Banks are set to automate a large part of their workforce in the coming years, and Australia’s biggest bank has been forced into an embarrassing climbdown after 45 workers were wrongly told their roles had become redundant through artificial intelligence. The Commonwealth Bank of Australia (CBA) has been told to rehire staff after they challenged the redundancies with a Fair Work Tribunal.

The tribunal case heard that the bank had informed staff members that their roles had become redundant and could be cut, partly because the AI-powered voice bot was handling so many calls. CBA told employees that, as call volumes had dropped by around 2,000 calls per week, its old technology could not be fully deployed, making as many as 45 employees redundant. The bank said at the time the chatbot had taken a heavy workload off staff, while some of the staff affected, were told their role had become redundant had been working at CBA for more than 30 years.

Finance Sector Union (FSU), which represented staff, quickly came out against the bank’s position on redundancies, saying that the chatbot explanation was not supported by reality and calling the bank’s management into question. Instead of a drop in call volumes, which was offered up by the bank as the main cause, staff claim call volumes were actually going up when the decision was made. In fact, some managers were reportedly moved from their positions to take calls, while existing staff were offered overtime to meet customer demand.

Pressure began to mount on the bank when the FSU took the case to a fair work tribunal, which heard that CBA may not have been completely upfront in its explanation of why jobs became redundant. The union said that the call center redundancies may be related to the bank’s efforts to relocate some staff to India at the same time. This could amount to a decision to offshore some of the roles being hidden behind a conversation about a chatbot, while the actual reason for the redundancies had been hidden. Union members quickly raised concern that the chatbot announcement was a smokescreen for the relocation of the offshore call center.

The fair work tribunal also heard several admissions from bank staff, including the fact that it had miscalculated call volumes. The CBA admitted that the extra call volume had been sustained and that it had not factored this into its decision-making process. “This error meant the roles were not redundant,” the bank admitted. The admission was a significant turnaround for the bank, which had at the time of the layoffs stated that the bank told some affected employees “their position was no longer required, as the bot had removed the need for an equivalent number of staff” and that it was focusing more on new technology.

In a swift about-face, CBA apologized to workers and said it had “agreed to reinstate the affected employees with an offer to return to their previous role or apply for other available positions” with the bank, in what it is now describing as a mistake. A spokesperson also said that “we have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required.”

While the FSU said it was a “massive win” for members, it was also concerned that the damage was already done in some respects. Some workers affected by the cuts had been left in limbo for weeks, struggling to know if they would be able to afford their mortgage or not. While CBA insisted the decision to reinstate the roles was about being more careful in how staff were treated and “responsible use of AI”, there was considerable unease among existing workers. The bank may have been motivated to cut so much, some asked, if its own technology was malfunctioning and leading to unnecessary job losses.

To be sure, CBA has shown no indication that it will back down from its own embrace of AI, with new partnerships with companies like OpenAI continuing. Announced just last week, the new deal will see CBA work with OpenAI to “build generative AI tools to strengthen capabilities such as scam detection, enhanced fraud prevention, personalized services, and other key areas.” CBA has put a reassuring gloss on the decision, saying that while it’s working with OpenAI to develop “scalable use of the technology,” and that it is all about “investing in our people, and how we work.” However, some employees have told the Financial Times they feel like AI has simply replaced the chatbot fiasco with a “horrifying level of mistrust”.