Artificial intelligence is rapidly transforming recruitment across the logistics sector, with a third of UK companies expecting productivity gains. However, widespread adoption creates significant operational, ethical and legal risks that many warehouse operators are unprepared for.
For businesses facing chronic staff shortages and high attrition, AI appears compelling. It can process hundreds of applications for picker, packer and forklift roles, automate screening and match applicants during peak periods. AI-powered platforms screen CVs, schedule interviews and generate candidate reports in a fraction of traditional timeframes, with some companies using AI bots to conduct preliminary interviews entirely virtually.
Yet poorly managed systems can perpetuate discrimination, breach data protection laws, and expose businesses to unfair dismissal claims.
The discrimination risk is real
Algorithms trained on biased data sets can perpetuate or amplify discriminatory outcomes, presenting particular concerns when recruiting from diverse local communities.
Amazon’s discontinued AI recruitment tool provides a cautionary example. Trained primarily on male CVs, it systematically discriminated against female applicants, demonstrating how AI can embed and magnify workplace inequalities.
Under the Equality Act 2010, employers must ensure recruitment practices do not produce discriminatory outcomes. AI tools that disadvantage protected groups may trigger claims under sections 13 or 19, with responsibility resting firmly with the employer, not the technology provider.
Data Protection compliance
The GDPR and Data Protection Act 2018 impose additional obligations. GDPR specifically protects applicants and employees from significant decisions made solely through automated processing.
Logistics businesses cannot rely entirely on AI for hiring decisions, performance assessments or dismissals. Meaningful human involvement is mandatory, though challenging when processing large application volumes weekly.
Data security presents another concern. Samsung banned staff from using generative AI after sensitive code was unintentionally uploaded into ChatGPT, potentially revealing secrets the engine might share in responses. Warehouse businesses must consider similar risks around operational data, client information and employee details being inadvertently exposed.
Practical steps for employers
Businesses incorporating AI tools should develop clear policies governing responsibilities and conduct. Policies should specify approved tools, permissible uses and prohibited activities such as uploading confidential data to public platforms. Governance structures for oversight are essential to reduce exposure to discrimination and data breach claims.
AI systems require regular audits to detect bias and ensure compliance with equality, data protection and employment laws. Training data must reflect diverse candidate pools across races, ethnicities, genders and educational backgrounds. Human monitoring of outputs is essential to verify alignment with business policies.
Most critically, human oversight must be embedded into every AI process, including regular reviews, clear accountability and comprehensive training for HR and operations managers. The law requires significant decisions affecting individuals to remain in human hands, even when facing pressure to fill urgent vacancies rapidly.
Effective oversight, regular audits and clear governance are non-negotiable. Delegating decision-making entirely to AI creates substantial legal and reputational exposure. As courts increasingly scrutinise AI-related failures, operators must ensure efficiency gains do not compromise legal compliance and fair treatment of employees.
Steph Marsh is an Employment Law specialist and Head of the Employment team at Coodes Solicitors. She acts for both employers and employees in contentious and non-contentious matters, with extensive experience, advising clients on discrimination issues, redundancy situations and staff management.
Coodes Solicitors is a leading regional law firm with offices in Boscastle, Falmouth, Holsworthy, Launceston, Liskeard, Newquay, Penzance, St Austell and Truro. It offers a full range of legal services, including corporate law, commercial law, litigation and dispute resolution, employment law, commercial property law, family law, contentious probate, medical negligence and private client matters.
Comments are closed.