AI in employment law: balancing innovation, risk and regulation

Sponsored feature | Jake Gransbury, solicitor, HCR Hewitsons

The adoption of AI in the workplace is accelerating rapidly and has the potential to transform the way we work. A fundamental question for policy makers is to consider the risks these innovative technologies pose and to what extent new regulation, legislation, or both, is required. This is particularly pertinent as our current employment laws were not originally designed to account for AI.

A key issue – discrimination

One key concern is that the objectivity of decisions made by AI are only as good as the data on which those decisions have been made. This can cause bias to be ‘baked in’ to AI. On the other hand, it is known that humans demonstrate unconscious bias and no matter how hard an individual tries to arrive at an objective decision, bias is, in some cases, inevitable. It is therefore necessary to consider to what extent the risk of bias in AI is greater than human bias, and how to mitigate against those risks.

There is little case law to test employment claims in relation to AI. However, the Manjang v Uber Eats case showed the potential for these types of claims to be brought. This case involved an Uber Eats driver who was claiming indirect race discrimination based on the employer’s facial recognition technology being less accurate with certain races.

While this case settled before trial, it raised concerns about AI-driven bias in employment, prompting the Equality and Human Rights Commission to issue guidance warning employers to evaluate AI tools for potential discriminatory effects and ensure human oversight in automated decision-making.

Regulatory developments and risk mitigation

The government has announced plans to introduce legislation this year to address AI risks. These potential reforms indicate a shift toward greater accountability for AI in employment decisions, aligning the UK more closely with international regulatory trends.

However, there is still significant uncertainty as to how employment law claims concerning AI will be brought, as well as the future of legislation or regulation of AI. Therefore, at this point it is most important for employers to be aware of these issues and keep track of future developments. Some proactive steps an employer may take to reduce risk include:

- Providing training on AI

- Ensuring transparency on AI processes

- Introducing specific AI polices

- Ensuring a human element to final decision making.

For more information, contact Jake Gransbury, solicitor, Employment and Immigration team, on 01223 447403.

Visit hcrlaw.com.