I INTRODUCTION

On 12 February 2026, the NSW Parliament passed the Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5[1] (the Act), becoming the first Australian jurisdiction to legally express work health and safety duties upon a person conducting a business or undertaking (PCBUs) in respect of digital work systems. The Act amends the Work Health and Safety Act 2011 (NSW) (the WHS Act), where  PCBUs already owed a general duty to reasonably ensure the health and safety of workers.[2] What the Act adds is more specificity; it places certainty that algorithms, artificial intelligence, automation, and online platforms used to allocate work are conducted in a way that minimises risk of unsafety.

The Minister confirmed in the Second Reading Speech that the Act was designed to ensure that when “an algorithm decides your hours, your pay, or your pace of work, there are clear rules and real human oversight to prevent harm”.[3]This commentary assesses the Act's provisions, identifies its benefits and limitations, and proposes targeted reforms.

II THE NEW LEGISLATION

“Digital work system” is defined broadly as “an algorithm, artificial intelligence, automation or online platform”.[4] The new section 21A imposes a duty on each PCBU to ensure, so far as is reasonably practicable, that the health and safety of a worker is not put at risk from the allocation of work by or using such a system.[5] In following that duty, the PCBU must consider whether the system creates or results in: (a) excessive or unreasonable workloads; (b) excessive or unreasonable performance metrics; (c) excessive or unreasonable monitoring or surveillance; or (d) unlawful discriminatory decision-making.[6] These four categories track key indicators of harm and translate that into a structured risk assessment obligation.

III BENEFITS

The Act's key benefit is legislative clarity. The general PCBU duty was often capable of extending to digital systems of work as a “system of work” within section 19, but that application was uncertain. The Act removes that uncertainty, placing PCBUs on express notice and providing SafeWork NSW with a clear statutory basis for enforcement.

Just as important is the Act's explicit recognition of different types of risks as a WHS hazard from algorithms. By listing surveillance, workload intensity, and discriminatory algorithmic decision-making as specific risk categories, the Act provides a foundation for enforcement action that the initial WHS Act alone could not do.

The Act is also drafted in quite neutral terms. The NSW reforms apply to all PCBUs across all industries, reflecting the reality that AI-driven scheduling and performance management now can expand across healthcare, logistics, retail, and professional services. Not just in one business sector.

Finally, section 276E requires the Minister to review the digital work system duty, such as 12 months after the commencement of the section with a subsequent report 18 months after this commencement.[7] This means that the Act will continue to stay relevant for the short-term and will adapt quickly if any long-term issues are presented in their annual finding.

IV LIMITATIONS

The Act's principal weakness is the range of its definitions. By assuming every “algorithm, artificial intelligence, automation or online platform” without any threshold, the duty potentially extends to routine administrative software. This could extend to systems such as basic rostering spreadsheets or email workflow tools, that are not meaningfully capable of producing the WHS harms. The Act provides no criteria by which a PCBU might distinguish a sophisticated AI system from a conventional scheduling application.[8] Until SafeWork NSW issues guidelines, this uncertainty will be ongoing.

A second gap concerns third-party technology producers. A PCBU that uses a mass-produced AI work allocation system developed by a third party may breach section 21A because of algorithmic behaviour the PCBU cannot inspect, modify, or control. This means, that if a PCBU does not use their own AI-system, they can still breach legislation as the Act imposes no obligations on the suppliers who design and create these systems. This creates a displacement of liability: the compliance burden rests entirely with the PCBU, while the actual individual most capable of engineering out the risk (the system's developer) faces no duty.

Also, inspecting digital work systems could carry a risk of exposing legally privileged communications embedded within AI platforms, and enabling ‘regulatory’ access to commercially sensitive data, such as workforce composition, productivity benchmarks, scheduling patterns, could be seen as an invasion of private communications.[9] There is a 48-hour notice requirement from SafeWork NSW guidelines, which tries to mitigate this clear legislative limitation, but do not resolve the underlying issue between WHS inspection and privacy, whereby the Act's protective intent is undermined at the point of individual exposure.

V PROPOSED REFORM

Three amendments could potentially improve the Act. First, the definition of “digital work system” should also include some type of threshold, clearly labelling the section 21A duty to systems. This would focus legislative obligations on systems genuinely capable of producing WHS harm.

Second, the Act should be extended to impose direct duty on suppliers of digital work systems to NSW PCBUs, reflecting the existing duties on designers, manufacturers and suppliers of plant and structures under Division 3 of Part 2 of the WHS Act. These third-party businesses should be required to disclose foreseeable risks, and this would be seen through providing documentation of algorithmic logic and notify PCBUs of changes to AI system behaviour. This reform would address the third-party liability gap and distribute compliance responsibility fairly.

Third, a genuine algorithmic transparency obligation should be created, requiring PCBUs to provide workers, upon request, with a clear explanation of how any digital work system affects decisions about their work, and to maintain regulatory logs of algorithmic outputs for a set number of years. This would mean the Act can become a mechanism to support ongoing harm prevention, particularly to protect privileged communication and private matters.[10]

VI CONCLUSION

The Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) is an honestly solid and historically necessary legislative tool. It resolves a genuine legal gap, recognises most risks as a primary concern of algorithmic management, and is a good path to protect the integrity of AI work systems. Its limitations are mostly the absence of a definitional framework, the lack of third-party obligations, and the need for more transparency. These, however, can be fixed through amendments, indicating that the current Act is an effective attempt to regulate work systems, to ideally protect employees from digital WHS hazards .[11]

VII REFERENCES

[1] Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5 (‘the Act’).

[2] Work Health and Safety Act 2011 (NSW) s 19(1).

[3] New South Wales, Parliamentary Debates, Legislative Assembly, 11 February 2026 (Sophie Cotsis, Minister for Work Health and Safety) (Second Reading Speech, Work Health and Safety Amendment (Digital Work Systems) Bill 2025).

[4] Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5, s 5, definition of ‘digital work system’.

[5] Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5, s 21A(1).

[6] Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5, s 21A(2)(a)-(d).

[7] Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) No 5, s 276E.

[8] Colin Biggers & Paisley, ‘NSW Amends WHS Act: Employers Are Now Expressly Required to Consider the Risks of Using AI’ (Online Publication, 17 February 2026) https://www.cbp.com.au/insights/publications/nsw-amend-whs-act-employers-now-expressly-required-to-consider-the-risks-of-using-ai.

[9] Norton Rose Fulbright, ‘NSW Parliament Passes Digital Work Systems Bill: What Employers Need to Know’ (Online Publication, 20 February 2026) https://www.nortonrosefulbright.com/en-au/knowledge/publications/d75c5d28/nsw-parliament-passes-digital-work-systems-bill-what-employers-need-to-know.

[10] Pinsent Masons, ‘NSW Becomes First Australian State to Regulate Digital Safety Risks in the Workplace’ (Online Publication, 13 February 2026) https://www.pinsentmasons.com/out-law/analysis/nsw-digital-work-systems-amendment.

[11]PwC Australia, ‘When Technology Becomes a WHS Risk: NSW's Landmark Act Spotlights Digital Work Systems’ (Online Publication, February 2026) https://www.pwc.com.au/legal/workplace-law/when-technology-becomes-a-whs-risk.html.