On 12 June 2025, the European Parliament's Committee on Employment and Social Affairs (EMPL) published a draft report calling for a legislative proposal to regulate the use of digitalisation, artificial intelligence (AI), and algorithmic management in the workplace. The report urges the European Commission to act under Article 225 of the Treaty of the Functioning of the European Union (TFEU) to ensure that workers' rights are protected in the face of rapidly evolving technologies.
This initiative is a direct response to the growing deployment of AI and algorithmic systems in employment contexts - from hiring and performance monitoring to task allocation and dismissal decisions. The report aims to fill perceived regulatory gaps left by the EU AI Act and the Platform Workers Directive, particularly in traditional employment settings.
Why This Report, and Why Now?
The report stems from increasing concern over the use of AI in recruitment, performance monitoring, productivity tracking, and algorithmic decision-making. The EU Parliament is responding to:
- The proliferation of opaque AI systems in HR and workplace management,
- The risk of discrimination, surveillance, and erosion of workers' rights; and
- The need to align AI deployment with fundamental rights, including data protection, non-discrimination, and collective bargaining.
It also reflects a broader EU policy trend of ensuring that digital transformation does not come at the expense of social rights.
Key Recommendations of the Report
The report calls for a comprehensive framework to govern AI in the workplace, including:
- Human Oversight and Transparency
Employers should ensure that AI systems are explainable, auditable, and subject to meaningful human oversight—particularly where decisions affect hiring, promotion, or dismissal. - Worker Participation and Consultation
Workers and their representatives should be involved in the deployment of AI systems, with rights to information and consultation under EU labour law. - Right to Explanation and Contestation
Employees should have the right to understand how AI systems make decisions and to challenge outcomes that significantly affect them. - Data Minimisation and Purpose Limitation
AI systems should only process data strictly necessary for employment purposes, in line with the GDPR's principles. - Ban on Certain Uses
The report suggests banning AI systems that manipulate human behaviour, use emotion recognition for decision-making, or engage in intrusive surveillance. - Algorithmic Impact Assessments
Employers should conduct risk assessments before deploying AI, including assessments of potential bias, discrimination, and privacy risks. - Enforcement and Redress
The report calls for stronger enforcement mechanisms and access to remedies for workers affected by harmful AI practices.
Are These Recommendations Redundant?
From a data protection perspective, many of the report's recommendations are already addressed under existing EU legislation:
- GDPR provides robust protections, including rights to access, rectification, objection, and not to be subject to solely automated decisions with legal or similarly significant effects (Article 22).
- The EU AI Act, adopted in 2024, already classifies many workplace AI systems as "high-risk," subjecting them to strict requirements around transparency, human oversight, and risk management, as well as the provisions already in force prohibiting emotion inference in sensitive settings, i.e. education institutions and the workplace except if for safety reasons.
- The ePrivacy Directive, Charter of Fundamental Rights, and national labour laws also provide overlapping protections.
As such, the report may be seen as reiterating and reinforcing existing obligations rather than introducing novel legal requirements. However, it does underscore the need for sector-specific guidance and practical enforcement mechanisms, particularly in the employment context where power imbalances are acute.
The report is a draft resolution, meaning it is not legally binding. However, it is likely to influence:
- Future legislative proposals from the European Commission,
- Interpretation and enforcement of the AI Act and GDPR in employment contexts; and
- National-level initiatives to regulate workplace AI.
The EU Parliament is expected to vote on the resolution later in 2025. If adopted, it could pave the way for sector-specific codes of conduct, guidance from data protection authorities, or even amendments to existing labour directives.
Final Thoughts
It's not only the EU that has an interest in AI in the workplace and protecting employees' rights; in the UK, we've had DSIT's Responsible AI in Recruitment guidance and the ICO's audit outcomes report setting out recommendations for AI providers and developers of AI powered sourcing, screening and selection tools used in the recruitment process, along with six key questions "organisations should ask when procuring AI tools to help with their employee recruitment". For more on the ICO's recommendations and key questions, see our article here. There is also the ICO's recently announced AI and biometrics strategy, with one area of focus being AI and automated decision making in the recruitment context.
It is clear that the spotlight is shining on AI in the workplace both in the UK and the EU, as well as further afield, where we have long-standing state legislation in New York and Illinois, as well as more recent governmental and regulatory scrutiny in Australia, Singapore and South Korea.
For in-house counsel and privacy professionals, this report and global interest in this area is a timely reminder to:
- Review AI systems used in HR and workplace management;
- Ensure compliance with the UK GDPR, the EU AI Act, and labour law obligations; and
- Engage proactively with workers and regulators on AI governance.
While the report may not introduce new legal obligations, it reflects a growing consensus: AI in the workplace must be human-centric, transparent, and rights-respecting.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
