31st January 2025 ❘ Legal News and Commentary
Will AI be replacing employees? The legal implications of the introduction of AI and GenAI in the workplace…
Will AI be replacing employees? The legal implications of the introduction of AI and GenAI in the workplace
Recently the CEO of OpenAI, Sam Altman, stated that AI and Generative AI (GenAI) will soon be replacing the capabilities of skilled workers, leaving their roles redundant. He recently told the BBC “In ten years, I think we will have chatbots that work as an expert in any domain you’d like. So, you will be able to ask an expert doctor, an expert teacher, an expert lawyer whatever you need and have those systems go accomplish things for you.” (BBC, 2023)
However, how likely is this in practice?
The answer varies across industries; 99% of tech leaders believe that GenAI would not replace jobs, (Nash Squared, 2024) while 42% of respondents across other industries believed their jobs might not exist in the next decade. (BCG, 2024)
A recent report by the Institute for Public Policy Research found that 11% of roles analysed were already impacted by AI, with entry-level and part-time jobs most likely to be affected. (IPPR,2024) Creative industries are also currently impacted, with many employers seeing AI used as a cheaper and faster alternative to employing designers. Unfortunately, this raises discrimination concerns, given part-time and entry-level roles are most likely to be undertaken by women and young people.
What are the practical issues surrounding AI?
It’s worth remembering that AI is not without its practical issues, which will inevitably slow its implementation by businesses. Currently, OpenAI, a leader in this area, spends approximately $700,000 daily to run ChatGPT and is operating at significant losses. (The Economic Times, 2025)
Further, there are substantial climate issues to consider. AI operates from large data centres which require huge amounts of energy to run, and significant amounts of water to cool by comparison to traditional computing. Globally, AI-related infrastructure may soon consume six times more water than Denmark, a country of 6 million. (Li et al, 2025)
As highlighted by the United Nations Environment Programme, we need to make sure the net effect of AI on the planet is positive one before we deploy the technology at scale, which could contribute to a slowed uptake of AI in environmentally conscious businesses. (UNEP, 2024)
What uses can AI have in the workplace short term?
Rather than replacing employees altogether, it is more likely that AI in the workplace will see a rise as a support tool, assisting with common issues such as automating the recruitment and hiring process and aiming to remove any potential unconscious bias from decision-making.
Legally, what issues may this have?
It may be that because of how AI is trained, it remains susceptible to prejudice. At a basic level, an AI system is trained by feeding it data. AI systems will then re-implement patterns based on the data fed into them. This means that if the training data contained some form of prejudice, conscious or unconscious, then the AI may reproduce similar discriminatory results.
For instance, Amazon’s AI recruitment tool trained on its current employee cohort was found to be discriminatorily favouring male job applicants and was subsequently shut down. (Reuters, 2018)
When introducing AI into their businesses, companies also need to be aware of the potential GDPR implications. Companies act as data controllers for client data in their day-to-day course of business. By introducing AI models to automate business functions, the company is allowing the AI model to process protected data. Companies remain obligated to ensure their client data is secure, which means they need to know where the data is being shared, how it is being stored and how secure it is when used by the AI model to fully comply with their GDPR obligations.
What issues may the use of AI bring in an Employment Tribunal scenario?
Additionally, in a tribunal scenario, using AI to automate decision-making may make it more difficult for employers to rely on defences which require them to justify their decision-making processes.
For example, employers who use AI to make decisions about disciplinary action, pay changes, promotions or redundancies may struggle to justify the basis for the decision when challenged, thus being unable to mount a successful defence against potential claims of unfair dismissal or discrimination.
How can I protect my business moving forward?
There are currently limited legislative requirements on businesses regarding AI use, beyond existing employment and GDPR obligations. However, in September 2024, the government joined the ‘Council of Europe Framework Convention on Artificial Intelligence and Human Rights, Democracy and the Rule of Law’, under which they committed to maintaining a comprehensive legislative framework on AI. We therefore expect coming regulations will introduce onerous obligations on employers, making early preparation essential.
In order to protect your business moving forward, we would recommend introducing a workplace policy on AI to set out the rules around its use and misuse in the workplace at all levels. It may also be useful to consider the environmental impact of any AI introductions and whether this impact could be reduced by taking a different approach.
Our Employment team and training unit is on hand to support your business through these changes, to find out more please get in touch.