AI in the workplace: consultation, safety and privacy obligations

Many AI tools enter the workplace as features of existing systems, such as rostering software, performance dashboards and recruitment platforms, rather than as stand-alone projects. As a result, employers can fail to recognise when their introduction amounts to a change that requires consultation.

The obligation to consult already exists. Modern awards require consultation on major workplace change, and every enterprise agreement must include a consultation term. Many union-negotiated agreements go further and require consultation before a decision to introduce new technology is made. In February 2026 the ACTU wrote to employer peak bodies on this issue and indicated that employers who do not consult would face a coordinated response.

In New South Wales, the Work Health and Safety Amendment (Digital Work Systems) Act 2026, makes explicit that health and safety duties extend to AI, algorithms and automated systems. Provisions allowing SafeWork NSW to develop and issue digital work systems guidelines have commenced. The remaining amendments, including the new work-allocation duty and the power to require reasonable assistance to access and inspect relevant systems, await commencement dates. The assistance power cannot start earlier than one month after the guidelines are published. Existing WHS duties and relevant inspection rights continue to apply.

Privacy obligations are also changing. From 10 December 2026, organisations covered by the Privacy Act 1988 (Cth) must disclose in their privacy policy the kinds of personal information used by computer programs, and the kinds of decisions made solely by, or significantly influenced by, those programs, where the decision could reasonably be expected to significantly affect an individual's rights or interests. Recruitment screening is the most obvious example for employers.

We recommend that employers take the following steps now:

Identify every system that allocates work, monitors performance or screens candidates.
For each system, establish when it was introduced, who approved it and whether consultation occurred.
For future systems, consult when the decision to introduce the system is made, before implementation.
Document the controls, including who can override the system, which decisions it cannot make without human review, and how workers can raise concerns about its decisions.

Government monitoring found no evidence of broad AI-driven disruption to the Australian labour market as at July 2026, although employment in occupations with higher AI exposure has grown more slowly. These early labour-market findings do not remove existing consultation, safety and privacy obligations.