AI at Work: What the Law (and the Risk) Looks Like
8 July 2025
AI and algorithmic decision-making is now deeply embedded in recruitment, performance tracking, and even disciplinary decisions. But the legal risks around automated decision-making is still evolving, and employers face serious compliance risks.
What does the law say?
Under UK GDPR, employees have the right not to be subject to solely automated decisions that have a significant effect on them. This includes decisions about recruitment (for example, CV screening by AI), disciplinary or capability outcomes, and performance rankings.
Where such processing occurs, employers must:
- Provide meaningful information about the logic involved.
- Offer the right to obtain human intervention.
- Enable the individual to contest the decision.
Key Risks
- Discrimination: biased data can lead to unlawful outcomes.
- Lack of transparency and explainability: AI systems are often ‘black boxes’, making it difficult to explain how decisions are made.
- Lack of documentation: employers may struggle to prove compliance without a proper audit trail.
- Failure to notify or offer human review.
What employers should do
- Audit your use of AI tools in HR processes.
- Ensure there is always a human in the loop.
- Ensure transparency and accountability mechanisms are in place.
- Update internal data protection policies and privacy notices.
- Provide training to HR and senior leadership on AI compliance and ethical considerations.
Boardside can support you in designing ethical and legally compliant approaches to AI in the workplace. Call us on 0330 0949338
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Whistleblowing: Reform on the Horizon
The Government is backing a proposed major amendment to the Employment Rights Bill that would render certain non-disclosure agreements (NDAs) unenforceable. Specifically, the amendment targets clauses that prevent individuals from speaking out about unlawful behaviour, such as harassment, discrimination, sexual misconduct or bullying. This shift follows sustained criticism of how NDAs have been used to cover up workplace misconduct and protect serial offenders, particularly in high-profile sectors like media, technology and education. While the aim is to protect victims, the change could have unintended consequences for employers. If confidentiality can no longer be assured, some employers may be less inclined to settle disputes at all, which could in itself drive more claims to an Employment Tribunal. The proposals in terms of voiding certain agreements would also extend to employment contracts and internal policies, not just settlement agreements. What Is Changing? The proposed reform (an amendment to the Employment Rights Bill), which was tabled in Parliament on 7 July 2025, would: void any contractual clause that seeks to prevent a person from disclosing misconduct; apply not only to settlement agreements but also, potentially, to employment contracts, policy documents, and confidentiality agreements; introduce civil penalties for employers or advisers who breach the new provisions. Deputy Prime Minister Angela Rayner has stated that the purpose is to prevent NDAs from being used as “gagging clauses” that silence victims. Why This Matters for Employers: Fewer settlements? Without confidentiality, some employers may feel less secure in offering financial settlements to resolve complaints. Loss of control over reputation management: Public disclosure could increase the reputational risks for employers, particularly in unresolved or disputed allegations. Employee voice strengthened: The change would empower employees to speak out, but some may prefer private resolution. Removing this option may reduce flexibility. Boardside's View: We support the main aim of increasing transparency and preventing misuse of legal tool agreements which genuinely help parties resolve employment-based issues. We certainly accept that employers should not be allowed to abuse their positions. However, we share concerns that an outright ban may discourage settlement and create uncertainty for all parties. Action Points: Review all current template agreements and HR policies. Train HR teams and line managers on the lawful use of confidentiality provisions. Keep a close eye on the final form of the legislation as it progresses through Parliament. Boardside Law can support you in adapting your internal documents and approach to reflect the likely changes, as well as keeping you updated on the final wording and timeline of implementation. Contact us
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