beginning to receive their redundancy packages when CBA was forced to backtrack.

The CBA is not the first bank to run into trouble over its promises to automate. Banks and financial institutions have a long history of attempting to introduce workplace automation, but some of the more recent promises have focused on using artificial intelligence to boost efficiency and reduce labor costs. In Europe, for example, banks are being urged to back away from automation that has been promised in certain sectors, following a report by regulators and consumer groups, warning that many firms have made exaggerated promises about automation.

The move away from automation has also been resisted in Australia, as the CBA’s relationship with AI has since deepened even as it walked back on the layoff claims. Last week, it announced a deal with OpenAI. The two will now work together to develop a series of generative AI applications to improve fraud detection, develop additional anti-fraud tools, and give a more tailored service to customers. CBA maintains that this new AI initiative is designed to work alongside existing staff, but it is currently not clear how this will play out in light of the latest tribunal.