After promising to drastically reduce staffing numbers through automation, one of Australia’s biggest banks is being forced to reverse course after an embarrassing dispute with staff. The Commonwealth Bank of Australia (CBA) will have to reinstate 45 roles following a fight with a workers’ union, after it claimed that the jobs had been rendered obsolete by the bank’s artificial intelligence.

Reports of the layoffs first surfaced in early April, when dozens of workers at the bank were informed that their roles were no longer needed. CBA claimed that its new “voice bot” AI assistant had led to a 2,000 weekly drop in calls, meaning fewer people were needed to man the phones. Some of the impacted staff members had worked at the bank for 20, 30, or even 40 years.

The explanation didn’t quite line up with the reality, however, and the affected workers quickly spoke out. The Australian finance workers’ union, Finance Sector Union (FSU), stated that call volumes weren’t declining, and that, in fact, they were going up at the time that the layoffs took place. In fact, they say that the opposite was true, and CBA staff were having to work harder than ever.

Specifically, the union alleged that bank staff were at the time being redeployed from their original roles to handle calls. Managers were reportedly being moved into contact center jobs, and other staff were being encouraged to work overtime to help meet demand. “Call volume data for when the alleged redundancies were made shows the unit was in fact under pressure,” the FSU stated.

Armed with evidence from affected workers, the FSU took CBA to a fair work tribunal. The bank was found to have given no satisfactory explanation as to how the roles were assessed to be redundant, and as such, must now reverse its decision and reinstate them. It also revealed during the tribunal process that it had neglected to factor in a months-long spike in call volumes when it made the redundancies.

This error was enough to convince the bank to acquiesce to the workers’ union. “It turns out that in February 2023, the bank substantially increased call centre staffing by recruiting call centre staff in India,” FSU National Secretary Julia Angrisano told the ABC. “We believe, and will argue, that the bank has been using the so-called ‘chatbot’ as a disguise for outsourcing.”

In a statement to the ABC, CBA acknowledged its mistake and the resultant impact on workers. “Following a recent Fair Work Commission hearing, we have agreed we should not have made a number of our contact center employees redundant,” the bank said. “This error meant the roles were not redundant, and we have now withdrawn our application.”

The bank then announced that it would allow the affected staff to either return to their previous roles or be redeployed to other positions in the company, or be paid out through redundancy packages. In the same statement, it apologized for the way the matter had unfolded. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required,” the bank said in a statement to Bloomberg.

The FSU has called the development a “massive win for the members we represent”, but warned that workers are still being damaged in the short-term as a result of CBA’s actions. Many of the employees had to face several weeks of uncertainty over their employment, with some suddenly finding themselves out of work and unable to pay bills.

“We see this result as a strong warning to all employers about engaging in rushed and sloppy AI automation and the potential damage it can cause to people’s livelihoods,” the FSU added. For its part, CBA is showing no signs of slowing its foray into AI, announcing just last week a new partnership with OpenAI that will seek to develop advanced generative AI tools.

Areas of focus include scam detection, fraud prevention, and enhancing personalized customer service, but workers are likely to take this with a pinch of salt after their roles were deemed “redundant” last month. CBA has since sought to assure its staff that the OpenAI partnership is intended to work for the benefit of employees, customers, and the wider community.

It is also in the bank’s interest to appear as a more welcoming AI testing ground, given that its entire sector is facing massive transformation as a result. Bloomberg Intelligence estimates that 200,000 financial service jobs could be automated over the next three to five years, largely as a result of artificial intelligence adoption in back and middle office roles. The CBA case will be seen as a warning by many about the reputational and trust damage that can occur when that change is not managed responsibly.