Artificial intelligence (AI) is no longer a futuristic concept. It’s already transforming how businesses operate, especially in the fast-paced world of tech and creative Small and Medium-sized Enterprises (SMEs).
From streamlining recruitment to automating performance reviews, AI offers powerful tools to help businesses scale. But beneath the surface, it can also introduce legal risks that are easy to miss and costly to ignore.
As a Gather partner, Brabners plays a key role in supporting businesses to navigate these challenges. Here, Nick Campbell - Head of Employment, Pensions and Immigration at Brabners - outlines what businesses in the tech sector can do to protect their IP.
Recruitment Algorithms and Bias
Imagine using an AI platform to shortlist candidates based on keyword matching and behavioural profiling - at a glance, it sounds efficient.
However, one digital agency found that their tool disproportionately filtered out candidates from minority backgrounds due to biased training data. That’s a potential breach of the Equality Act 2010.
What you can do:
- Audit your recruitment tools regularly. By doing this, along with ensuring human oversight in final decisions, you are actively reducing the risk of algorithmic bias.
- Make sure your AI systems are trained on diverse datasets and reviewed for fairness, and document your audits to demonstrate compliance.
Monitoring Productivity with AI
A creative studio rolled out AI software to track employee activity - keystrokes, screen time and even tone of voice during client calls. While intended to boost productivity, it raised serious concerns about privacy and data protection under UK General Data Protection Regulation (GDPR).
What you can do:
- Be transparent with staff and conduct a Data Protection Impact Assessment (DPIA) before deploying monitoring tools.
- Ensure any data collected is appropriate, necessary and clearly justified.
AI in Disciplinary Decisions
One tech SME used AI to flag ‘underperformance’ based on delivery metrics. A developer was repeatedly flagged due to delays caused by others, resulting in a formal warning. The lack of human context risked breaching procedural fairness and employment contract terms.
What you can do:
- Use AI to support, not replace, human judgement in disciplinary matters.
- Always give the employee opportunity to explain their circumstances, and document how AI-generated insights are reviewed and contextualised by managers.
Freelancers and Employment Status
AI systems that allocate tasks based on availability and skillset can unintentionally mimic employment patterns. If freelancers are treated like employees (e.g. fixed hours, regular tasks), it could trigger employment rights and liabilities.
What you can do:
- Review working arrangements to ensure they reflect the intended legal status and clearly distinguish freelance roles from employment roles.
- Contracts must reflect the independent nature of the work, and employers should regularly review task allocation systems to prevent misclassification.
Preparing for Future Regulation
The UK government is actively exploring AI-specific regulation. One Liverpool-based tech start-up has already introduced an internal AI policy covering ethical use, accountability, and escalation procedures - showing that proactive governance is possible.
What you can do:
- Develop internal policies and training to future-proof your business and embed ethical principles into your AI strategy. This could include clear accountability structures, escalation routes for concerns and regular reviews of AI across departments.
- Cross functional collaboration is a must, involving legal, HR, IT and communications ensure your approach is robust, inclusive and adaptable to future regulatory changes.
Talk to Brabners
At Brabners, they understand the unique challenges faced by tech and creative SMEs. Their employment law specialists work with businesses like yours to harness the benefits of AI while staying compliant, ethical and protected. Whether you're scaling your team, deploying new tech, or simply want peace of mind, they're there to help.
Get in touch today to discuss how AI might impact your workforce, or to arrange a review of your policies and practices.