Employment Rights Bill

Report (3rd Day)

Amendment 111ZA

111ZA: After Clause 34, insert the following new Clause— “Workplace AI risk and impact assessments(1) Before implementing or developing an AI system which may have significant risks or impacts on employment rights and conditions in the workplace, an employer must conduct a workplace AI risk and impact assessment (a “WAIRIA”)(2) A WAIRIA must be conducted under this section if there is a potential significant risk or impact on—(a) the identification or exercise of rights;(b) recruitment;(c) work access or allocation;(d) remuneration or benefits;(e) contractual status, terms or conditions;(f) mental, physical or psychosocial health.(3) A WAIRIA conducted under subsection (1) must—(a) document the intended purpose and functionality of the AI system;(b) establish a process for undertaking the monitoring of significant risks and impacts; (c) document the definitions, metrics and methods selected for the WAIRIA;(4) Employers must review and update the WAIRIA—(a) at least once every 12 months,(b) whenever substantial changes are made to the AI system to which it relates, or(c) when evidence emerges of unforeseen significant risks or impacts.(5) The Secretary of State must require any Fair Work Agency to issue guidance on the conduct disclosure and enforcement of WAIRIAs within 6 months of this section coming into force.”

My Lords, Amendment 111ZA seeks to introduce a requirement for workplace AI risk and impact assessments. This amendment is focused on addressing the profound and rapidly evolving impact of artificial intelligence systems on the modern workplace. There are many opportunities for its adoption but also risks and impacts. There is potentially massive job displacement. AI could displace 1 million to 3 million UK jobs overall. There are workplaces skills gaps; more than half the UK workforce lacks essential digital skills and the majority of the public has no AI education or training.

AI recruitment algorithms have resulted in race and sex discrimination. There are legal vulnerabilities. Companies risk facing costly lawsuits and settlements when unsuccessful job applicants claim unlawful discrimination by AI hiring systems. Meanwhile, AI adoption accelerates rapidly, and the UK’s regulatory framework is lagging behind.

Organisations such as the Trades Union Congress and the Institute for the Future of Work have consistently highlighted the critical need for robust regulation in this area. The TUC, through its artificial intelligence regulation and employment rights Bill, drafted with a multi-stakeholder task force, explicitly proposes workforce AI risk assessments and emphasises the need for worker consultation before AI systems are implemented. It also advocates for fundamental rights, such as a right to a human review for high-risk decisions. IFOW similarly calls for an accountability for algorithms Act that would mandate pre-emptive algorithmic impact assessments to identify and mitigate risks, ensuring greater transparency and accountability in the use of AI at work. Both organisations stress that existing frameworks are insufficient to protect workers from the potential harms of AI.

When I spoke to a similar amendment—Amendment 149—in Committee, the Minister acknowledged this and said:

My Lords, it is always a pleasure to follow my friend, the noble Lord, Lord Clement-Jones, who, in his single Nelsonian amendment, has covered a lot of the material in my more spread-out set of amendments. I support his Amendment 111ZA and will speak to my Amendments 168 to 176. I declare my interests in the register, particularly my technology interests, not least as a member of the advisory board of Endava plc and as a member of the technology and science advisory committee of the Crown Estate.

I will take one brief step backwards. From the outset, we have heard that the Government do not want to undertake cross-sector AI legislation and regulation. Rather, they want to take a domain-specific approach. That is fine; it is clearly the stated position, although it would not be my choice. But it is simultaneously interesting to ask how, if that choice is adopted, consistency across our economy and society is ensured so that, wherever an individual citizen comes up against AI, they can be assured of a consistent approach to the treatment of the challenges and opportunities of that AI. Similarly, what happens where there is no competent regulator or authority in that domain?

At the moment, largely, neither approach seems to be being adopted. Whenever I and colleagues have raised amendments around AI in what we might call domain-specific areas, such as the Product Regulation and Metrology Bill, the data Bill and now the Employment Rights Bill, we are told, “This is not the legislation for AI”. I ask the Minister for clarity as to whether, if a cross-sector approach to AI is not being taken, a domain-specific approach is, as opportunities are not being taken up when appropriate legislation comes before your Lordships’ House.

I turn to the amendments in my name. Amendment 168 goes to the very heart of the issue around employers’ use of AI. Very good, if not excellent, principles were set out in the then Government’s White Paper of 2023. I have transposed many of these into my Amendment 168. Would it not be beneficial to have these principles set in statute for the benefit of workers, in this instance, wherever they come across employers deploying AI in their workplace?

Would the Minister not agree that this makes the case for at least the consideration of a recruitment and employment-specific regulator to be brought about through this Bill? If not, I would certainly prefer to have a light-touch, cross-sector AI authority which would ensure that, wherever individuals, workers, employees and citizens come across AI, they can have clarity, certainty and consistency in its application. In this instance, it would be in the area of recruitment, but the AI authority—agile, light-touch and, crucially, horizontally focused—would ensure clarity, certainty and consistency across all sectors of employment, our economy and society.

I will touch briefly on Amendment 176 and the algorithmic allocation of work. Again, this is already happening, often without employees even being aware that that is the case. What is the Government’s position on the algorithmic allocation of work? If this amendment is not to be considered and adopted, what is the Government’s approach to how this is currently occurring in our economy to workers right now, often with an extremely discriminatory and detrimental impact on those workers?

AI has such potential to transform employment for the benefit of workers, employers, businesses and our economy. It has the potential, if it is human-led AI, to drive productivity in a way that no other element of our economy is currently likely to do. Similarly, if we do nothing and continue with this wait-and-see approach to legislation and regulation, it is most likely that workers may often find themselves at the sharp end of the algorithmic allocation of work, AI in the workplace taking their data and numerous other issues, unable to avail themselves of the benefits.

This situation could be wholly averted if some of these amendments were considered and incorporated into the Employment Rights Bill. Better still, the Government should reconsider bringing forward a cross-sector AI regulation Bill. What we know fundamentally is that regulation is right: right for workers, right for employees, and right for all aspects of our economy and society. When I say that regulation is right, I mean the right size regulation. What we know from history, not least from recent history, is that right-size regulation is good for innovation, investment, citizens, creativity and our country. Would the Government be good enough to agree?

My Lords, I am aware that many of the amendments in this group have a rather different focus from the points I wish to make. I acknowledge the amendments by the noble Lords, Lord Clement Jones and Lord Holmes of Richmond. I believe they provide a valuable opportunity to reflect on the particular nature of working in tech and AI. This is, as has already been alluded to, a sector that makes a significant and growing contribution to the UK economy, and it is rightly seen as one of the priority strands of the Government’s modern industrial strategy.

As the rather scary AI 2027 forecast by Daniel Kokotajlo and others makes clear, developments in this space are accelerating incredibly rapidly and are already reshaping how we live and work. Even as I say that, I wonder whether I may have triggered an algorithmic alert somewhere—let us hope that parliamentary privilege covers some of it. AI is happening, regardless of how we feel about it, and the opportunity it provides makes it all the more important that firms are based and regulated here rather than elsewhere.

Jobs in this area tend to be highly skilled and well paid, but that does not mean workers do not need some protections. In many cases, the things that matter most are not issues such as minimum wage and paid leave but how easily people can move between companies, start their own ventures and work across several fast-growing enterprises. Here, it is non-compete agreements which pose a particular challenge. Understandable concerns over safeguarding intellectual property have led some firms to restrict employee movement, yet this comes at a cost to innovation, competition and the free flow of ideas that underpin these industries. I know the last Government carried out a review of these clauses in general terms, but no meaningful reform followed. Does the department have a view on how widespread these clauses now are, particularly in fast-moving and competitive sectors? Has any formal assessment been made of their impact on innovation, start-up activity, and people’s ability to move freely and fairly between roles?

My Lords, I support the timely and vital amendments tabled by the noble Lords, Lord Clement-Jones and Lord Holmes of Richmond, concerning the use of artificial intelligence in the workplace. These amendments, which cover transparency, accountability, consent, fairness and the protection of workers’ rights, speak to one of the central challenges of our time: how we align the rapid deployment of AI with the rights, dignity and agency of working people.

Just 11 days ago, a few of us, including the noble Lord, Lord Clement-Jones, had the privilege of attending the round table on aligning AI for human flourishing, hosted here in the House of Lords by the noble Baroness, Lady Kidron, and convened by Oxford University’s Institute for Ethics in AI and the Accelerator Fellowship Programme. It was led by Professor Yuval Shany and brought together leading international voices, including Professor Alondra Nelson, who designed the US Blueprint for an AI Bill of Rights, later embedded in President Biden’s executive order on AI.

That discussion made one thing clear: we are at a crossroads. As Professor Nelson put it at a recent AI action summit in Paris:

“We can create systems that expand opportunity rather than consolidate power for the few”.

If we are serious about that aspiration, we need laws that embed it in practice. I hope we will soon see legislation introduced in this House—an AI Bill of Rights rooted in the UK context—that reflects our democratic values, legal traditions and the lived realities of British workers. That will require leadership from the Government and support across parties, and I believe this House is well placed to lead the way.

That is precisely what the amendments tabled by the noble Lord, Lord Holmes, seek to do. Amendment 168 outlines the core principles employers must uphold when using AI on workers: safety, fairness, transparency, governance, inclusion and the right to redress. These are the bedrock of responsible innovation. Amendment 169 proposes the appointment of designated AI officers within organisations, ensuring that someone is directly accountable for the ethical and unbiased use of these powerful technologies.

From these Benches, all I can say is that I echo those words. I hope that the Government have listened to the arguments about AI and will respond positively.

My Lords, I too congratulate my fellow solicitor, the noble Lord, Lord Clement-Jones, and my noble friend Lord Holmes of Richmond on their amendments.

We are following up on the exchanges that took place at Question Time earlier today, when the Minister—the noble Lord, Lord Vallance—offered to give us a reading list so that we could peruse the subject during the vacation, when he explained that, sadly, the Government are not yet able to produce their consultation paper. When the noble Baroness the Minister sums up this debate, can she identify for us what her noble friend had in mind? We are anxious to make sure that we are up to date on these very important subjects.

AI technologies are evolving at pace, touching every corner of the economy, from manufacturing and logistics to retail, healthcare and particularly—as my noble fellow lawyer knows—professional services. In the context of work, AI offers real potential: it can support productivity, streamline processes and free individuals from repetitive and burdensome tasks. It may also, if properly deployed, open up new opportunities for people who have historically faced barriers to employment.

However, as the noble Lord, Lord Freyberg, just reminded us, alongside that, there are real concerns. He instanced a number of them, and they are set out in Amendment 168; they are about fairness, transparency, accountability and, indeed, the role of human oversight in the decisions that affect people’s lives and livelihoods. It is therefore important that we take a balanced, thoughtful approach.

The noble Lord, Lord Pitkeathley of Camden Town, pointed out, quite rightly, that a number of non-compete agreements are now emerging. We have to be aware that these could so easily stifle innovation, and this must be all about encouraging and stimulating innovation. Therefore, it is very important that we take a balanced, thoughtful approach. But we should not allow technological change to outpace our frameworks for fairness, ethics and employment rights.