Checklist „Artificial intelligence“

Artificial Intelligence ("AI") is a very powerful technology that allows us to test, analyze, predict or decide in a very advanced way. It has become an indispensable part of everyday life. In particular, the wide range of applications, the accelerated innovations and the global interest, both political, economic and legal, show the importance of AI for our society.

AI is already being used in many industries. It could also soon become indispensable in labor and employment law. AI is not just something for start-ups but can be used in any corporate structures. Above all, the confusing legal situation resulting from the splitting of the standards to be observed into the various laws and the uncertain outlook for the coming European regulations give rise to a wide variety of challenges in terms of employment law.

I. Legal classification

  • There is currently no comprehensive uniform law on AI in Germany. However, it is addressed in various laws. For example, the German Works Council Modernization Act provides, among other things, for a strengthening of the rights of the works council in the use of AI. There are also provisions in other German laws, such as the Copyright Act (Urhebergesetz), the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz) or the Basic Law (Grundgesetz). Due to the large amount of data that forms the basis for AI, the General Data Protection Regulation (GDPR) also comes into play.

  • The first attempt at a uniform regulation was made by the European Commission in April 2021, based on the draft of the "Artificial Intelligence Act". The draft aims to create a uniform legal framework for the development, marketing and use of artificial intelligence. In the process, a risk class model is to be created that evaluates the potential danger of AI. The risk classes are based on minimal, low or high risk or are even absolutely prohibited. Depending on the risk class, different requirements are placed on AI. For example, AI systems with a high risk must undergo a conformity assessment before they can be put into operation on the EU market. If the requirements are not met, companies face a heavy penalty in the form of a fine.

  • It should be noted that the regulation applies to all providers who place AI systems on the EU market and to users of AI systems in the EU, regardless of where the company is based. Even if providers and users are based outside the EU, they will be subject to the EU draft if the result produced by the AI system is used in the EU.

  • However, progress on the legislation has been slow. The European Commission's proposals are now being processed by the Council of the European Union and the European Parliament. Once the draft is adopted, it would have to be transposed into the national law of the member states.

II. Excerpt; Possible areas of application in labor and employment law

AI is already widely used in labor and employment law. Especially as a tool for (supporting) personnel selection. But many other areas of application are also conceivable. An excerpt of the various possibilities:

  • Automated pre-selection of applicants based on the submitted application documents and answering of simple inquiries through the use of chatbots (e.g. as part of the application process).

  • Creation of duty rosters, assignment of tasks, suggestions for the composition of teams, forecasts of staffing requirements with regard to expected sick leave in the workforce

  • Automated handling of personnel issues, such as simple questions about payroll or vacation time

  • Performance analyses to prepare termination decisions. Currently, the (supportive) use of AI in the termination of employment relationships is not possible, in particular due to the written form of the termination declaration pursuant to Section 623 of the German Civil Code (BGB) and the explicit provision on automated decisions in Article 22 (1) of the GDPR.

III. What else to consider:

  • It remains to be seen what the European Commission's final draft will look like and how it will be implemented in German law.

  • In companies with a works council, the latter must be involved in the introduction of AI. The German Works Council Modernization Act (Betriebsrätemodernisierungsgesetz) must be observed, which states, among other things, that works councils can consult an AI expert when performing their duties. It is further clarified that the rights of the works council already exist during the planning of the use of AI.

  • Which regulations are right for the specific company must be decided individually. Particularly in view of the possible consequential problems and the prevention of high sanctions, it is advisable to obtain tailored advice even before the introduction of the AI system and the implementation of the EU draft.

Subscribe to our newsletter