A Guide for HR Teams

The rise of workplace AI is creating a new category of employee relations risk that most grievance procedures were never built to handle. As AI tools become embedded in recruitment, performance management and day-to-day HR processes, they are also reshaping how employees raise concerns, and how those concerns end up at tribunal.

For HR teams, this means:

• A growing volume of grievances involving AI-assisted drafting
• New categories of complaint tied to algorithmic decision-making
• Increased pressure on an already-strained tribunal system
• A widening gap between existing ER policy and current practice

More than eight in ten HR directors (83%) report having worked with a business facing issues related to employee AI use in the past twelve months, and almost all (95%) have encountered cases where AI was used to raise a grievance or progress a dispute, according to a survey by The HR Dept reported in People Management.

This guide sets out what HR and people teams need to understand about this shift, and where to focus first.

What Counts as an AI Grievance

Not all AI-related complaints are the same, and each requires a different response from HR.

The main categories include:

• Algorithmic decisions affecting an employee directly – AI used in recruitment, performance scoring, shift scheduling or disciplinary flagging
• AI-assisted monitoring and surveillance disputes – complaints about how employees are tracked, scored or observed by workplace systems
• Contested AI outputs – cases where an AI’s conclusion is challenged as biased, inaccurate or unexplained
• AI-drafted grievances – a fast-growing category where the underlying complaint may be routine, but the format and drafting changes how HR needs to respond

This guide focuses specifically on disputes that could escalate to a formal grievance or tribunal claim, rather than broader workforce anxiety about AI adoption.

The Employee Relations Impact of AI Decision-Making

Most grievance procedures assume a human decision-maker. That assumption is increasingly out of step with how decisions are actually made.

Three gaps are emerging consistently:

• A right-to-explanation problem. Employees cannot meaningfully challenge a decision they do not understand, and many AI-driven decisions are not explained to the people they affect.
• A manager readiness gap. A survey of 200 HR professionals by law firm Irwin Mitchell, reported by Recruiter, found 60% of HR managers suspected AI involvement in at least one grievance they had handled, with most having received no training on how to respond differently.
• Slower resolution. 52% of respondents in the same survey said AI-drafted grievances were harder to resolve, citing overly formal language and a lack of personal context.

Employment Tribunal Risk and AI-Related Claims

Employers understandably want to know whether this is translating into tribunal activity, and how seriously it should be treated.

The evidence suggests a nuanced picture:

• A third of businesses surveyed by Irwin Mitchell reported employees using AI to prepare for tribunal claims, and one in three HR managers had been involved in a claim where they believed AI had been used to prepare the case
• Encouragingly, 86% of HR directors who saw AI-assisted grievances reach tribunal reported that none of those cases succeeded
• According to the UK government’s own impact assessment, reported by City AM, the Employment Rights Act is expected to increase tribunal case volumes by a further 17%, adding to an already-strained system
• Under the EU AI Act, recruitment and candidate evaluation tools are classified as high-risk systems, with obligations phasing in from August 2026, relevant to UK employers with EU operations

The immediate risk for employers is less about losing cases and more about rising claim volumes and resourcing pressure.

Where AI Grievances Overlap With Discrimination and Bias Claims

AI-related grievances frequently intersect with discrimination and bias claims, since both often stem from the same underlying issue: an unexplained or unchallenged automated decision.

Relevant findings include:

• The ICO’s 2024 audit of AI recruitment tool providers resulted in almost 300 formal recommendations to improve legal compliance
• Research from Gartner found only 26% of candidates trust AI to evaluate them fairly
• The ICO’s Recruitment Rewired project, drawing on engagement with over 30 employers between March 2025 and January 2026, found widespread gaps in how organisations monitor AI hiring tools for bias

Bias monitoring should be built into any AI grievance process from the outset, rather than added after a complaint is received.

How HR Should Respond to AI-Related Grievances

Employers should focus on four priorities:

• Audit where AI currently touches employee-facing decisions. The ICO found that many employers incorrectly assess their AI tools as decision support, when the tools may in fact be making the decision outright.
• Update grievance procedures to explicitly name algorithmic decisions, closing the gap left by policies written for human decision-makers only.
• Train managers to recognise and handle an AI-related complaint at first contact. This remains the most significant capability gap identified across the available data.
• Document AI decision logic so it can withstand scrutiny. The ICO cites regular, documented bias reviews covering protected characteristics under the Equality Act as good practice.

Employers should also be aware that, according to Thrings, a tribunal can adjust any compensation award by up to 25% for unreasonable failure to follow the Acas Code, regardless of how the original grievance was drafted.

Red Flags: Identifying an AI-Assisted Grievance

The following signals commonly indicate AI-assisted drafting:

In one survey by The HR Dept, 78% of AI-generated grievances relied on inaccurate information or misrepresentations, with a further 11% described as containing substantial factual errors. In one widely reported case detailed by Thrings, a grievance letter cited nine legal cases, of which only two were real.

Regardless of drafting method, every grievance still requires a full and fair investigation under the Acas Code.

Where This Fits Into the Wider AI and Workforce Picture

This guide has focused specifically on grievances and tribunal risk. It sits within a broader shift in how AI is reshaping work across the UK labour market.

One development points to further change ahead:

According to regulatory tracking of the ICO’s plans, the ICO’s statutory Code of Practice on AI and Automated Decision-Making is expected in final form in Summer 2026

How Avado Can Help

At Avado, we help HR and people professionals build the confidence and capability to manage AI-related risk as it emerges in the workplace. Our HR Compliance for Managers course equips managers to identify and respond to AI-related grievances at first contact, before they escalate.

Explore our HR Compliance for Managers course and prepare your managers for this shift!