Bardal meets AI: Navigating challenges of wrongful dismissal in transforming job market

By Samantha Kompa

Law360 Canada (May 8, 2023, 11:43 AM EDT) --
Samantha Kompa
There’s been considerable discussion among lawyers about the impact of artificial intelligence (AI) on the legal profession. A quick LinkedIn visit will reveal lawyers talking about how to effectively use prompts (specifically for ChatGPT), adapt to new technologies and avoid falling behind in this rapidly evolving landscape.

These conversations are valuable. In fact, fostering ongoing, interdisciplinary and open dialogue on the subject is crucial given our limited knowledge of AI and the vast amount of information yet to be discovered.

While I empathize with the desire to explore the impacts on our own profession – it’s only human – I also believe it’s essential for us to think about how these technological advancements will impact our clients, and how we should be advocating for them in this new era.

I personally operate from a place of uncertainty when it comes to AI, especially as it relates to employment. Sam Altman himself, CEO of OpenAI the company behind ChatGPT, said “[AI] is going to eliminate a lot of current jobs, that’s true. We can make much better ones.”

Focusing on that potential loss of jobs, in this article, we’ll discuss the need for adaptation in the legal profession, specifically with respect to the Bardal factor “the availability of similar employment” in the case of wrongful dismissal.

AI, labour market

As an employment lawyer, I’ve been pondering the impact of AI on workers and the labour market. Is AI receiving the appropriate attention from governments and corporations? Will the law move fast enough as technology evolves?

There is a very real possibility that AI will change the labour market as we know it. Similar to previous seismic shifts, such as automation in manufacturing, but more far-reaching across industries and disciplines. Productivity could soar for companies adopting AI. What once was achieved with 10 people could shrink down to one, reducing headcount costs and increasing profits. At the very least, AI will change the nature of many roles and their responsibilities, and at the most, create redundancies that will result in massive dismissals and layoffs.

Employment lawyers will need to be creative in advocating for their clients because, if AI redundancies do occur, terminated employees’ job searches will be hampered by a narrowing job market for traditional roles and skills.

In this new era, lawyers will need to advocate for longer notice periods for employees and educate the courts about the challenges employees are likely to face when trying to find “similar employment.”

Wrongful dismissal, Bardal factors

Wrongful dismissal occurs when an employer terminates an employee’s contract without proper notice. In Canada, courts use a series of factors known as the Bardal factors to determine proper notice in each case (Bardal v. Globe & Mail Ltd. [1960) O.J. No. 149. These factors include the employee’s age, length of service, position and availability of similar employment.

The “availability of similar employment” factor will no doubt be the subject of vigorous debate in the courts as industries and employers incorporate and rely on AI. For anyone terminated from a position that has become redundant or scarce due to AI, there’ll likely be fewer available employment opportunities in comparable positions, as AI will likely have an impact on the discipline itself and across industries.

Imagine a marketing professional with over 15 years of experience who is terminated as their company adopts AI-driven marketing tools. With the job market shifting towards AI expertise, the court might need to consider the time and resources required for a terminated employee to acquire new skills in order to remain competitive in the field.

Evaluating availability of similar employment in era of AI

Lawyers will need to increase their focus on educating the courts on the following factors when evaluating the availability of similar employment:

1. Job market transformation: AI and automation could lead to the disappearance of some traditional jobs, the creation of new roles and the transformation of existing ones. Courts will need to assess the employee’s ability to adapt to these changes when determining the notice period.

2. Skills and retraining: The era of AI may require employees to acquire new skills or undergo retraining to remain competitive in the job market. Courts could consider the time and resources needed for such retraining when determining the proper notice period.

3. Industry-specific impact: AI’s impact on job availability will vary across industries. Courts may need to consider the specific challenges and opportunities in the employee’s industry when evaluating the availability of similar employment.

4. Geographic considerations: AI-driven changes in the job market may be uneven across different geographic areas. Courts may need to assess whether the employee would need to relocate to find similar employment and factor this into the notice period calculation.

 5. Transition support: In some cases, employers may offer transition support, such as outplacement services or retraining programs, to help employees find new employment. Courts could take such support into account when assessing the availability of similar employment.

To effectively represent clients in wrongful dismissal cases in the era of AI, lawyers must familiarize themselves with the ways AI is impacting their clients’ industries. We will need to consider the unique challenges and opportunities presented by AI, as well as the employee’s capacity to adapt to a rapidly evolving employment landscape. Lawyers should be prepared to present evidence of the difficulties clients might face when pivoting at various career stages into new roles, industries or sectors.

Courts have repeatedly recognized that depressed economic conditions, which make a new position more difficult to find, are relevant when determining the length of notice given to employees. The difference here is that much like the automation of manufacturing, it might be difficult to recognize depressed economic conditions. Production goes up while employment goes down, leading to a positive economic environment in the aggregate, but negative at the employee level. In other words, notice shouldn’t necessarily be dependent on economic conditions, recessions, etc. but should also consider the impact of AI on a given industry or position.

Adapting our approach: Beyond Bardal factors

The integration of AI in the workplace also invites us to question the applicability of the Bardal factors and whether other areas of law can better inform our approach to AI/employment issues. In particular, if increased terminations result from AI-driven redundancies, should we maintain our focus on awarding proper notice? Should we continue to ask courts to assess how long it should take someone to find new work based on the Bardal factors?

Alternatively, we could adopt an approach more prevalent in human rights jurisprudence, which is to determine the actual time it took someone to find new work and award lost wages for that period.

If AI substantially disrupts the labour market, accurately predicting how long it will take an employee to find new work or determining the proper notice may prove challenging for some time. Consequently, a better approach might be to award lost wages until an employee finds new, comparable compensation (which may not be a comparable position due to AI).

This approach would protect employees who lose their jobs because of AI replacements by providing time to learn new skills, train in new roles and pivot their experience.

Protecting workers, regulating AI

As a society, we must remain aware of the potential risks of human worker displacement. The widespread adoption of AI and automation carries ethical, social and economic implications. Focusing solely on the labour market, swift and strategic thinking from regulators is needed to establish boundaries for employer AI usage, to determine how AI should work with and for people, and when it should be allowed to replace human workers. Moreover, if or when AI does replace human workers, regulations must ensure that those affected are adequately cared for. If we, as a society, choose to embrace AI, we must also commit to supporting those caught in the transition.

Samantha Kompa is a lawyer and founder of Kompa Law, a boutique employment and human rights firm based in Belleville and serving clients throughout Ontario.

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