NRF & innovation: AI and legal tech in employment law

Employee data protection

The use of AI systems in an employment law context can have a significant impact on the future career prospects, livelihood and rights of employees. The existing provisions of the GDPR must be adhered to when using such systems, including, in particular, the prohibition on automated decisions pursuant to Art. 22 (1) GDPR. It applies, among other things, to the use of AI systems for tasks that may affect the recruitment, terms and conditions of employment or termination of an employment relationship. Every employee has the fundamental right to be guaranteed that decisions of such relevance are not made solely on the basis of automated processing and without human involvement. The use of corresponding AI systems should therefore be thoroughly considered and evaluated in each individual case to ensure compliance with applicable (data protection) regulations.

Works constitution law

When implementing AI technologies in an employment context, co-determination rights of the works council must also be taken into account. The amendment of the Works Constitution Act (Betriebsverfassungsgesetz – BetrVG) through the Works Council Modernisation Act (Betriebsrätemodernisierungsgesetz – BMAS) in 2021 has strengthened the works council’s co-determination rights regarding the use of AI in an employment context. Additionally, the ‘traditional’ provisions of section 87 para. 1 no. 6 Works Constitution Act may also give rise to co-determination rights of the works council when using AI under certain conditions Against this background, employers should always carry out an assessment of co-determination rights on a case-by-case basis to prevent future conflicts with the works council and to mitigate the associated risks.

Diversity, non-discrimination and fairness

The General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz – AGG) prohibits discrimination and sets clear limits for the development and use of AI. Throughout the entire recruitment process and when assessing, promoting or continuing an employment relationship, the use of AI systems can, for example, lead to the perpetuation of historical biases affecting certain groups, such as against women, certain age groups, people with disabilities or people of a certain ethnic origin or sexual orientation. It is therefore important to ensure that the provisions of the General Act on Equal Treatment are not undermined by the use of AI, as this involves particular legal risks for the employer.

Training and guidelines

Providing appropriate training and further education programmes, can ensure that all relevant parties within a company have the necessary knowledge to comply with the regulations and their correct enforcement. The (covert) use of AI tools by employees in the performance of their work involves considerable legal and economic risks for employers. These risks can be minimised or – at best – completely avoided by providing targeted training and establishing internal guidelines on the use of AI in the workplace.

Our advisory services

• Application and contract management using AI technology
• Drafting of guidelines, rules of conduct and work instructions
• Comprehensive support in the complex field of co-determination rights
• Legal operations advice on tailor-made technological solutions (NRF Transform)