Many of the HRM Platforms May be rushing at Pace to Embed AI Tools in their Platforms Without the Necessary Boundaries and Data Protections in Place 

AI activities in HRM software systems may contribute to the dissemination of, or provide access to, employee-sensitive data beyond core HRM and Payroll processing.

The recent AI attack on Meidare could be the “candle in the mine” moment we should be aware of. 

Employee records contain highly sensitive data that needs protection and should not be used as a product to sell or expose for their benefit.

Let’s be careful with this data. 

The Employment Hero Financial Review article  

https://www.afr.com/technology/bids-for-unicorn-employment-hero-test-2b-value-in-seek-sell-off-20260812-p60np8 

Are Employment Hero Reported Activities Concerning?

Blog by Tim Dive Director HR Cartel Podcast

We should hear from Employers who believed they were only using a software platform that made compliance easier, unknowingly exposing their employees to the platform’s headhunting functionality, and now, all employees are on a list of potential labour hire candidates to be placed elsewhere by Employment Hero with their new strategy to become an “Employer of Record” using the platform, boasting to make the employee “cheaper” to engage. Would make for a very interesting discussion from the user’s perspective, worth exploring.

Reported by Lucas Baird in the Financial Review

Employee onboarding platforms run by Employment Hero and MYOB could be banned from advertising certain superannuation funds to new starters at their businesses under new laws that threaten their marketing deals with the retirement savings industry, which are worth millions of dollars.

The pair got nearly $11 million from four of the country’s largest super funds – AustralianSuper, Australian Retirement Trust, Aware Super and Cbus – last year alone, to secure them a more prominent place on screens designed for staff to select a fund for a new employer to pay into when switching jobs.

The advertising of super funds on onboarding platforms has come under scrutiny from consumer advocates and Treasury, which found in a 2023 review that the practice risked leading people to make uninformed decisions, exposed them to inappropriate products and caused them to open duplicate funds.

Under laws that passed parliament last week, onboarding platforms will not be able to advertise or display any super funds to a new starter at a business, except the default provider for a given industry or workplace, unless the Tax Office can identify a pre-existing “stapled” account owned by that employee.

Employment Hero chief executive Ben Thompson said the regulations, which come into force from July, would limit consumer choice and competition. Before presenting advertised options, Employment Hero’s system allows new starters to check if they have an existing account within a network of partner funds.

“As it stands, we will not be able to fulfil our obligations to our customer, in this case super funds, with what they see as a valuable service,” Thompson said.

While he agreed with the purpose of the laws, there were “technical issues” that meant the ATO would often not be able to find a stapled fund, leading to more duplicate super accounts, not less. This is because the ability to “staple” an account to a worker depends on their employer proactively registering with the ATO so that it can collect the data required to make this link.

“This will have the complete opposite effect of what was intended, and will lead to the creation of nearly 300,000 new duplicate funds per year because the worker will only be shown the industry default and nothing else,” Thompson said.

“We would like to be able to do what the aim of the legislation is: to present a new employee with their pre-existing fund. That is largely how we work with superannuation funds now.”

Stapling a ‘surmountable’ challenge: SuperAPI

Employment Hero’s modelling indicated the ATO stapling process could fail to staple a fund to a new employee up to 80 per cent of the time. This is disputed by the ATO.

“For the 2025 financial year, the ATO received around 260,000 stapled fund requests from employers where the ATO can establish a relationship between the employer and the employee,” it said. “The ATO provided stapled fund details for around 195,000 employees (75 per cent).”

The ATO said there was no stapling data for most of the remaining workers because they were entering their first job and did not have a super account.

“Other reasons why employers may not receive stapled fund details include where the ATO records don’t match the employee details in the request, or where the employee’s account has been compromised,” the agency said.

Thompson called on the government to delay the rule changes until 2027 to ensure more businesses could register with the ATO, which was given $59.4 million from 2020 to 2024 to build the stapling regime.

MYOB, which runs the popular Flare onboarding platform, had similar concerns to Employment Hero, particularly for small and medium-sized businesses.

“The ATO’s digital infrastructure is not fit for purpose to realise the goals of this legislation,” a spokeswoman said. “We have significant concerns that SME employers will be unable to staple superannuation funds for their employees when the changes take effect”

But SuperAPI chief executive Riley James, whose company provides HR software to corporates and super funds, said it was a surmountable issue. “There are practical challenges to this. But they are the same challenges we have always faced, which is to get employers to activate super stapling,” he said.

Super Consumers Australia boss Xavier O’Halloran said the objections were “technical minutiae” that should not prevent the changes.

“Digging into this is interesting because we are finding often these platforms haven’t collected all the right information from people like the TFN (tax file number) – so part of it is on them to fix this because it is controllable from their end,” he said.

Employment hero Press Release 

Employment Hero and SEEK have agreed to resolve the legal action that Employment Hero commenced last year and the Federal Court has ordered that the proceedings be discontinued.

An Employment Hero spokesperson said: “Employment Hero now accepts that SEEK’s purpose in issuing the notice on 24 June 2025 terminating Employment Hero’s access to SEEK’s API was not one of substantially lessening competition, as Employment Hero originally believed, and has agreed to resolve the proceedings.”

A SEEK spokesperson said: “SEEK is pleased that the litigation has now ended and is satisfied with the outcome.”

Under the agreement, SEEK will reinstate Employment Hero’s access to its API, which allows its customers to post jobs with SEEK via Employment Hero. SEEK had previously agreed that it would maintain access temporarily while the court proceedings were pending.

Employment Hero’s access to SEEK’s API will be subject to complying with all applicable terms and conditions.

Neither Employment Hero nor SEEK will be making any further comment about the proceedings or their resolution.

Related Stories

Dispute	Period	Main Issue	Outcome
SEEK v Employment Hero	2025–2026	API access, competition law, recruitment platform integration	Settled; proceedings discontinued; API restored
Hostplus v Employment Hero	2024	Superannuation stapling and onboarding practices	Industry/regulatory scrutiny; no major court judgment reported

Employment software firm Employment Hero and online jobs marketplace SEEK have ended a Federal Court dispute over access to SEEK’s application programming interface, with the court ordering the proceedings be discontinued by consent.

The resolution follows a legal action that Employment Hero commenced last year after SEEK issued a notice in June 2025 terminating the company’s access to its jobs posting API.

In a statement, Employment Hero said it no longer maintains its original allegation that SEEK’s conduct had an anti-competitive purpose.

“Employment Hero now accepts that SEEK’s purpose in issuing the notice on 24 June 2025 terminating Employment Hero’s access to SEEK’s API was not one of substantially lessening competition, as Employment Hero originally believed, and has agreed to resolve the proceedings,” said an Employment Hero spokesperson, Employment Hero. 

SEEK supported the conclusion of the case.

A SEEK spokesperson said: “SEEK is pleased that the litigation has now ended and is satisfied with the outcome.”

API access restored

Under the agreement between the companies, SEEK will reinstate Employment Hero’s access to its API. The interface allows customers of Employment Hero to post jobs with SEEK from within Employment Hero’s platform.

SEEK had already maintained Employment Hero’s access on a temporary basis while the Federal Court case progressed. The court ordered that access would continue during the proceedings.

Employment Hero’s ongoing access will now fall under SEEK’s existing contractual framework. The companies said the reinstated integration will operate subject to compliance with all applicable terms and conditions set by SEEK.

SEEK had previously raised issues about Employment Hero’s use of data and adherence to its API rules in communications with customers. Employment Hero denied any breach of terms at the time.

Origins of dispute

The dispute began after SEEK issued a notice on 24 June 2025 stating it intended to terminate Employment Hero’s API access from August that year.

Employment Hero then filed Federal Court proceedings that alleged breaches of competition law. The company argued that the termination would disrupt recruitment processes for many small businesses that rely on the integration between Employment Hero’s platform and SEEK’s jobs board.

SEEK rejected the allegations and said it would defend the case. The Federal Court later ordered that API access would remain active on an interim basis while the matter was before the court.

The case centred on access to a digital connection that links Employment Hero’s software with SEEK’s job advertising service. The integration lets employers create and publish job listings on SEEK without leaving Employment Hero’s system.

Termination of access would have required customers to manage SEEK job postings separately from their existing workflow in Employment Hero.

Legal proceedings discontinued

The companies have now confirmed that the Federal Court proceedings have ended. The court ordered that the matter be discontinued by consent, following agreement between the parties.

The outcome removes the prospect of a judicial ruling on the competition law issues raised in the original claim. The parties did not disclose any financial terms or further commercial conditions associated with the agreement.

Both sides said they will not provide additional information on the case beyond their prepared comments.

Frequently Asked Questions.

Is it safe for AI to be used in HRM platforms?

AI is here to improve productivity, but sensitive data needs to be protected from being used to train the models and from being easily accessed illegally for data theft 

Is AI safe to use in payroll systems?

Yes, if it’s used to help manage the workflow and does not have access to sensitive data like TFN and Bank details, etc.

Can AI produce compliant payroll for Australia?

At this stage, it is not found to be compliant with the FWO; they themselves recommend it not be used today due to what they say are “uncertainties-ambiguities-and-errors-awards” 

https://www.fwc.gov.au/about-us/news-and-media/news/fwo-referrals-apparent-uncertainties-ambiguities-and-errors-awards 

Why does payroll data need to be secured from hackers?

Payroll systems require highly valuable data that hackers can exploit to their advantage