The AI Workplace: French Court Rules on Works Councils’ Role in AI Tool Rollout

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Sam Sedaei: Hello, everyone. This is an episode of Ogletree’s The AI Workplace podcast, where we discuss the latest developments in the use of artificial intelligence in the workplace. My name is Sam Sedaei. I’m an attorney in the Chicago office of Ogletree Deakins. I am a member of the firm’s Technology Practice Group and Cybersecurity Practice Group. I advise employers on the use of technology and artificial intelligence in the workplace.
I am pleased to be joined by my colleague, Cécile Martin, who is the managing partner of Ogletree’s Paris office, and she is joining us today from Paris. She has extensive experience in issues relating to the management of senior executives, the implementation of compensation policies, and discrimination and harassment litigation. The former in-house counsel at the French Data Protection Agency, she’s also recognized in all aspects of data protection and compliance, particularly in the management of employees’ personal data, cyber surveillance, ethical alerts, and the implementation of new technologies. Cécile, welcome.

Cécile Martin: Thank you, Sam. Hello, everyone.

Sam Sedaei: So, Cécile, for the first time, a French court has ruled on the implementation of artificial intelligence or AI processes within a company. Can you briefly explain what this case was about?

Cécile Martin: Sure. It was about a company’s project to deploy a new computer application using artificial intelligence processes. The company wanted the AI tools to be tested by certain employees before deciding to deploy them to all the company’s employees, but there was considered that given the high number of employees testing the AI tools, it was not a testing phase, but that the company had finally deployed the AI tools without having consulted the Works Council prior to the deployment, and therefore, the Works Council decided to file an action against the company.

Sam Sedaei: Very interesting. Now, how was this company trying to use AI in their processes?

Cécile Martin: The company intended to test AI tools and had made them available to all employees reporting to the Chief Operating Officer and to all the employees of the Communication Department. As such, the question mark was whether the employer could validly claim that such an implementation of AI was experimental since so many employees had been trained and allowed to use AI tools without the Works Council being consulted beforehand.

Sam Sedaei: Now, for the benefit of those of our listeners who are listening from outside of Europe and many of our listeners who are listening from the United States who may not be familiar with the concept, can you explain what a Works Council is?

Cécile Martin: Of course. The Works Council is an employees’ representative body composed of employees elected by their peers, aiming at representing them vis-à-vis the employer. It is generally the major interlocutor of employers in France, and there are two sizes of work councils in France. The first size, I will call it the small Works Council, does not have too much prerogative for companies, and it’s only for companies having at least 11 employees. We have a second size of Works Council, which is called the big Works Council with a lot of prerogatives for companies with at least 50 employees. And the Works Council needs to be informed and consulted on various topics by the employer prior to implementing the project.

Sam Sedaei: It is certainly an interesting concept. So now employers are obligated to consult with the Works Council before making certain decisions. Can you explain and talk a little bit about what types of decisions normally require consultation with the Works Council?

Cécile Martin: For a company having a big Works Council, it is mandatory to consult with the Works Council before making any decision regarding, for instance, the way the company operates, which is a very broad concept. Therefore, it could be, for instance, having the necessity to consult the Works Council prior to implementing a project regarding a reorganization of a service, reduction in force, major acquisition, change affecting health and safety, working conditions, monitoring of employees, but also when you want to introduce new technology within the company.

Sam Sedaei: Very cool. Now I want to ask you a question about the powers that the Works Council may have. Can a Work Council stop a company from proceeding with a decision, or can the company proceed with its plans over the objections of the Works Council?

Cécile Martin: It depends on the case. The company needs first to determine whether the contemplated project requires prior consultation of the Works Council before deploying this project. Otherwise, the Works Council can decide to file a lawsuit against the company and require the suspension of the project as long as the consultation process is not over. And the Works Council may also decide to criminally sue the company and its legal representative because the consultation is not implemented.
It means, therefore, that if the project does not require a consultation of the Works Council, the employer can deploy it without issue. But if the project requires a consultation of the Works Council, the employer needs to loyally provide the Works Council with sufficient information about the project so that this letter can give its opinion about the project.
The consultation takes generally between one to two months, and if the Works Council has been provided with sufficient information during this process, the Works Council is considered as having rendered what we call a negative opinion at the end of the consultation timeframe. And such a negative opinion is not binding for the employer, who can decide to implement the project.
So, it means that at the end of the consultation project, generally, if all the information has been provided to the Works Council, this letter is going to render its opinion. It may be favorable or unfavorable, but it’s not binding to the employer. So even if it is a negative opinion, you can go ahead with your project.

Sam Sedaei: Now, my understanding is that in this case that we are talking about, the company did eventually decide to work with the Works Council even though it believed that it did not have consultation obligations because it was only testing certain AI tools. So why did the Works Council take legal action anyway?

Cécile Martin: Yes, it was a very tricky question with respect to French law, and I will say that the decision of the employer to consider at first that he didn’t have to consult the Works Council was a decision that had been made without a lot of information about what a court could decide finally, because it was one of the first decision on the introduction of AI tools in France.
In the case at hand, the employer had considered that it was only an experimental phase for using AI tools and that therefore the Works Council had just to be informed but not consulted about this experimentation. On the opposite, the Works Council position was that they had to be consulted before introducing the AI tools, given that it was no longer a pilot phase since the AI tools had been provided to a lot of employees within the company and not a limited number of them. As a consequence, the Works Council considered that it was not a pilot phase, but a real deployment of AI tools within the company. And that’s the reason why they have decided to sue the company.

Sam Sedaei: Interesting. So, sometimes these questions are not so black and white, whether this is just testing or it’s deployment. Sometimes there are gray areas, as we have seen in this case.

Cécile Martin: Correct.

Sam Sedaei: Now, to add a little context to the conversation, within the area of new technologies, companies with at least 50 employees must inform and consult with the Works Council when introducing new technologies and any significant change affecting health and safety or working conditions. Now, the company also needs to inform the Works Council about automated personnel management processes and the risks associated with the proposed use of new technologies. There are also special obligations that are triggered under the European Union’s General Data Protection Regulation, or GDPR, if any proposed process is likely to result in a high risk to employees’ rights and freedoms. Cécile, in this case, why did the court decide that the company had an obligation to engage with the Works Council even though the AI tools were only, as the company put it, were in a testing phase?

Cécile Martin: To reach this decision, the court relied on the fact that certain software programs have been made available to all employees reporting to the Chief Operating Officer in the company and that the employees of the Communication Department had all been trained in the new software program. As such, the employer could not validly claim that such an implementation was experimental since so many employees had been trained and allowed to use AI tools. The code, therefore, considered that the pilot phase could not be regarded as a simple experiment, but should instead be analyzed as an initial implementation of the AI application subject to the prior consultation of the Works Council.

Sam Sedaei: Okay, so in light of that analysis, what did the court actually order the company to do?

Cécile Martin: The court therefore ordered the suspension of the project until the end of the Works Council consultation period, subject to a penalty of 1000 euros per day per violation observed for 90 days and the payment of damages amounting to 5000 euros to the Works Council.

Sam Sedaei: I think this is an example of where companies are realizing that this idea of implementing AI in the workplace can have real financial consequences as well, especially in countries that are being more heavy-handed in regulating AI. So, what are your key takeaways from this case, and how do you believe the ruling is likely to impact other companies’ deployment of AI technologies within Europe?

Cécile Martin: I will say that in light of this decision, employers in France may want to remain cautious before deploying AI tools. The range and scope of this experimentation is to be assessed with care because a court might consider the experiments actually demonstrate that a decision to implement AI was irrevocably taken. So, the best is to define clearly the scope and the perimeter of the experimentation when an employer wants to deploy AI tools in France and, depending on the perimeter and the scope, to determine whether or not this falls into a simple information of the Works Council or a consultation of the Works Council.

Sam Sedaei: Well, Cécile, this has been a great conversation. I want to thank you for bringing this case to the attention of all of us who are closely following the widespread incorporation and adoption of AI tools in the workplace. This was very educational. Thank you again for joining me.

Cécile Martin: Thank you very much, Sam.

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