The latest legal challenge from workplace AI use

On the back of new findings that AI is appearing in unfair dismissal and workplace investigations, workplace lawyers are urging employers to reconsider AI policies from a more holistic standpoint.

Employers need to consider AI as a productivity, technological, and legal issue.

New research from DLA Piper’s The AI Year report revealed that more than half of ANZ respondents have seen AI use or misuse feature in employee misconduct or compliance investigations, and another 33 per cent have seen its appearance in disciplinary proceedings.

Further, 68 per cent of ANZ respondents agree their organisation should be concerned about the seeming increase in unfair dismissal cases that involve unclear, outdated, or ill-conceived AI use or disclosure policies.

The findings stem from a survey of 975 leaders across 13 markets and five sectors.

According to DLA Piper New Zealand partner Carl Blake, the ongoing challenge for employers is balancing innovation with trust.

He said: “Organisations are encouraging employees to create value with AI, but the employment framework needs to keep pace. That means training, consultation where required, clear accountability for AI-assisted decisions and practical controls that managers can actually apply.”

Blake also said the risk is not dissolved by banning tools or limited access, but by implementing defensible processes “for how AI is introduced, monitored and relied on in employment decisions”.

Despite this, 69 per cent of ANZ respondents reported their organisation limits staff to a narrow set of tools, and 16 per cent find they are not provided a clear point of view on AI.

In these cases, employees are left to fill the gaps themselves, opening the organisation to a range of security risks, not to mention a stagnation in productivity as workers take time to experiment with AI functions.

Mitch Robertson, employment partner at DLA Piper Australia, said employers need to acknowledge the realism of contemporary AI use.

“AI is now part of workplace conduct, performance, hiring, restructuring and disciplinary risk. Employers need to be clear about permitted use, disclosure obligations, confidentiality, supervision, human review, and the consequences of misuse,” he said.

“The employment risk is not only that staff use AI without approval. It is also that employers use AI in ways that affect employees without sufficient transparency, procedural fairness, or human oversight.”

Workforce strategy is already responding to AI, with 75 per cent of ANZ survey participants claiming that it has affected the number and nature of new hires, while 44 per cent identified workplace redesign and reskilling as a top priority for their workforce this year.

In this way, DLA Piper New Zealand country managing partner Laura Scampion said these findings warrant the inclusion of broader employment, privacy, confidentiality, discrimination, restructuring, and disciplinary matters into existing AI policy.

“Employers should be asking practical questions now,” she said.

“Which tools are we providing access to, and which tools are we prohibiting the use of? What information can be input into AI tools by employees, and for what purpose? When must AI use be disclosed by an employee? What decisions still require human oversight or review? How are our managers being trained on each AI tool currently in use?

“These are the questions that will matter if AI use is later challenged.”

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