Artificial Intelligence and its Future Impact on Employment Law

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Artificial Intelligence (AI) is rapidly transforming various aspects of our lives, and one area where its impact is becoming increasingly significant is in the realm of employment law. As AI technologies advance, they raise important questions about the relationship between employers and employees, the potential for bias and discrimination, and the need for clear and comprehensive regulations. We explores the current state of employment law in the context of AI, the evolving policy landscape, and the international implications of AI on employment law.

AI has been deployed in several areas of the workplace. Firstly in recruitment, it is being used from the sourcing and screening stage through to assessments and psychometric tests. There are businesses using AI to assess performance and productivity of their staff. Whilst one of the most concerning areas for employment law is monitoring and surveillance.

Current Employment Law and AI

Under Common Law, the employment relationship is characterised by personal service, mutual trust, and confidence between employers and employees. This includes the ability to explain decisions made by employers, as established in the case of Keen vs. Commerzbank AG (2006). This fundamental principle may limit the extent to which AI can replace human decision-making in employment contexts.

Furthermore, the Equality Act 2010 in the UK prohibits discrimination against employees on the basis of protected characteristics such as race, gender, and disability. AI systems can inadvertently perpetuate bias if they are trained on biased data or if the algorithms themselves contain inherent biases. This poses a challenge for employers who use AI in their decision-making processes, as they must ensure that AI systems do not result in discrimination or bias against certain groups.

Moreover, Article 8 of the European Convention on Human Rights, incorporated into UK law via the Human Rights Act 1998, guarantees the right to privacy. This restricts the use of AI-driven monitoring and surveillance tools in the workplace, as excessive intrusion into employees’ private lives may infringe on this right.

Additionally, Article 22 of the UK General Data Protection Regulation (GDPR) outlines that individuals have the right not to be subject to decisions based solely on automated processing. This means that when AI systems are used to make significant employment-related decisions, there must be mechanisms in place for human review and intervention.

Policy Development in AI

The UK is currently navigating the complex landscape of regulating AI and its impact on employment law. A recent Research Briefing from the House of Commons titled ‘Artificial Intelligence and Employment Law’ highlighted the absence of explicit laws in the UK specifically addressing AI’s implications in the workplace.

In March 2023, the UK Government published a white paper titled ‘A Pro-Innovation Approach to AI Regulation.’ This paper outlined a regulatory framework based on five principles: safety, transparency, fairness, accountability, and contestability. While this approach provides a foundation for AI regulation, critics argue that it does not adequately address the employment law aspects of AI. There is a call for a more interventionist approach that takes into account the potential for AI to disrupt traditional employment relationships and the need for safeguards against discrimination and bias.

Various groups and stakeholders have proposed alternative approaches to AI regulation, highlighting the need for a comprehensive and adaptive framework that accounts for the nuances of employment law in the AI era. The ongoing debate over AI regulation in the UK underscores the importance of striking the right balance between fostering innovation and protecting the rights and interests of workers.

International Policy

On the international stage, the European Union (EU) is taking a more interventionist and prescriptive approach to AI regulation through the proposed AI Act. This legislation aims to provide a comprehensive framework for AI governance, with a focus on ensuring AI systems’ safety, transparency, and accountability. While the AI Act has broader implications, it also addresses AI’s impact on employment, emphasising the need to safeguard workers’ rights and prevent discrimination.

The EU’s approach to AI regulation, with its stringent requirements and focus on protecting individuals’ rights, presents a potential challenge for UK companies operating across borders. They may need to navigate varying regulatory landscapes and comply with different sets of rules when dealing with AI in employment contexts.

The future impact of AI on employment law is a multifaceted and evolving challenge. Current employment law principles and regulations may require adaptation to accommodate AI technologies while ensuring fairness, accountability, and protection of employees’ rights. As the UK and EU develop their respective approaches to AI regulation, it is essential to strike the right balance between encouraging innovation and safeguarding the interests of workers in the AI-driven workforce of the future.

The government outlined the need to collaborate with regulators. The FCA are continuing their work on AI, with collaborations with Digital Regulation Cooperation Forum, to establish an appropriate framework for AI use in financial services, following feedback from discussion paper, machine learning survey and the AI Public Private Forum. The speed at which AI is produced has impacted the regulators abilities to suitably regulate.

This will clearly be a topic that is discussed over the next several years. But employers should be looking to identify the AI being used within their organisations and attempt to conduct an impact assessment against the employment and data protection legislation. Further, if you are in a regulated sector, you should keep an eye on any updates that may apply to your business.

If you would like to know more about our employment law services then get in touch here or call our employment team on 020 3051 5060.