Ontario Municipal Human Resources Association

Artificial intelligence (“AI”) is transforming nearly every stage of the employment relationship, from recruitment and hiring to employee training and ongoing upskilling. While AI offers significant efficiencies, it also introduces legal, ethical, and practical risks that employers must carefully manage.

AI During Recruitment

Ontario has taken an initial step toward regulating AI in employment. Under the Employment Standards Act, 2000 (“ESA”), employers are now required to disclose when AI is used to screen, assess, or select applicants during recruitment. This disclosure requirement, however, does not address how AI hiring tools must operate or what measures employers must take to identify and reduce bias. Employers must therefore rely on existing human rights principles and internal anti-discrimination policies when implementing AI-assisted recruitment. They should also seek assurances from AI vendors that their systems have been designed, tested, and regularly monitored to minimize discriminatory outcomes.

Human rights legislation prohibits discrimination on protected grounds throughout every stage of the employment relationship, including recruitment. Employers cannot avoid liability simply because an AI system influenced a hiring decision. If an AI tool produces discriminatory results, responsibility ultimately remains with the employer.

Discrimination may occur even where all applicants are treated the same. A seemingly neutral process can still disproportionately disadvantage individuals because of protected characteristics such as disability, age, race, sex, or family status. To establish discrimination, there must be a connection between the adverse treatment and a protected ground under applicable human rights legislation.

When evaluating whether discrimination has occurred, employers should consider the following questions:

1. Does the individual possess a characteristic protected under human rights legislation?
2. Were they treated differently than others?
3. If everyone was treated the same, did the process nevertheless have a different or adverse impact because of a protected characteristic?
4. Did the treatment result in a disadvantage or other negative consequence?
5. Is there evidence linking that adverse impact to the protected characteristic?

To reduce the risk of discrimination claims, employers should avoid relying exclusively on AI when making hiring decisions. Human oversight remains essential. Decision-makers should independently review AI-generated recommendations and be prepared to justify hiring decisions using objective, job-related criteria rather than simply accepting an algorithm’s conclusions.

AI and Constructive Dismissal

The legal considerations surrounding AI do not end once an employee is hired. As organizations increasingly integrate generative AI into workplace operations, employee roles may evolve rapidly. Generative AI uses algorithms and existing data to create original content—including text, images, audio, and synthetic data—that closely resembles human-created work. While these tools can improve efficiency, they may (inadvertently) also fundamentally alter an employee’s duties and responsibilities.

Constructive dismissal occurs where an employer unilaterally makes a substantial change to a fundamental term or condition of employment, including compensation, hours of work, or core job responsibilities. If AI significantly changes or reduces an employee’s duties without their agreement, employees may allege that they have been constructively dismissed.

Employees will not all respond to AI in the same way. Some may embrace new technology, while others may believe AI has fundamentally altered the nature of their role or diminished the value of their work. Employers should communicate openly about how AI will be used and emphasize that the technology is intended to support employees rather than replace them wherever possible.

Employment agreements should also be carefully drafted to provide reasonable flexibility to modify duties and responsibilities as operational needs evolve. Although such provisions will not eliminate every constructive dismissal claim, they may help reduce legal risk where workplace changes are implemented reasonably and in good faith.

As AI continues to reshape the workplace, employers should remain mindful of the psychological impact these changes may have on employees. Clear communication, meaningful training, and ongoing support can reduce uncertainty and foster confidence in new technologies. Demonstrating that AI is being implemented to enhance existing responsibilities—not fundamentally replace them—may lessen employee concerns and reduce the likelihood of legal claims.

Municipalities that take this proactive approach will be best positioned to navigate complexity, support their workforce, and sustain a proactive and transparent workplace in an evolving technological environment.

Written by: Sarah White Zubas Flett Liberatore Law LLP