Government urged to amend Fair Work Act amid rise of AI, ADM

Reforms needed to improve transparency, accountability on AI, ADM use at work

BY Dexter Tilo 12 Feb 2025

The Australian government is being urged to introduce reforms to the Fair Work Act in the wake of ongoing digital transformation in workplaces.

The House of Representatives Standing Committee on Employment, Education, and Training made the appeal in its Future of Work report that it tabled on Tuesday.

According to the report, the use of artificial intelligence (AI) and automated decision-making (ADM) is "significantly influencing" workplaces and the way they operate.

"To help future-proof Australia and its place in the digital world, it is essential to have the right frameworks in place and to build sustainable cross-sector collaboration," said Committee Chair Lisa Chesters MP in the report.

The committee recommended updates to the Privacy Act 1988 and the Fair Work Act 2009 to protect worker data and privacy amid a surge in the collection of employee data.

"The Fair Work Act 2009 could also be amended to improve transparency, accountability and procedural fairness regarding the use of AI and ADM in the workplace," Chesters said. "Employers must be held accountable for ADM or AI-driven decision-making."

Another recommendation from the committee is the classification of AI systems used for employment-related purposes as high-risk. This includes AI tools used in recruitment, referral, hiring, remuneration, promotion, training, apprenticeship, transfer, or termination.

Other recommendations for Fair Work Act

Overall, there are 21 recommendations outlined in the report. Some of the other recommendations suggest the government:

Work with states and territories to ensure greater consistency and modernisation of relevant legislation to enhance employee protections regarding the use of emerging technologies in the workplace.
Review modern awards for high-risk industries to ensure workers are protected where AI has significantly transformed job design.
Consider developing information campaigns about the use of AI and ADM in workplaces to build public trust in these technologies.
Develop data-driven policies and governance, and help maximise the benefits of technologies in the workplace.
Work with SafeWork Australia to develop a Code of Practice that identifies and addresses specific work health and safety risks associated with AI and ADM.
Encourage employers and peak employer bodies to address job displacement as a result of automation in their sectors.
Strengthen obligations on employers to consult workers on major workplace changes before, during, and after the introduction of new technology.
Require developers and deployers (employers) to implement measures against algorithmic bias.

"The use of artificial intelligence (AI) and automated decision-making (ADM) is significantly shaping workplaces across sectors, impacting employers, staff, regulators and the community," Chesters said in a statement.

"While AI and ADM can create opportunities for workplaces such as increased productivity and efficiency, and job creation and augmentation, these benefits need to be shared between employers and workers."

The recommendations come as governments across the world play catch up with the rapid development of AI by introducing policies to regulate them.

The European Union enacted last year the AI Act, which is the first comprehensive regulation on AI by a major regulator anywhere.