From spreadsheets to scheduling software, NSW’s proposed law captures everyday business tools under safety regulations, says COSBOA Chair Matthew Addison.
What’s happening: NSW Parliament is considering legislation that would impose specific work health and safety obligations on businesses using digital work systems, with the bill defining these systems broadly as algorithms, artificial intelligence, automation, online platforms or software.
Why this matters: Over half of surveyed businesses reported that compliance had become harder over the past year, and this legislation arrives without regulatory impact statements, cost analysis, or consultation with the small business sector it will affect most.
The NSW Government introduced the Work Health and Safety Amendment (Digital Work Systems) Bill 2025 to Parliament on 20 November 2025, triggering immediate warnings from small business advocates about impossible compliance obligations and commercial privacy concerns.
Matthew Addison, Chair of COSBOA, described the legislation as a “trojan horse” that grants union officials with WHS entry permits unprecedented access to business digital systems, including platforms containing payroll data, customer lists, pricing algorithms, and operational strategies, with penalties for businesses that fail to provide reasonable assistance.
“Small businesses have legitimate commercial-in-confidence concerns about union officials accessing their operational systems,” Mr Addison said. “There are inadequate safeguards preventing these powers being used for industrial rather than safety purposes. A union official does not need access to an entire customer database to investigate a safety issue.”
The legislation’s scope extends far beyond specialised platforms. The bill defines digital work systems broadly as algorithms, artificial intelligence, automation, online platforms or software, which could apply to many businesses, not just those using apps to allocate jobs to workers.
Mr Addison said the legislation fundamentally misunderstands how small businesses use technology. “The Bill makes small business owners liable for work allocation, and anything from a standard spreadsheet to a basic off-the-shelf system is caught up in this overreach.”
Compliance obligations within the bill remain unclear, as it requires businesses to ensure digital systems don’t create excessive, unreasonable or discriminatory outcomes, yet none of these terms are defined. Small businesses face significant liability without a clear understanding of what compliance actually looks like.
“The NSW Government is creating penalties first and promising to define them later through regulator guidelines,” Mr Addison said. “That is backwards and fundamentally unfair.”
NSW Minister for Industrial Relations Sophie Cotsis said the bill aims to ensure digital workplace systems help businesses and do not undermine worker health and safety, describing systems that track and push workers beyond safe limits as exploitation rather than innovation.
However, the Business Council of Australia raised serious concerns about the legislation’s scope. BCA chief executive Bran Black warned that the new laws hand unions unprecedented access to any business or worker’s computer systems.
COSBOA also warned that the legislation is being rushed through NSW Parliament before Safe Work Australia finalises national guidance on digital work systems, creating yet another instance of NSW breaking ranks on national workplace regulation.
“Small businesses operating across multiple states are struggling to keep up with conflicting requirements,” Mr Addison said. “NSW’s approach on workplace laws makes a complex environment even harder and it has to stop.”
The Australian Industry Group echoed concerns about NSW’s divergent regulatory approach, with Helen Waldron stating the proposed changes are entirely unnecessary and the unclear obligations they would impose on industry will undoubtedly be a catalyst for workplace disputation.
Mr Addison emphasised that current WHS legislation already requires businesses to manage all workplace risks, including those from digital systems. “The NSW Government has not explained what gap this Bill fills or why existing laws are inadequate,” he said. “This appears to be a solution in search of a problem, drafted in response to political pressure rather than demonstrated workplace safety failures.”
The timing of the legislation has drawn particular criticism. The federal government is convening a roundtable discussion over matters that will include whether there is a need to regulate employers’ implementation of artificial intelligence at a national level, yet NSW is proceeding independently.
COSBOA highlighted the bill was introduced without any regulatory impact statement, cost analysis, or formal consultation with the small business sector. Small business compliance burdens have intensified, with businesses under significant pressure from rising costs and compliance burdens.
“The NSW Government talks about cutting red tape, yet this Bill will force thousands of small businesses to seek costly legal or technical advice just to understand their obligations,” Mr Addison said.
COSBOA is urging the NSW Government to exempt small businesses with fewer than 50 full time employees and to undertake meaningful consultation before progressing the bill.
“Small businesses support safe workplaces, but they need laws they can understand, implement and comply with,” Mr Addison concluded. “This Bill must be withdrawn and redrafted following genuine consultation with the business community it will impact.”
The legislation remains before Parliament, with industry groups continuing to advocate for proportionate approaches that recognise small business operational constraints and limited resources compared to large corporations.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
