Published on 10 October 2024
Everyone’s talking about artificial intelligence, the AI Act and algorithmic management. But what is (or will be) important to keep in mind?
The EU AI Act entered into force on 1 August 2024, garnering considerable media attention. Most of the rules it contains will come into effect as of August 2026. Many technological applications, however, are already subject to rules that must be observed
Automated individual decision-making, including profiling
Predating the AI Act, Article 22 of the GDPR has been in force and binding since 2018. For a while, the article – which may entail fines if breached – played no significant role in employment law practice. That has changed, at least since the ECJ handed down its decision in the matter of Schufa Scoring.
Art. 22(1) GDPR stipulates that all data subjects have the right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning them or similarly significantly affects them. It therefore definitely prohibits future use of complex automated decision-making based on AI. Many commentators argue that Art. 22 GDPR applies even when decision-making is not completely automated. Accordingly, algorithmic recommendations also fall under the criteria of Art. 22 GDPR. If this view prevails, it will have extensive effects, not only covering recruiting, bonus calculations or decisions on which workers to promote when these are based on a (partly) automated process. If job applications are automatically assessed or ranked, for instance, that also counts as automated decision-making.
If you’re planning to use such systems, make sure to consider aspects of employment law and data protection in advance, especially with a view to potential legal consequences such as fines, compensation for damages or annulment of measures.
Workplace labour relations
Regulations governing workplace labour relations must be observed in tandem with the GDPR. Algorithmic management cannot produce decisions or recommendations without processing personal data. As a rule, this means that works agreements are necessary and required by law. This holds true even for job applicants if (electronic) application systems include questionnaires to collect personal data. In such cases, even persons who are not yet employed by the organisation in question are covered by its works council’s co-determination right and the required works agreement.
