Australia’s biggest bank has been forced to apologize and rehire dozens of employees after backtracking on a controversial decision to make them redundant in the name of automation. The Commonwealth Bank of Australia (CBA) said 45 staff would keep their jobs after the Finance Sector Union (FSU) challenged the bank in a tribunal, claiming workers had been misled and the chatbot technology could not be held responsible for the job cuts.

The fight erupted after CBA notified staff that their positions would no longer be required as a result of its “voice bot” customer service technology. The bank told the tribunal that after its AI-driven chatbot went live, inbound call numbers had declined by some 2,000 a week. As a result, fewer staff members were needed and a number of employees who had served the bank for as many as 35 years were shown the door.

However, the employees soon disputed this line of reasoning. Instead of experiencing a reduction in call numbers, the staff who brought the case forward have claimed that call volumes were increasing at the time of the layoffs, not decreasing. Staff have even alleged that their management was struggling to handle the workload at the time, assigning other managers to take calls and offering overtime to try to keep pace with demand.

In response, the union went to a fair work tribunal. The union put forward a number of contentions about the process. It claimed that CBA had not been clear or thorough about the exact reason why those roles were made redundant. It also alleged that it “may be the case that CBA was using the supposed redundancy of these roles because of the chatbot as a reason for moving some of these positions offshore, to India.”

Evidence put forward by the bank in the tribunal revealed that the company had initially based its decision to make the workers redundant on the assumption that calls to the contact center had decreased. However, in May last year, the number of calls suddenly and significantly increased and continued to do so for some months. The union argued that this spike directly contradicted the bank’s justification for the layoffs. “This error meant the roles were not redundant,” the bank admitted in the tribunal.

Consequently, the bank has had to swallow its pride and issue an apology to the workers it said were no longer needed. The 45 staff have now been offered the opportunity to return to their previous positions or to apply for other roles at the bank ,or take an ex gratia payment instead. “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 union has called the decision a “massive win for staff members” who were the target of these redundancies. It also warned that this should not be taken to mean that AI-based layoffs will not continue to happen. However, the damage, the union continued, is already done to the 45 staff members and many other workers, as they were “forced to suffer through weeks of uncertainty.”

In particular, the union was concerned about the fact that the decision to lay them off would happen in the first place. “How can workers be confident when their boss has made them redundant one day and offers them their job back the next?” they said, adding, “This is why there needs to be greater worker consultation before these automation decisions are made.”

For its part, CBA has not indicated that the reversal will halt its push to advance in the artificial intelligence (AI) race. Last week, it announced a partnership with OpenAI, a U.S.-based AI lab. The partnership, which CBA has previously said it will help it build more advanced generative AI tools to detect scams, strengthen its fraud prevention, and help it provide a more personalized service.

While CBA has said the announcement of the partnership was about taking a responsible approach to AI and supporting its staff, the developments will come as little reassurance to those who have already been affected by this particular bot-related blunder.

Australia’s bank was still caught up in an act of automation that was short-sighted and had serious ramifications for its staff. It was far from an isolated case. Financial institutions all over the world are under pressure to turn to automation and AI to streamline costs, processes, and workflows, including chatbot technology.

Analysts at Bloomberg Intelligence, for example, have forecast that banks could shed 200,000 jobs over the next three to five years as automation and AI take a greater share of back office, middle office, and operations roles. The case of CBA has added fuel to the argument that financial institutions must be more careful with their AI rollouts if they want to maintain the trust of both their customers and their workforce.