The court found discrimination in the unjustified deviation from the algorithm to the detriment of a worker, emphasizing the need for transparency and justification in the use of automated tools in employment decisions.
The widespread use of new technologies in the workplace is an increasingly common reality. In this regard, the protection of data obtained by employers, as well as the use of algorithms to facilitate processes, are challenges that companies have had to face.
In this context, we discuss a Spanish case (Social Chamber of the High Court of Justice of Galicia, in judgment No. 02509/2023) in which an appeal filed by an employer against a judgment upholding a complaint of violation of fundamental rights was rejected.
The company had an algorithm that, according to the requirements of each position, designed profiles on two levels, one of minimum compatibility and one of optimal compatibility. With this algorithm, the qualities of each candidate were translated into a numerical factor that was lower the closer they were to the profile developed by the algorithm, which in turn were listed from most compatible to least compatible, in a kind of ranking.
It is important to mention that for years this algorithm was key in determining internal promotions within the company, both for temporary and permanent positions. So much so that all of the positions competed for in recent times were awarded to those workers whose professional profiles obtained the best matches according to the algorithm, notwithstanding the fact that the internal process also included a personal interview.
As a result, and after successfully using the algorithm from 2017 to 2021, one employee claimed to have been discriminated against because she was not awarded the position she was applying for, even though she had been rated by the algorithm as the most suitable candidate.
The employee emphasized that despite obtaining the best match with the profile designed by the algorithm, and consequently being listed first in the ranking, she was rejected for the position solely because of her status as a union leader.
In this regard, the court found that “the methodology for creating worker profiles is carried out using a computer tool that processes the training reported by workers and validated in advance by the commission.” It also confirmed that during the years in which this algorithm was used, a total of 16 positions were assigned using this process, with the person who ranked first in the algorithm’s ranking being selected for all of them, i.e., the professional profile with the highest compatibility with the one designed. Finally, it was proven that the plaintiff held a certain role as a union leader.
With this background, the lower court upheld the action brought. The employer appealed against this ruling, in which context the Social Chamber of the High Court of Justice of Galicia stated that: “in order to understand that there has been a breach of fundamental rights by the company, three elements must be present: a) action that constitutes an expression of the exercise of their right; b) retaliation by the company; and c) a causal connection between the two behaviors.
The court continues, “it is in relation to the latter that all the circumstantial evidence we have previously mentioned comes into play, because in many cases it is very difficult to assess such a connection, as the employer may try to hide the true cause of the business conduct (retaliation) behind the protective veil of other legally accepted causes (generally the exercise of disciplinary power or managerial power).”
Therefore, it concludes for the specific case that: “it has been proven that the competency management system was the calculation scale that was habitually used […] and that the plaintiff was the one who was closest to the required profile, taking into account that the port authority had already violated the plaintiff’s freedom of association, as proven by fact 11, without the company having proven reasons to refute the above evidence, having even acknowledged that her status as a union representative had been a factor that had placed her at a disadvantage. Consequently, it is appropriate to uphold the ruling contained in the appeal and dismiss the appeal filed.”
The court’s reasoning provides a very important lesson on how to approach decision automation in a business context.
Thus, it should be noted that the continuity of a practice—in this case, the selection of the applicant who most closely matches the profile designed by the algorithm – may be a relevant indication of a violation of fundamental rights, requiring special justification for deviating from the employer’s usual practice, especially when such deviation is carried out by a person, to the detriment of the criteria adopted by a source that is – at least in abstract terms – more objective, such as the algorithm used by the company.
Finally, the reasoning behind this change is essential, since in the present case the court considered that the plaintiff’s union status and the departure from the criteria provided by the algorithm – which had been sacredly considered by the company – were sufficient indications that the motive for the decision was discriminatory, which is why it was up to the employer to justify the measure taken, something that was not possible in the court’s opinion, thus constituting a violation of fundamental rights.
For more information on these issues, please contact our Labor Group:
Jorge Arredondo | Partner | jarredondo@az.cl
Jocelyn Aros | Director Labor Group | jaros@az.cl
Felipe Neira | Senior Associate | fneira@az.cl
Palmira Valdivia | Associate | pvaldivia@az.cl
Manuel Sepúlveda | Associate | msepulveda@az.cl
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