Artificial intelligence (AI) is an emerging technology with both immense potential for good and significant risks. Many UK businesses are adopting AI to streamline recruitment, promotion decisions, and performance reviews. This trend is expected to grow in the coming years.

AI promises to free up management time and make more objective decisions. However, research indicates that AI decision-making carries a risk of bias, potentially leading to discrimination. For UK employers, this risk must not be underestimated.

Understanding AI Bias

AI bias stems from the data used to train algorithms, which often reflects human biases. As one commentator noted, “if you don’t like what the AI is doing, it’s because humans are also doing it.” AI bias leads to decisions that may marginalise individuals based on race, gender, or other factors.

GDPR’s Fairness Principle

Employers using AI to process personal data must comply with GDPR’s Article 5(1) fairness principle. This requires fair and non-discriminatory data processing. Failure to do so can result in enforcement action or civil claims if individuals experience material or non-material harm, such as stress or anxiety.

AI in the Employment Context

In employment, AI can affect hiring or promotion decisions. Biased AI could negatively impact protected groups like women or ethnic minorities. Under GDPR Article 5(2), the employer must prove compliance if an investigation occurs. This can be challenging if the employer lacks understanding of how the AI was trained.

If AI bias causes employees with protected characteristics to be treated less favourably, employers could face discrimination claims under the Equality Act 2010. Damages can include both financial penalties and reputational harm.

Combatting AI Bias

Employers must take steps to prevent AI bias. This includes understanding how their algorithms work and reviewing the data used to train AI. Ensuring transparency is essential, as employers must explain to individuals what data is being processed and how decisions are made. Employees should also have the option to opt in or out of AI-powered decision-making processes without any negative consequences.

In Summary

To balance AI use with legal compliance, UK employers must ensure AI systems follow GDPR and employment laws. This involves updating data protection policies, privacy notices, and conducting impact assessments. By addressing AI bias and maintaining transparency, employers can use AI responsibly while minimising risks.

As AI technology evolves, employers must stay informed of their legal obligations. Adapting to new regulations and ethical standards is critical for maximising AI benefits while maintaining compliance and protecting employee rights.

5 Key Takeaway points

  • AI Bias Risk: AI decision-making can reflect human biases, leading to potential discrimination in recruitment, promotions, and performance evaluations.
  • GDPR Fairness Principle: Employers must ensure that AI-driven decisions comply with GDPR’s fairness requirement, treating all individuals fairly and non-discriminatorily.
  • Legal Consequences: AI bias in HR decisions can result in discrimination claims under the Equality Act 2010 and enforcement actions by the ICO.
  • Combatting AI Bias: Employers should audit their AI systems, understand how algorithms are trained, and maintain transparency with employees about AI usage.
  • Ethical AI Use: To stay legally compliant, employers must align AI practices with GDPR, employment laws, and ethical standards, while regularly reviewing AI systems for bias.

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