The use of AI in workplaces across Canada is increasing. Businesses are implementing advanced AI technologies that they then use for tasks such as employee monitoring and job performance assessments. Currently, businesses are increasingly using AI as a recruitment and hiring tool. These AI tools objectively boost efficiency; however, they bring up privacy and fairness issues, especially for organizations’ employees.

The use of AI in hiring practices

Businesses may find the following benefits to using AI as a recruitment and hiring tool:

• Faster candidate screening: AI can sift through large volumes of resumes extremely fast. Machine-learning models can quickly match skills, experience, and education to job requirements, slashing hiring cycles from weeks to days.
• Bias-neutral job postings: AI-powered tools can analyze language in job ads to spot phrases that may discourage certain groups from applying. By refining or rephrasing these postings, companies can improve diversity in their applicant pools.
• Enhanced candidate experience: Chatbots and automated emails can give real-time updates to applicants, improving transparency and overall satisfaction.

Legal and ethical risks when using AI in the hiring process

Not all AI systems offer clear explanations for their decisions. If a hiring manager can’t explain why an algorithm rejected a candidate, the organization may face scrutiny under Canadian laws like provincial Human Rights Acts. Accountability remains with humans, so HR teams must understand the underlying logic of their AI tools.

Data privacy and compliance

In Canada, the Personal Information Protection and Electronic Documents Act (PIPEDA) sets out privacy obligations for businesses, including those using AI, particularly around consent regarding the collection, storage, and use of personal information.  These obligations apply to the use of AI in collecting and using data in all workplace situations. For example, when organizations use AI-based hiring tools, they must ensure they only gather the data necessary for recruitment—and they must secure it appropriately.

Some provinces have enacted their versions of PIPEDA, whereas others have not, usually because their employment statutes already address AI-related employee concerns regarding the protection and fair treatment of personal employee information.

The Government of Canada’s Directive on Automated Decision-Making outlines the principles of transparency, accountability, legality, and procedural fairness when using AI as a tool for recruitment in the workplace. Requirements include Algorithmic Impact Assessments for higher-risk decisions. Furthermore, the directive stresses that ultimate responsibility for hiring lies with hiring managers, not algorithms. This principle means HR professionals must review AI-generated findings, question suspicious results, and be prepared to justify final hiring decisions.

Responsibilities of organizations when using AI

To ensure that the use of AI in the workplace remains ethical and transparent and adheres to privacy laws, organizations must follow a number of guidelines and build a strong framework that includes:

• bias checks,
• clear accountability measures, and
• ongoing regulatory awareness.

Regular AI audits and transparency

When using AI as a hiring tool, routine audits can reveal if the AI tool exhibits bias toward or against specific groups. If an audit shows a pattern of disproportionately rejecting certain demographic segments, employers must adjust the system or introduce human checks. Candidates also have the right to know if AI plays a role in their assessment, and HR teams should be ready to explain how the system arrived at its conclusions.

Candidate notification and the need for human oversight

Under PIPEDA, candidates and current employees must understand how their data is being used, especially if AI is involved. Companies should give job candidates the option to request a human review of any AI-driven rejection.

Get legal help

The laws regarding the use of AI in the workplace are in their infancy and are constantly evolving. AI can be used effectively and ethically with the right policies and oversight.

For legal help and assistance, contact Roberts & Obradovic Law, a Toronto-based firm specializing in employment and privacy law. Roberts & Obradovic Law assists businesses in navigating the complexities of AI integration in recruitment, ensuring compliance with evolving regulations and promoting ethical hiring practices.

								
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