The reports you read were likely based on commentary from techies who have no understanding about law, plus a handful of lawyers involved with digital rights organisations that have an incentive to play up the significance of the legislation a bit / talk about worst-case scenarios, worst possible interpretations of a dangerous law and the broadest possible interpretation of who constitutes a "designated communications provider". The government has stated that's not how they interpret the legislation, as the service provider will be the employer not the employee, and I don't think government lawyers are in the habit of arguing that the government _doesn't_ have power to do something.

I'm as suspicious about the Assistance and Access Bill as anyone, but the "telling an employee to implement a backdoor without telling their employer" is really a red herring and I don't know why the Australian tech community was so keen to go along with that.