LATEST NEWS: Artificial Intelligence in the workplace: between technological innovation and legal limits

Artificial Intelligence (AI) is rapidly transforming the way companies recruit, evaluate and organise work. Tools capable of analysing CVs, predicting productivity levels or supporting management decisions are increasingly present in organisations' daily lives. However, this technological transformation also raises new legal issues. With the entry into force of the European Regulation on Artificial Intelligence (AI Act), companies are now operating within a more demanding regulatory framework, which seeks to balance technological innovation with the protection of fundamental rights.

The growing use of artificial intelligence in the labour context

Artificial Intelligence has been progressively integrated into the activities of organisations, taking on an important role in various business areas. Today, AI-based systems are used to analyse large volumes of data, automate repetitive tasks or support operational and strategic decisions.

In the context of labour relations, this evolution is particularly visible in areas such as recruitment, performance management, the organisation of schedules or the distribution of tasks. Some platforms make it possible, for example, to automatically filter applications, identify professional profiles compatible with certain jobs or analyse productivity patterns.

This phenomenon is often referred to as algorithmic work management, i.e. the use of algorithms or automated systems to support decisions related to work organisation and employee management. The growing adoption of these technologies has led the European institutions to recognise that the use of algorithmic systems in people management raises significant challenges in terms of transparency, data protection and labour rights.

The European framework: AI Act

It was in this context that the European Union approved Regulation (EU) 2024/1689, known as the AI Act, which establishes a comprehensive legal framework for the development and use of Artificial Intelligence systems. The regulation adopts a risk-based approach, classifying AI systems into different categories depending on the potential impact they may have on security, fundamental rights or people's lives: minimal risk, limited risk, high risk and unacceptable risk.

In the labour context, many systems used for recruitment, performance evaluation or decision-making regarding the employment relationship can be considered high risk systems, as they directly influence access to employment or working conditions. In these cases, the regulation imposes reinforced requirements, including risk management mechanisms, human supervision and adequate technical documentation.

Prohibited practices and limits for companies

In addition to these obligations, the AI Act also identifies certain AI practices considered unacceptable, which are prohibited and penalised in the European Union. These practices include, for example:

• Systems that use manipulative or subliminal techniques to influence people's behaviour;
• Systems that exploit vulnerabilities associated with age, disability or socio-economic status;
• Social classification mechanisms based on behaviour or personal characteristics;
• Systems that use biometric data to infer sensitive characteristics.

Transparency, human supervision and data protection

One of the central principles of the new regulatory framework is the need for companies to ensure transparency and human oversight when using AI systems.

Decisions relevant to employees - such as hiring, performance appraisals, contract renewals or disciplinary measures - should not be made exclusively by automated systems, and it is essential to guarantee the possibility of human intervention.

In addition, companies must inform workers when AI systems are used that influence working conditions or employment-related decision-making. In the Portuguese legal system, this requirement is already expressed in Article 106 of the Labour Code, which provides for the duty to inform workers about the parameters, criteria and rules used by algorithms or artificial intelligence systems that affect decisions regarding access to or maintenance of employment.

New compliance obligations for organisations

The European regulatory framework also implies a significant strengthening of technological and organisational compliance obligations on the part of companies.

Among the measures that may become necessary are:

• Mapping the AI systems used in the organisation;
• Assessing the level of risk associated with each system;
• Carrying out impact assessments on fundamental rights and data protection;
• Implementing internal policies for the responsible use of AI;
• Developing training programmes to promote digital literacy among employees.

Failure to comply with the obligations set out in the AI Act could result in significant penalties, with fines in some cases reaching 35 million euros or 7 per cent of the company's global annual turnover, depending on the nature of the offence.

There is no doubt that Artificial Intelligence has the potential to profoundly transform the way we work and how organisations make decisions. However, the growing use of these technologies also requires reflection on their limits and how they should be used in the labour context.

In a context where the use of algorithmic systems in labour management will continue to grow, the timely preparation of organisations will be essential to ensure not only compliance with the applicable legal framework, but also the trust of workers and society in the use of these technologies. Specialised legal support is particularly important in this area and is essential to help companies assess risks, implement appropriate compliance mechanisms and structure internal policies to ensure the responsible use of Artificial Intelligence.

Our Employment Law and Social Security team has the know-how and skills needed to support organisations in this process of adapting to the new regulatory framework.