For small and medium-sized businesses (SMBs), AI tools have become a bit of a secret weapon. Suddenly, drafting a job description, policy, or performance review template can take minutes instead of hours. That’s a huge time-saver for busy founders, managers, and admin teams who wear multiple hats.
But here’s the reality: while AI can write words, it doesn’t understand workplace laws. It can’t interpret the Fair Work Act, your Modern Award, or your unique employment obligations. And that’s where things can quickly come unstuck.
Used wisely, AI is a great assistant. Used blindly, it can create costly compliance gaps. Let’s look at the big five areas where AI can genuinely help, and why it’s still crucial to have a qualified HR professional review, tailor, and sign off on anything that affects your people or your obligations as an employer.
1. Employment Contracts
AI can easily produce a professional-sounding employment contract template, but this can create a false sense of security. A contract generated by AI might look impressive, but it won’t necessarily comply with Australian employment law or reflect your industry’s Modern Award.
AI can help you:
Draft a structure and include common sections such as duties, confidentiality, and notice periods.
But you still need expertise (from an IR lawyer or HR to:
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Ensure clauses align with Fair Work and the correct Award.
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Clarify overtime, penalty rates, and leave entitlements.
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Protect your business in case of disputes or terminations.
Bottom line: It’s great to have the words, but you need to understand what they mean and how they apply. A contract isn’t just a formality.
2. Job Descriptions
AI is fantastic at writing clear, concise job descriptions. You can type:
“Write a job description for a marketing coordinator in a small biotech business”
and get a decent first draft in seconds.
But what it won’t do is understand your team structure, culture, or performance expectations. If you copy-and-paste an AI-generated description straight into your hiring ad, you might end up with misaligned expectations.
AI can help you:
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Get a head start on structure and formatting.
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Draft key responsibilities and qualification lists.
You still need HR expertise to:
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Tailor the role to your actual business needs.
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Define measurable outcomes and success indicators.
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Ensure job duties don’t drift into a different classification or pay grade under your Award.
3. Policies and Procedures
It’s easy to ask AI for “a simple leave policy” or “a code of conduct for small business.” You’ll get something polished, but not necessarily compliant. Policies need to match your workplace, your industry, and the relevant legislation.
AI can help you:
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Outline structure and tone.
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Provide examples of best-practice inclusions.
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Create readable, plain-English drafts.
HR expertise ensures:
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Your policy reflects current Fair Work legislation.
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The right definitions, notice periods, and entitlements are included.
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The language protects you if a policy is later challenged.
4. Performance Management
Performance conversations are tricky at the best of times. AI can help you prepare, suggesting ways to phrase feedback, document performance issues, or write improvement plans.
AI can help you:
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Draft a script or performance review template.
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Suggest neutral, professional language.
You still need HR input to:
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Ensure the process is procedurally fair.
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Keep records that meet Fair Work standards.
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Avoid discriminatory or subjective language that could escalate to a claim.
5. Termination and Redundancy Letters
AI can generate a professional-sounding termination letter in seconds, but it can’t know if you’ve met the legal process. Was the employee given notice? Were there valid reasons? Were they offered a support person? Has redundancy consultation been done properly?
AI can:
Draft wording for letters, meeting scripts, or checklists.
HR expertise ensures:
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The termination process is lawful.
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You’ve followed the correct notice, consultation, and payment requirements.
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Communication is handled with care and professionalism.
The Power Combo: AI + HR
Think of AI as your assistant, not your advisor. It’s brilliant for saving time, generating ideas, and getting a head start, but it’s not a compliance expert. The real power comes from using AI to handle the first draft, then letting a qualified HR professional review and tailor it to your business.
That way, you get:
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Speed + accuracy
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Clarity + compliance
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Innovation + protection
At HR On Call, we often tell clients: “AI can give you the words, but HR ensures they work.” If you’re unsure whether your policies, contracts, or letters are legally sound, now’s the perfect time to have them reviewed.
