In January this year, a Japanese insurance company announced plans to replace 34 employees with robots. Automation is likely to affect labour markets worldwide and the reality is drawing nearer; RBS and NatWest announced in 2016 that they will be using a virtual chatbot to deal with UK customer queries and several US hospitals are already using artificial intelligence (AI) platforms for treatment advice.
In the short term, automation will lead to business restructurings (moving humans to functions that robots cannot fulfil) and redundancies. Health and safety concerns about robots or automated systems failing could lead to industrial action. 
Employers will need to consider negative PR caused by redundancies and fears of the consequences if AI goes wrong.
AI is likely to depress wages for lower-skilled work and individuals may retrain in areas where robots cannot replace humans. Traditional office jobs will decline and the gig economy, where individuals supplying services are matched with market demand, will continue to develop apace. As a result, and following Employment Tribunal rulings that Uber drivers and a CitySprint courier are workers in October 2016 and January 2017 respectively, we are likely to see more litigation on worker status and organisations should consider this when reviewing their business models.
Employers will also need to think about whether their policies and procedures are suitable for a mixed workforce of humans and robots. For example, a chatbot developed by Microsoft was removed from Twitter after learning and tweeting racist remarks; so employers may have to deal with grievances and employee engagement issues. If data regarding job applicants’ facial expressions and body language is captured by robots during recruitment processes, employers will also need to consider data protection and discrimination issues concerning the storage and use of this information.
Last year, the European Parliament proposed a motion for robot workers to be classed as ‘electronic persons’; although this seems improbable, in January, its legal affairs committee passed a report outlining a robotics regulation framework (proposing reporting requirements, mandatory insurance schemes and a general basic income to counter the damage that robotics could wreak on employment markets) and we may see employment law adapting to accommodate AI in the workplace in future.
Kate Hurn is associate at law firm Bird and Bird, and Penny Hunt is legal director at Bird and Bird