1. Introduction

Background

1.1Technology is rapidly evolving, and is shaping industries and changing the nature of work. The proliferation and integration of technologies in workplaces, such as automated decision-making (ADM) and artificial intelligence (AI)—particularly machine learning(ML)—is accelerating this digital transformation.

1.2These technologies present both opportunities and risks, and employers, workers, and regulators are adopting them at scale. COVID-19, and advancements like the surge of generative AI, have intensified the uptake of emerging technology. This is increasing automation and augmentation across the economy.[1]

1.3While it is commonly accepted that AI and ADM will continue to substantially impact the workplace, predictions vary. The International Monetary Fund predicts that about40 per cent of employment worldwide will be impacted by AI, and Goldman Sachs reports that 300 million jobs could disappear due to automation through generative AI.[2] Regarding ADM, empirical data about its use in employment settings is just starting to surface, and it is difficult to measure in part due to its broad scope.[3]

1.4While technology in the workplace is not a new phenomenon, there have been changes in the development and application of technology. For instance, employers are increasingly using emerging technologies to automate not only tasks but decisions traditionally made by humans. This is considerably impacting ‘how work is organised and how the employment relationship is managed’, providing both benefits and risks for workers.[4]

1.5The digital transformation has exposed some gaps in regulatory frameworks and workplace protections, especially for data and privacy. Regarding broader AI policy, the Department of Industry, Science and Resources (DISR) is leading the whole-of-government approach, with a focus on the safe and responsible development and deployment of AI.

Referral and conduct of inquiry

1.6On 9 April 2024, the House Standing Committee on Employment, Education and Training (the Committee) adopted an inquiry into the digital transformation of workplaces, following a referral from the then Minister for Employment and Workplace Relations, the Hon Tony Burke MP. The Committee explored the rapid development and uptake of ADM and AI, particularly ML techniques, in the workplace. The Terms of Reference can be found on page ix.

1.7The Committee announced its inquiry via media release and welcomed written submissions. The Committee received 66 submissions, which are listed in AppendixA. It held 11 public hearings, and the transcripts are available on the Committee’s website, and details are included in Appendix B.

1.8The Committee visited Woolworths’ Melbourne South Regional Distribution Centre in Dandenong South and NEXTDC’s Data Centre in Tullamarine. These site visits were undertaken to consider the digital transformation of workplaces and its impacts on organisations, employers and workers.

Key concepts

1.9The Tech Council of Australia provided an overview of definitions essential to considering the digital transformation of the workplace. Figure 1.1 outlines these.

Source: Tech Council of Australia, Submission 62, p. 3.

1.10AI systems involve a spectrum of automation, and enable machines, like computers, to perform various functions. AI involves algorithms—a set of instructions to perform a computation or solve a problem. For instance, AI can generate ‘predictive outputs such as content, forecasts, recommendations or decisions’.[5]

1.11The Department of Employment and Workplace Relations (DEWR) commented:

There are broadly two phases of the AI lifecycle: development and deployment. In the first phase, an AI model is developed through training on historical data to achieve a specific output with a given input. AI models are the ‘engines’ of AI systems and can involve various components, including algorithms. In the deployment phase, AI models are implemented in AI systems that are designed for specific purposes.[6]

1.12ADM refers to automated systems making or assisting humans to make interim or final decisions. Automated systems may involve ‘partial automation provided by decision-support tools, automated decisions made with human oversight, through to ADM systems that seek to fully automate decisions made without human input’.[7] ADM may use ML to automate or perform tasks.

Report outline

1.13This report consists of five chapters, including this introduction.

• Chapter two provides a summary of key Commonwealth legislative and regulatory frameworks that apply to the digital transformation of workplaces. It also outlines reforms and initiatives developed by the Australian Government to promote safe and responsible digital transformation, with a focus on AI and ADM. The chapter presents perspectives on regulatory efforts, and considers the importance of public trust in the use of technologies in workplaces.
• Chapter three discusses the wide-ranging opportunities presented by AI and ADM for employers, workers, and regulators. It notes that Australian workplaces are not adequately leveraging these technologies to realise the full suite of benefits, such as job creation, increased productivity and efficiencies, enhanced regulatory compliance, augmentation of work, and upskilling and retraining of workers.
• Chapter four examines how AI and ADM are exacerbating existing concerns regarding privacy, and monitoring and surveillance in the workplace. The chapter considers how widespread disclosures of worker data by employers are exposing workers to serious privacy breaches. It also discusses how AI and ADM are being used to undermine health and safety, heightening bullying and harassment, and interfering with industrial action rights.
• Chapter five considers specific harms arising out of poor design, implementation, and use of AI and ADM in workplaces, and recommends mitigation measures. It also explores the importance of job security, consultation with workers in the design and introduction of AI and ADM, and incorporation of transparency and accountability measures for these technologies. The chapter also considers the disproportionate effects of digital transformation on marginalised cohorts.

Acknowledgements

1.14The Committee extends its gratitude to everyone who provided written submissions, attended public hearings, and hosted and participated in the Committee’s site visits. The Committee was impressed by the energy and insights of those who contributed to this inquiry.

Footnotes

[1]Department of Employment and Workplace Relations (DEWR), Submission 3, p. 1.

[2]Basic Rights Queensland, Submission 63, p. 22.

[3]QUT Centre for Decent Work and Industry, Submission 17, pp. 1–3.

[4]QUT Centre for Decent Work and Industry, Submission 17, p. 3.

[5]Business Council of Australia (BCA), Submission 52, p. 6.

[6]DEWR, Submission 3, p. 10.

[7]Tech Council of Australia, Submission 62, p. 1.