Employment lawyers point out the broader implications of the government's policy proposal
Australia's plan to enshrine artificial intelligence (AI) safety and security protections signals a broader shift in accountability on AI use for employers in the country, according to employment lawyers.
The plan, unveiled by Prime Minister Anthony Albanese this week, wants to mandate all frontier AI companies that wish to operate in Australia to comply with six obligations:
- Maintaining security controls across all stages of development and deployment
- Identifying and managing serious risks associated with their models
- Allowing independent evaluation of their models
- Providing mandatory notification of incidents to the Australian Government rapidly
- Maintaining and publishing safety and security frameworks to ensure good governance, risk management and transparency
- Responding to updated standards and rules as technologies change
Should employers be concerned?
Most employers are unlikely to fall directly under the proposed rules, which target frontier AI developers, but the plan still carries implications for how organisations use AI at work, employment lawyers told HRD Australia.
"The immediate focus of the announcement is AI companies, so employers should not assume that every business using AI will face the same direct regulatory obligations," said Paul O'Halloran, Partner – Accredited Specialist (Workplace Relations) at Dentons.
"But it is a clear signal to scrutinise the AI tools used in recruitment and workforce management, ask suppliers tougher questions about safety and security, and retain meaningful human oversight of decisions affecting employees."
Melini Pillay, Principal at McCabes, similarly noted that the measures announced to date suggest a focus on the development, testing, deployment and governance of advanced AI systems, rather than the routine workplace use of products such as Microsoft Copilot, ChatGPT or similar productivity tools.
"That said, the proposal signals a broader regulatory shift towards increased accountability, transparency and risk management of AI technologies, particularly where they may contribute to outcomes such as discrimination, privacy breaches, safety risks or other regulatory harms," Pillay told HRD.
The government's proposal also includes a new AI safety regulator, which would enforce the protections and be able to impose significant penalties on AI firms that fail to comply with the mandatory obligations.
Pillay noted that it seems "unlikely" that the new regulator would be directly concerned with routine workplace use of these tools by employers, except where that use gives rise to existing legal obligations or identifiable risks.
"In any event, at this stage, what we know is that the current focus appears to be on addressing risks at the technology-development level, including known concerns regarding bias, safety, security and reliability," she said.
"If effective, that approach may reduce some of the challenges employers and businesses face when adopting AI-enabled products by providing greater confidence in the systems being deployed."
What can employers do?
With the policy still at a proposal stage, Pillay said its practical application has yet to be developed.
"It is therefore possible that downstream and supply chain governance, procurement, assurance and record-keeping expectations may emerge for organisations using AI systems, particularly in regulated sectors or higher-risk use cases," she said.
O'Halloran said employers should act before the legislation takes shape.
"Employers should not wait for the legislation to reflect on where AI is being used across their business and who is accountable when something goes wrong," he said. "Clear workplace policies, staff training and a process for escalating AI-related incidents are sensible preparations, even while the detail of the proposed regime remains unknown."
