The Council of Small Business Organisations Australia (COSBOA) has condemned the Work Health and Safety Amendment (Digital Work Systems) Bill 2025, introduced in the NSW Parliament on 20 November 2025, warning it will considerably increase compliance obligations for small businesses and expose them to severe penalties.

Matthew Addison, Chair, COSBOA says the Bill is a “trojan horse” that grants union officials with WHS entry permits unprecedented access to business digital systems, including platforms containing payroll data, customer lists, pricing algorithms, and operational strategies, with penalties for businesses that fail to provide “reasonable assistance”.

“Small businesses have legitimate commercial-in-confidence concerns about union officials accessing their operational systems,” he said.

“There are inadequate safeguards preventing these powers being used for industrial rather than safety purposes. A union official does not need access to an entire customer database to investigate a safety issue.”

The Bill also introduces new offences for breaches involving everyday software used by small businesses.

Mr Addison said the legislation fundamentally misunderstands how small businesses use technology.

“The Bill makes small business owners liable for work allocation, and anything from a standard spreadsheet to a basic off-the-shelf system is caught up in this overreach.”

Mr Addison said compliance obligations within the Bill are equally unclear, as it requires businesses to ensure digital systems don’t create “excessive”, “unreasonable” or “discriminatory” outcomes, yet none of these terms are defined. Small businesses face significant liability without a clear understanding of what compliance actually looks like.

“The NSW Government is creating penalties first and promising to define them later through regulator guidelines. That is backwards and fundamentally unfair,” he said.

COSBOA also warned that the legislation is being rushed through NSW Parliament before Safe Work Australia finalises national guidance on digital work systems; creating yet another instance of NSW breaking ranks on national workplace regulation.

“Small businesses operating across multiple states are struggling to keep up with conflicting requirements. NSW’s go-it-alone approach on workplace laws makes a complex environment even harder and it has to stop,” Mr Addison said. “If digital systems genuinely pose new safety risks, the response must be nationally consistent and evidence-based, not 50 pages of NSW-specific regulation that contradicts what businesses must do in other states and territories.”