Navigating workplace displacement in the age of AI

As artificial intelligence (AI) technologies rapidly evolve, the UK workforce is facing significant structural changes. While AI offers remarkable opportunities for innovation and productivity, it also raises concerns about job displacement. For HR professionals and employers, understanding the legal responsibilities and ethical considerations surrounding these transitions is essential.

The growing impact of AI on jobs

AI is already reshaping roles across sectors, from manufacturing and logistics to professional services. Routine and administrative tasks are increasingly being automated, and even complex roles are being augmented or replaced by AI systems.

This technological shift necessitates a proactive approach to workforce planning and compliance with employment law.

Legal considerations for UK employers

Redundancy and dismissals

Under UK employment law, job displacement due to AI may lead to redundancies, which must be handled with care to avoid claims of unfair dismissal under the Employment Rights Act 1996. Employers must demonstrate:

• A genuine redundancy situation (e.g. a reduced need for human roles due to automation).
• A fair and transparent consultation process.
• Fair selection criteria.
• Consideration of suitable alternative employment within the organisation.

Collective consultation obligations also arise where 20 or more employees are affected within a 90-day period.

Equality and discrimination

AI deployment must be monitored to avoid indirect discrimination under the Equality Act 2010. For example, if automation disproportionately affects certain demographic groups, employers could face claims unless the measures can be objectively justified. Additionally, algorithmic bias in AI tools used for recruitment or performance management could introduce discriminatory outcomes. HR leaders must ensure transparency and conduct regular audits of such systems.

Data protection and employee monitoring

Where AI systems are used for monitoring performance or behaviour, employers must comply with the UK GDPR and Data Protection Act 2018. This includes conducting Data Protection Impact Assessments (DPIAs) and ensuring lawful bases for processing personal data.

Transparency and proportionality are key, excessive or covert monitoring can lead to legal risks and reputational damage.

Ethical and strategic HR approaches

Reskilling and redeployment

One of the most constructive responses to AI-induced displacement is upskilling or reskilling employees. Government initiatives like the Lifelong Loan Entitlement and Skills Bootcamps can be leveraged to support staff transitions.

HR teams should collaborate with learning and development functions to identify new roles for displaced employees, reducing the need for redundancies and improving morale.

Employee engagement and communication

Open, honest communication about AI initiatives is critical. Employees should understand:

• Why AI is being adopted.
• How it will impact their roles.
• What support will be available.

Early engagement builds trust and reduces resistance to change.

Reviewing policies and governance

HR policies should be updated to reflect the growing role of AI in the workplace. Considerations include:

• Algorithmic accountability frameworks.
• Ethics committees or review panels.
• Clear escalation procedures for employee concerns.

We’ve recently launched our AI Governance Toolkit, designed to support employers on their AI governance journey. The toolkit provides the essential documentation needed to enable the responsible, effective, and ethical use of AI in the workplace. It includes a combination of practical guidance, to help employers understand what is required, recommended, or optional, alongside customisable policies and maintainable records to support implementation and ongoing compliance.

Conclusion

AI is transforming the world of work at pace. For UK employers, the challenge is twofold: leveraging technology to stay competitive while upholding legal duties and fostering a responsible transition for employees.

By approaching AI adoption with a strong HR strategy and legal compliance lens, businesses can mitigate the risks of displacement and unlock long-term value, for both organisations and their people.