Jun 26
Artificial intelligence is becoming part of everyday business operations for many OMBs. From drafting emails and analysing data to supporting recruitment and HR processes, AI can improve both efficiency and productivity. However, alongside these benefits are important employment law risks to consider.
The key is to strike a balanced approach. While AI can support better business outcomes, it can also create challenges if it is not properly managed.
In this article, Sally Togher, Head of Employment at Raworths, highlights some key considerations.
For most OMBs, AI’s primary advantage is time saving. Routine tasks such as document drafting, data entry and reporting can be automated, allowing employees to focus on more valuable work.
AI can also improve consistency. For example, it can help apply uniformed criteria in recruitment or performance management processes, reducing the risk of decisions being influenced by personal bias. In a competitive market, this can support growth without the need to immediately increase headcount.
From an employment law perspective, risks mainly arise where AI influences decisions about individuals.
A key issue is discrimination. AI systems are often trained on historical data, which may reflect existing bias. If AI is used in areas such as recruitment or performance management, this can result in unfair outcomes for certain groups. Employers remain legally responsible for any discriminatory impact under the Equality Act 2010, even if it is unintended.
The use of such data also engages data protection obligations under the UK GDPR and the Data Protection Act 2018. Employers must ensure that any use of AI is lawful, fair and transparent, and limited to what is necessary for a clearly defined purpose.
Transparency is a further challenge. AI-driven decisions can be difficult to explain, which may create problems where employers need to justify decisions in processes such as grievances, disciplinary action or dismissal.
Employers must ensure that any dismissal is based on a fair reason and a reasonable procedure. Relying on AI-generated outputs without being able to explain how the decision was reached is likely to increase legal risk.
Additional issues arise where decisions are made solely by AI. In these cases, individuals may have specific rights, including the right to challenge those decisions.
Finally, the impact on employee trust should not be overlooked. A lack of clarity about how AI is used, particularly in monitoring or decision-making can lead to concerns, grievances and disengagement.
A practical approach
AI should be treated as a support tool, not a decision-maker. Maintaining human oversight, being clear about how AI is used, and implementing appropriate internal policies are all essential.
Used thoughtfully, AI can deliver significant benefits. However, as its role in workplace decision-making increases, businesses must ensure that legal risks are carefully managed.
Please contact Sally Togher to discuss how the Employment Team at Raworths could support your business on sally.togher@raworths.co.uk
Published 22 June 2026
Raworths sponsors Yorkshire Business Insider’s Top 100 OMB rankings in June 2026’s edition of the publication.
The information and any commentary contained in this briefing is for general information purposes only and does not constitute legal or any other type of professional advice.
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