With a number of employment law and data privacy implications, the use of AI is a growing area of focus for regulators and the UK government. In the meantime, there are several considerations for employers implementing AI technology in the workplace.

There is no single, recognised definition for AI. Broadly, AI is understood as an umbrella term for a range of algorithm-based technologies that solve complex tasks by carrying out functions that previously required human thinking.

In the employment context, accelerated by the COVID-19 pandemic, AI is increasingly being used in all stages of the employment relationship, but particularly in recruitment.

AI in recruitment

Τhere are clear benefits in using AI to reduce resource time and costs:

• AI technology can be used to review and filter job applications.

• AI can be used to assess interview performance by using natural language processing and interview analytics to determine a candidate’s suitability in light of their soft skills and personality traits.

This reduces the amount of time that needs to be spent on these tasks by talent sourcing specialists and human resources, allowing them to focus on other valuable work.

Despite these benefits, there are some key risks and associated safeguards that employers in the United Kingdom should consider before implementing AI technology in their employment cycle.

KEY LEGAL RISKS – DISCRIMINATION

Under the Equality Act 2010, it is unlawful for an employer to discriminate against candidates or employees on the basis of “protected characteristics” (namely, age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, or sexual orientation). The use of AI can result in indirect discrimination claims where someone with a protected characteristic suffers a disadvantage as a result of an algorithm’s output.

To defend such a claim, the employer would need to show the use of AI was a proportionate means of achieving a legitimate aim. While the use of technology to streamline the recruitment process may be a legitimate aim, it is difficult to see how such a tool, which can have significant implications for a candidate, can be a proportionate means of achieving that aim without any human oversight.

The use of AI may also create other legal risks for employers, such as:

• Disabled people may face particular disadvantages in undertaking automated processes or interviews. For example, some systems read or assess a candidate’s facial expression or response, the level of eye contact, voice tone, and language, which could disadvantage candidates with visual or hearing impairments, those on the autism spectrum or with a facial disfigurement. Given the obligation under UK law to make reasonable adjustments to remove disadvantages for disabled people, an employer could potentially find themselves in breach of discrimination laws when using AI software as a blanket approach.

• Language and tone of voice can also be more difficult for some whose first language is not English, increasing the risk of racial bias and unlawful discrimination claims on the basis of race.

In the United Kingdom, compensation for unlawful discrimination is uncapped (although tribunals take into account the “Vento bands” when assessing compensation, the current upper band of which is approximately £56,000 for the most serious cases of unlawful discrimination).

KEY LEGAL RISKS – DATA PROTECTION

It is likely that the use of AI during the employment lifecycle will involve the processing of candidate and/or employee personal data. Employers should therefore be mindful of their obligations under data privacy regulation, with particular regard to three key principles: (1) lawfulness, (2) fairness, and (3) transparency.

The use of AI technology to make employment decisions, without human scrutiny, will fall within the scope of a “solely automated decision.” The UK General Data Protection Regulation (GDPR) and Data Protection Act 2018 restrict an employer from making solely automated decisions that have a significant impact on data subjects unless this is:

• authorised by law;
• necessary for a contract; or
• where explicit consent was given.

Even then, except where it is authorised by law, specific safeguards must be in place, such as a mechanism for the individual to challenge the decision and to obtain human intervention with respect to the decision.

The processing of special category personal data, such as health or biometric data, is further restricted unless on specific lawful grounds.

Any use of AI is likely to require a data protection impact assessment. If high risks to the rights of individuals cannot be mitigated, prior consultation with a relevant supervisory authority (such as the Information Commissioner’s Office (ICO) in the United Kingdom) is required and the AI technology cannot be deployed without the consent of the supervisory authority.

The ICO has issued guidance and an AI toolkit to assist organisations in identifying and mitigating risks arising from the use of AI technology.

MITIGATING THE RISKS

Notwithstanding the risks outlined above, the use of AI technology is developing rapidly and there are a number of steps employers can take to introduce innovative technology while minimising legal risk, including:

• ensuring they have fully trained, experienced individuals responsible for the development and use of AI to minimise the risk of bias and discrimination. The provider of the technology should be able to demonstrate that the data and algorithms have been stress-tested for bias and discrimination against candidates because of, for example, their gender, race, or age, and disparate impact assessments should be conducted on a regular and ongoing basis.

• establishing clear and transparent policies and practices around the use of AI in recruitment decisions.

• identifying appropriate personnel to actively weigh up and interpret recommendations and decisions made by AI in the recruitment process before applying it to any individual. It is important that meaningful human review is carried out; data privacy restrictions cannot be avoided by simply “rubber-stamping” automated decisions.

• not solely relying on AI—ensuring that AI is used only as an element to assist in recruitment decisions.

• ensuring that the process allows for human intervention: if a candidate needs adjustments because of a disability, make it clear with whom and how they should make contact to discuss what might be required.

• implementing ongoing equality impact assessments to identify early any issues or negative impact on diversity and inclusion as a result of the introduction of AI technology.

• prior to implementing AI, considering whether a data protection impact assessment is required. Additionally, employers can utilise the ICO’s AI toolkit to assess risk and implement mitigating measures.

• from a data privacy perspective, considering and identifying the lawful basis for processing personal data in this way before proceeding with any automated profiling or decision making.

• updating candidate and employee privacy notices to make clear the use of AI technology in the processing of personal data.

FUTURE DEVELOPMENTS

In the United Kingdom, there have been calls by the Trade Union Congress in a recent report recommending measures to protect against algorithm discrimination, including:

• a reversal of the burden of proof for AI use, where the employer must disprove that discrimination occurred rather than the claimant bearing the burden of proof;

• the creation of statutory guidance on steps that may be taken to avoid discrimination where AI is used; and

• mandatory AI registers to be regularly updated by employers and available to candidates.

However, the UK Government has produced a white paper, “AI regulation: a pro-innovation approach” and is currently taking views on it as part of the consultation process. So we need to watch this space on the shape of government regulation on the use of AI.

If you would like an AI policy for your handbook please email nicola.goodridge@goodhr.co.uk or call +44 7917878384

This month’s newsletter is from Darren Hilton, an Executive Coach who happens to live a stone’s throw from me but who I had never met before bumping into him at a mutual friend’s birthday party! He has lots to add to the GoodHR offering and so I invited him to share his tips on how to give feedback – which neatly follows hard on the heels of the most recent newsletter giving top tips on how to hold a ‘good’ appraisal. So do read his pearls of wisdom and if you would like to speak to him directly his contact details are at the end of this newsletter……

Ever received feedback that really stings? Or been given insight into how you’re experienced by others, challenging your self-perception but at the same time encouraging you to change your behaviour? Maybe you’ve been given the s**t sandwich method? You hear the positive comments, but the mountain of negatives makes anything positive seem like a distant memory.

These conversations could be the most enlightening we will ever experience and yet they are often awkward, may avoid the difficult topics or deliver in a way that is difficult to digest, let alone do anything about. Feedback opportunities often arrive alongside annual appraisals or performance reviews – they can lead to a stressful situation for both parties, especially when they are linked to salary and bonus reviews.

And yet feedback given in a caring and challenging way can be very effective too. It can help the receiver of the feedback to:

• recognise their strengths and learn how to play to them more actively;
• understand how they may become derailed in certain situations and how to reduce this;
• receive recognition for previous and current performance;
• receive encouragement for future projects.

So instead of avoiding feedback, or delivering it ineffectively, you may want to try a different approach. Stephen M. R. Covey’s comment, that we often judge ourselves by our intentions and other by their behaviours, is a good place to start to get to the heart of what is often missed:

• When setting up your feedback session, share your intention for the feedback in a way that makes the person feel valued and demonstrates that you have their best intentions at heart.
• Explain what you would like to discuss, without going into detail, and ask if it is a good time for them to have this type of conversation. Gaining permission is often ignored and yet it can ensure the conversation feels balanced and provides the recipient with some control.
• Discuss in the context of your, or others’, perceptions of observed behaviours, which avoids it feeling like a character assassination.
• Try to understand what was going on for the person, from their perspective.
• Ask questions that reveal their intentions, what was driving these behaviours, where they were coming from, what were they trying to achieve.
• Discuss the gap between the outcomes they achieved and their intentions, whether these were consistent and acceptable.
• Discuss what other options might be available, agree how they will implement them and how this can be reviewed.

Common elephant traps

• Both parties often prepare for the meeting by building up perceptions and stories that can be unhelpful and setting up a dynamic that may work against their intentions.
• Managers may rush to get the negative out of the way and then flower it up with positives, brushing over the important feedback and leaving the employee confused about what is being said and what they can do about it.
• Managers may avoid the negative and simply focus on the operational, making it a transactional experience rather than a developmental one.
• Without clarity about what changes are expected both parties can come away believing they have achieved their aim and yet may be at opposite ends.
• Trust can be broken because neither party says what they mean.

So, what is the pay-off?

• The way you give feedback is as important as the feedback itself.
• Setting people up properly to receive feedback is crucial.
• Taking an enquiring stance can help to appreciate what is really going on.
• When you understand what is really going on, you have a better chance of changing behaviour and performance.
• When handled well trust will increase and openness to feedback can encourage continuous learning.

If you would like any advice, please do contact Darren Hilton at darren@tappingthesource.com or call him on +44 7740 172759

From Nicola at nicola.goodridge@goodhr.co.uk or call +44 7917878384