Small business groups and major employer bodies are up in arms over a proposed NSW law that would give unions the power to access workplace digital systems, warning it could expose sensitive data, pile on compliance costs and create legal risks for everyday operators.

The Work Health and Safety Amendment (Digital Work Systems) Bill 2025 was introduced into NSW Parliament in November and could pass as early as this week. The NSW Government says the changes are needed to keep workers safe in an economy increasingly run by algorithms, apps and automation.

Business groups aren’t buying it.

Critics say the Bill goes far beyond safety and opens the door to unions accessing payroll systems, emails, customer databases and even pricing tools, often without a court order.

The Work, Health and Safety Amendment in plain English

The Bill updates NSW work health and safety laws to explicitly cover ‘digital work systems’. That includes algorithms, artificial intelligence, automation and online platforms that allocate work, monitor performance or make decisions about workers.

Under the proposed laws, businesses would have a duty to make sure digital systems don’t create:

• excessive or unreasonable workloads
• excessive monitoring or surveillance
• unfair or discriminatory outcomes

Union officials with WHS entry permits would also be able to request “reasonable assistance” to access and inspect digital systems they believe are linked to a suspected safety breach.

Refuse and you could end up in court.

‘A Trojan horse’, says COSBOA

The Council of Small Business Organisations Australia (COSBOA) has been one of the loudest critics, describing the Bill as a ‘Trojan horse’ that dramatically expands union access to business systems under the banner of safety.

COSBOA chair Matthew Addison says small business owners are being asked to hand over access to systems that contain far more than safety information.

“Small businesses have legitimate commercial-in-confidence concerns about union officials accessing their operational systems,” he 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.”

COSBOA also argues the legislation shows a poor understanding of how small businesses actually 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,” Addison said.

Undefined rules, real penalties

One of the biggest concerns for business owners is that key terms in the Bill, including ‘excessive’, ‘unreasonable’, and ‘discriminatory’, are not defined.

That leaves small businesses exposed to penalties 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,” Addison said. “That is backwards and fundamentally unfair.”

Penalties for failing to provide access can reach 121 penalty units for individuals and 607 for companies — currently more than $66,000.

‘This doesn’t fix a gap in the law’

COSBOA and other industry bodies argue existing WHS laws already cover risks created by technology, including unsafe workloads, rostering and surveillance.

“The NSW Government has not explained what gap this Bill fills or why existing laws are inadequate,” Addison said.

“This appears to be a solution in search of a problem, drafted in response to political pressure rather than demonstrated workplace safety failures.”

They’re also unhappy the Bill was introduced without a regulatory impact statement, cost-benefit analysis or formal consultation with small business.

United pushback from business groups

COSBOA isn’t alone. A rare joint statement from 10 major industry groups, including the Business Council of Australia, Australian Chamber of Commerce and Industry, Tech Council of Australia, and Master Builders Australia, warns that the Bill puts sensitive data, investment, and jobs at risk.

“The Bill would give union officials access to a wide range of workplace digital systems, including internal emails, personal information, HR and payroll systems, rostering tools, customer databases, financial records and operational platforms,” the statement said.

The groups argue privacy protections and cyber security safeguards are inadequate, particularly for workplaces handling large volumes of personal and financial data.

“Consumers and workers expect their private health and financial information to be protected. This Bill does not provide that assurance,” the statement said.

Why the government and unions support it

The NSW Government says the Bill is about ensuring human safety keeps pace with digital decision-making, particularly in the gig economy and algorithm-driven workplaces.

Premier Chris Minns has rejected claims the laws amount to spying powers, saying they allow unions to ask legitimate questions about how work is allocated.

“We work for bosses and we work for people, we don’t work for computers or algorithms,” Minns said on 2GB radio earlier this week. “You should be able to ask, ‘how did this happen?’”

He gave the example of a gig economy app directing a driver to make an illegal U-turn or stop in a no-parking zone.

Unions argue that without access to digital systems, it’s impossible to properly investigate safety breaches that are baked into software rather than caused by human managers.

A looming political flashpoint

With Labor support and backing from several crossbench MPs, the Bill could pass the upper house despite fierce opposition from business groups and the NSW Opposition.

Critics warn NSW risks becoming an outlier, especially while national guidance on digital work systems is still being developed by Safe Work Australia.

“Small businesses operating across multiple states are struggling to keep up with conflicting requirements,” Addison said. “NSW’s go-it-alone approach makes a complex environment even harder.”

Business groups are urging the government to consult further with business groups before passing the amendment or at the very least exempt small businesses with fewer than 50 employees…

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