Why you shouldn’t use AI to write employment contracts

Ever since satnav was introduced, there have been tales of cars, or particularly larger vehicles like lorries, being sent en masse via bizarre routes that end in traffic chaos.

Just last year Lullington, a tiny village in Somerset, was overwhelmed with enormous lorries blocking its single track lanes, damaging the bridge and getting wedged in. It was reported that Google Maps had suddenly started recommending the route in July 2025.

On paper, or rather a computer screen, a route may look to make perfect sense. But without understanding the context of the roads and vehicles, it is completely inappropriate. 

This is a very visual analogy to what happens when you use AI to write employment contracts.

Why is it tempting to use AI for employment contracts?

The temptation is that AI is fast, cheap – perceived to be free, even (although with most “free” technology, you are the product; as the saying goes) – and looks superficially professional. You think you are getting a polished, bespoke contract via a shortcut. But just like the satnav, if you do not understand the road you are on, you may well be heading for trouble.

The trouble with AI employment contracts

Employment law is complicated and nuanced and always evolving. The stakes are high when you get it wrong, with distracting employment tribunals, costly financial penalties, reputational damage – or perhaps being contractually on the hook for terms you never intended to grant.

AIs are notorious for presenting erroneous information convincingly. In the case of employment contracts and the law they are based on, this could arise from AIs drawing information from other jurisdictions like America. Or from the right jurisdiction but the wrong time period, say a law that was reformed a couple of years previously. Often, prospective changes are pushed back due to further consultations or some other delay. This can confuse an AI too.

And sometimes they just hallucinate!

Then there is the generalisation of contract clauses. One industry may well require quite distinct clauses to another, or even one company from another within the same industry. An AI cannot give professional advice so will miss these subtle requirements, again exposing you to significant risk.

There are other concerns with AI, not even related to HR. Top of this list may be data privacy. It is possible to ringfence data fed into AIs but you need to know what you are doing. For many entry level AI platforms, the default will be that what goes into the AI stays in there and has no privacy. 

It may be used to further train the AI models, thus becoming part of the reference information they draw on when giving answers to others. There have been high-profile cases of top-secret company information being divulged in this way. And then there is the GDPR risk of how any personal employee data is used by HR in AIs.

The best alternative to AI

Employment contracts are not something to scrimp on, but they do not need to be excessively expensive. At The HR Dept we offer a good middle ground where we can offer you bespoke, legally sound employment contracts that work for you and what you are trying to achieve, without charging “lawyer fees”.

At a time of heightened employment law changes, if you would like a contract review or to go straight for new employment contracts, please contact us today.