The NSW Government has introduced the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 (Bill) to the Legislative Assembly. The bulk of the Bill includes re-introduced reforms to how Workers’ Compensation is applied in relation to psychological injuries (with some variations), following referral of a previous bill to a Parliamentary Committee in June this year.
Notably, the Bill also includes new reforms to the Work Health and Safety Act 2011 (NSW) (WHS Act), introducing a new WHS duty on Persons Conducting a Business or Undertaking (PCBUs) that use digital systems for the allocation of work (Digital Work System Duty). The Bill defines Digital Work Systems broadly as “an algorithm, artificial intelligence, automation, online platform or software”.
The proposed Digital Work System Duty requires PCBUs that use a Digital Work System to ensure, so far as is reasonably practicable, that the allocation of work by or using the digital work system is without risks to the health and safety of any person.
The reform also requires PCBUs to consider whether the allocation of work by or using a digital work system creates or results in any of the following risks:
- Excessive or unreasonable workloads for workers at work in the business or undertaking.
- The use of excessive or unreasonable metrics to assess and track the performance of workers at work in the business or undertaking.
- Excessive or unreasonable monitoring or surveillance of workers at work in the business or undertaking.
- Discriminatory practices or decision-making in the conduct of the business or undertaking.
The reforms have arisen because of recent reports of abuse of artificial intelligence in the gig economy, with companies using the technology to excessively or preferentially allocate work to those who work longer shifts. Arguably, this type of behaviour is already prohibited by the primary duty of care because it would expose workers to risks to their health and safety.
The Bill also proposes to provide WHS entry permit holders (such as union officials) with the power to require a PCBU to provide them with reasonable assistance to access and inspect a digital work system relevant to a suspected contravention of the WHS Act.
Analysis of potential impacts
Scope of the Digital Work System Duty
The concept of the WHS Act regulating the allocation of work by digital work systems was considered in the Legislative Council’s Select Committee on the Impact of Technological and Other Change on the Future of Work and Workers in New South Wales Final Report found that:
“[The] committee considers that work health and safety laws should reflect the uptake of automated processes in workplaces, particularly where those technologies are being used to allocate work. We recommend that government consider amending work health and safety laws to regulate the allocation of work via software/platforms/code/algorithms/apps to ensure worker safety, appropriate workloads, compliance with industrial instruments, non-discriminatory practices, and a fair and equitable distribution of work”1
While the above may provide some clarity to the scope of the Digital Work System Duty, we note that neither the second reading speech nor the explanatory memorandum provides substantial guidance on the scope of the duty.
Overseas, companies have faced scrutiny by regulators for excessive surveillance of their workers. In late 2023, Amazon was fined €32,000,000 in France for “excessive” surveillance of its workers. In this matter, breaches of the European Union’s General Data Protection Regulation were found, including a system that monitored employee activity and generated alerts relating to the speed of workers completing tasks, along with break times.2 Based on the commentary of the Select Committee on the Impact of Technological and Other Change on the Future of Work and Workers, it is likely that the Digital Work System Duty would, at the least, apply to systems such as the one that was the subject of this fine.
Interaction with recent reforms
The introduction of the Digital Work System Duty, given its wide scope, has the potential to create significant industrial disputes when combined with the recently passed, but yet to commence, dispute resolution reforms previously passed (read more in our recent article).
Of note, disputes over the use of digital work systems could be taken by concerned parties (such as a health and safety representative, work group or union) to the NSW Industrial Relations Commission (IRC) for arbitration, with the IRC being empowered under the new dispute resolution powers to make binding orders. These orders could include requiring controls to be put in place by the PCBU in relation to the digital work system. Further, the IRC in arbitrating a dispute could make a finding that a PCBU should have done something in relation to the Digital Work System Duty, but failed to do so. Such a finding could give rise to a prosecution.
Moving forward
These reforms mark a continued focus by legislators on the implications of new technologies (such as artificial intelligence) being applied in workplaces. We will continue to monitor developments in the NSW Parliament closely as these reforms are debated.
Hamilton Locke’s Workplace and Safety team can assist your company in understanding and upholding its duties under health and safety laws. If you require assistance or you’re interested in learning more, please contact Michael Tooma.
1Legislative Council of New South Wales, Select Committee on the Impact of Technological and Other Change on the Future of Work and Workers in New South Wales, Final Report (Report 2), p 44.
