Lawyers weigh in on risks of constructive dismissal, performance management challenges
Shopify made headlines last week after an internal memo from the CEO and founder Tobi Lütke mandated the use of artificial intelligence (AI) for all employees.
In the letter published on Twitter, he stated that “AI effectively is now a fundamental expectation of everyone at Shopify,” and all employees would be questioned about it in performance reviews.
He also stated that teams requesting more “headcount” or resources, would have to prove why they could not use AI tools to help with their work.
The memo indicates a broader trend of AI and its use by workers.
“[Shopify] is just a step ahead in terms of really emphasizing to employees 'This is part of how you're going to be evaluated,’” says Marnie Baizely, an employment lawyer from Spring Law.
Is it constructive dismissal?
Aaron Zaltzman, an employment lawyer at Whitten Lubin, says Lutke’s memo raises red flags.
“You introduce a new requirement for someone's employment, it can automatically be seen as a change to their employment agreement,” he says.
If a new requirement doesn’t act like a tool but adds to employees jobs and changes the function of their work, he says, employees could have grounds for constructive dismissal.
According to the Canada’s Labour Code, constructive dismissal occurs when an employer changes an employee’s job or working conditions without consent, such as changes to role, salary, or creating a hostile environment that forces resignation.
“I think that some [employees] were to simply say, ‘I don't really agree to this. I don’t really want to integrate AI fully into my employment,’ could have a case for a constructive dismissal, which could be treated like a termination without cause,” Zaltzman explains. “It's essentially introducing a new measure as a requirement that could seriously impact people's work.”
Give notice on AI priorities
However, Baizely said the use of AI tools can just be like another range of technologies that employees might need to use for jobs and most likely does not create a “fundamental change” to work.
But if any fundamental change is going to occur to the job because of these tools, she says, “employees need to be given reasonable notice of that change” to avoid any compliance risks.
For employers to stay ahead and combat employee resistance to the use of AI in work or in performance reviews, notice should be given beforehand, Baizely explains.
“I think having [AI] in job descriptions and job postings so that candidates understand that this is a requirement of the role, and existing employees understand that, on a go-forward basis, they're going to be evaluated on their AI use," she says
Encourage use of AI, say lawyers
Lütke wrote that he does not think it's “feasible” for employees “to opt out of learning the skill of applying AI.” He said employees were “welcome to try” but he could not see that working out in the future.
While many have interpreted this as a threat, Baizely sees the message as an encouragement for employees to embrace AI tools.
“I can't see an employer disciplining an employee specifically for their lack of AI for failing to use AI tools,” she says.
“What I can see is, in a performance review meeting, an employee being asked or it being called out that they're not making use of these tools that have been identified as beneficial to their particular role, and their performance would be assessed on that basis.”
Baizely stresses that employers or managers should avoid disciplining employees for integration of AI into their work.
“Disciplining employees for failing to use something, I think that can impact morale and just set a more negative tone for employees,” she adds.
Zaltzman shares a similar view, saying employers should not mandate AI usage but focus on how the tool is productive for employees
“My focus would be more on things like how to use AI so that there's no issues with confidentiality, no issues with copyrights,” Zaltzman says.He says Lutke memo on AI raises a bit of red flags.
You introduce a new requirement for someone's employment, it can automatically be seen as a change to their employment agreement,” he says.
If a new requirement doesn’t act like a tool but adds to employees jobs and changes the function of their work, he says, employees could have grounds for constructive dismissal.
The use of AI tools can just be like another range of technologies that employees might need to use for jobs and most likely does not create a “fundamental change” to work says Baizely.
However, if any fundamental change is going to occur to the job because of these tools, she says, “employees need to be given reasonable notice of that change” to avoid any compliance risks.
AI policy to mitigate risk
To monitor the usage of AI for performance, Baizely says employers should create a policy with the approved AI tools and resources employees can use to minimize risk. It's really a “two-fold” process, she explains: Employers need to assess the potential risk of the tool and whether the tools are beneficial for the teams.
According to a Cisco report published this year, nearly half of security and privacy professionals have admitted to entering employees' information into generative AI tools, highlighting privacy risks.
Training employees on these tools is important to stay in compliance, Baizely says.
“[Employees] need to be trained on anonymizing data in the prompts and ensuring that they are aware of potential biases, discrimination, and privacy breaches when they're using these tools."
