How Australia's data centre reforms could reshape workforce obligations

New national standards for AI unveiled last month by prime minister Anthony Albanese are expected to address mounting economic and environmental concerns associated with large-scale, data-centre development in Australia.

What the prime minister’s speech also made clear is that job security would be a central tenet of the federal government’s plans to introduce a new unified, regulatory framework for AI infrastructure development. He said there was a need to “create a new generation of good, secure jobs” to guarantee longer term job opportunities for Australians for years and even decades after data centres have been built.

Further details on the new standards are due to be presented to the National Cabinet later this month and will give clearer indications as to how forthcoming legislation might affect employers, from potential changes to work health and safety and other types of enhanced compliance obligations.

In the meantime, industry stakeholders should be aware that workforce planning and local employment obligations will likely form part of any compliance requirements, with legislation anticipated to be introduced into parliament in the first half of 2027.

The federal government is likely to seek to embed ongoing employment commitments as part of its regulatory framework, potentially through licensing or approval conditions. We outline below how the current proposals sit within the government’s broader policies on workplace and industrial relations and how businesses and trade unions can prepare.

Reshaping industrial relations

The prime minister has explicitly flagged that data centres will need to create more jobs beyond those generated during their construction phase. This sits squarely within the broader legislative agenda the Albanese government is pursuing through the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 (the BCW bill), which is awaiting Royal Assent.

The BCW bill forms part of the Australian Labor Party’s (ALP) continued efforts to reshape industrial relations in Australia by strengthening “cooperative workplace frameworks”. The data centre sector, with its construction, infrastructure, and operational workforce layers, is precisely the kind of industry that will feel its effects.

The bill is relevant to data centre operators and their construction and operational workforces, including:

• cooperative enterprise bargaining: the bill advances the government's agenda of encouraging enterprise-level agreements, and bargaining that is genuinely cooperative and outcomes-focused. This will be directly relevant to data centre operators negotiating enterprise agreements covering both construction-phase and long-term operational employees
• multi-employer and supply chain obligations: given the complexity of data centre supply chains, which typically span large construction contractors, specialist subcontractors, and long-term facilities management providers, any strengthening of multi-employer bargaining frameworks or supply chain labour obligations will have both direct and indirect costs and structural implications for project procurement and operations
• enhanced good faith bargaining requirements: the bill will also affect how operators and their contractors approach negotiations with unions, particularly in a sector where unions such as the Construction, Forestry and Maritime Employees Union (CFMEU) and Electrical Trades Union (ETU) are heavily active at the construction phase, and where operational workforce representation is continuing to grow
• consultation obligations on major workplace change: as data centres increasingly deploy AI-driven operational systems, such as automated monitoring, predictive maintenance, and AI-assisted security, the Fair Work Act 2009 (Cth) obligations around genuine consultation with employees on major workplace change will be engaged. The BCW bill's framework also reinforces these obligations and operators should not treat them as a formality.
  

Skills shortages and labour supply

The data centre sector already faces acute labour and skills shortages globally. Arguably, the government's interventionist policy compounds this issue. If next-generation data centres are required to meet energy generation, water efficiency and employment obligations simultaneously, the demand for specialised technical and operational workforces will intensify sharply. 

Employers in this sector will need to think carefully about enterprise agreements, workforce planning frameworks, and skills and training obligations. This is particularly the case if community benefit or local employment conditions are built into approvals.

AI-driven workforce disruption

The policy reflects the scale of AI disruption to both the public and private sectors, and the government's desire to embrace frontier AI investment while boosting job opportunities in a way aligns with Australian values.

However, the broader roll-out of AI in Australian workplaces raises significant employment law questions that operators and their clients will need to manage. These include the use of AI in hiring and performance management decisions, obligations under the Fair Work Act 2009 (Cth) around genuine consultation with employees on major workplace changes, including AI-driven restructures, and potential adverse action risks where AI tools influence employment decisions.

Community benefit obligations

As we wait for clarification on the new national standards, there needs to be considerable engagement with a wide range of stakeholders to coordinate regulation, implementation and the impact on employee relations at both the federal and state level.

State governments are also considering requiring data centre operators to provide financial benefits to local communities. If these obligations are structured as ongoing levies or contributions tied to operational presence, this could also have implications for workforce cost modelling and enterprise-level bargaining. This may also interact with the cooperative workplace framework that the BCW bill is seeking to advance.