In our February 2024 legal blog, the CIPD explores the people profession’s legal obligations around AI, the increased fines and risk associated with employing an illegal worker (even unwittingly) and the upcoming Statutory Rates changes for 2024/2025... 

Everyone is talking about AI... 

If you’re confused over how, and what, the impact of AI is going to be on day-to-day life, then you are not alone. A YouGov survey in late 2023 showed that nearly half of the 2,067 respondents did not feel they had a good grasp of impending impact of AI technology.  

The potential benefits and pitfalls of AI technology are almost limitless. As people professionals, establishing systems to capture AI use in your organisation, as well as training and processes around their use, are at the foremost of concerns for 2024.  

Whilst the ethical guidance on the matter is clear, what are the legal obligations that you are subject to in the UK? Here’s a short, sharp, update: 

• There is currently no specific AI law in the UK, however AI obligations are captured under data protection rules, consumer rights, equality laws, product safety and the regulation of financial and medical services. Such claims can be costly.  
• In January 2024 the UK Government published generative AI guidance for the civil service. While this is not statutory, it may be seen as a potential template for future legislation.  
• In the EU AI law is coming. The EU AI Law will apply to developers, deployers and users who operate in, or from, an EU market. Drafts of the EU AI Act start to make clear what the links between the people profession and AI systems will be: 

• When the people profession uses AI systems for the likes of recruitment, or for decision-making in the employment lifecycle, these systems may be categorised as ‘high risk’. This risk level means that both the developers, deployers and users of these tools must have robust risk management systems, data governance and transparency obligations in place. The key focus of all this safeguarding is transparency. 
• While the developer is the main party who will be subject to the EU AI Act, the deployers and users may be penalised under the legislation. The Act is expected to bring potential fines of 30million euros or 7% of global turnover, for the worst breaches. 
• Users must take note that there is a potential for ambiguity about who is the developer and the user in the instance where the user is modifying the product.  
• The act also looks to introduce a complete ban on emotion recognition tools in the workplace.  

The CIPD provide dedicated guides, reports and resources on the use of AI in the workplace.  

No more concessions for the unwittingly employment of an illegal worker 

As part of UK Government measures to reduce net migration, fines for illegally employing a worker have tripled from £15,000 for a first offence to £45,000. The maximum fine for repeat offences has jumped from £20,000 per illegal worker to £60,000. 

There’s more...not only have the fees increased but there is no longer any concession for late applications under the EU Settlement Scheme (for EEA nationals or non-EEA national family members who were employed before 30 June 2021). In practical terms this means that if workers employed from this date have no legal right to work, the employer will now need to act. Actions may include fines, terminations of employment and certain obligations to contact the Home Office.  

For all employers it is also worth noting that the legal obligation for proper right-to-work checks transfers under TUPE.  

In accordance with the increased fines and legal obligations, the UK Government updated its Guide to Right to Work checks.  

What’s changed in Fire and Rehire guidance? 

February 2024 has seen the publication of the first statutory Code of Practice relating to Dismissal and Re-engagement...or ‘fire and rehire’. Subject to parliamentary approval, the Code will come into effect in 2024 across England, Wales and Scotland.  

For some, the Code has been named a ‘baby step’. Regardless of views on the matter, there are elements that people professionals should be aware: 

• The Code specifies that employers must share information about their proposals openly with the workforce (and be prepared to demonstrate that they have done this). Consultations should not be viewed as one-off events.  
• The Code stipulates the detail of what information should be provided to employees.  
• Employers must be clear about the prospect of ‘fire and rehire’, if it is likely. A threat of dismissal should not be used as a negotiating tactic to pressurise employees. 
• Under the Code, an employer must contact Acas before raising the prospect of dismissal and reengagement.  

The CIPD provide a guide to understand the ‘fire and rehire process’.  

Upcoming Statutory Rates changes 

Certain statutory rates will change from 6 April 2024. Currently, proposed rates for the 2024-2025 period have been suggested for the National Minimum and National Living Wage, Statutory Sick Pay and Statutory Maternity, Paternity, Adoption and Shared Parental Leave.  

You can keep track of Statutory Rates changes and tribunal fees here.