Canadian employers are deploying AI-powered monitoring tools faster than laws can keep up, but employers can close the gap: Employment Law Masterclass speaker
Canadian workplaces are deploying artificial intelligence (AI) monitoring and productivity tools at a pace that far outstrips the legal frameworks designed to govern them. For human resources (HR) leaders, that gap creates direct exposure around privacy, psychological safety, and wrongful dismissal claims. Lisa Stam, Managing Partner at Spring Law in Toronto, is bringing that message to the HRD Canada Employment Law Masterclass on Sept. 29, where her session, "Under the Microscope – AI Monitoring, Productivity Pressure and Employee Risk," puts the issue squarely on the table.
"Employment law is moving so quickly right now," says Stam. "Since 2020 and Covid, the case law has moved way faster than it did in the first 20 years of my practice – and then you throw in AI, and everything is shifting upside down."
The AI regulatory gap in Canada
The central challenge for Canadian employers is that there’s no comprehensive AI legislation in force yet, according to Stam. Ontario's Working for Workers Act, 2022 (Bill 88) requires employers with 25 or more employees to disclose whether and how they electronically monitor staff – making it the only province with that explicit statutory obligation. British Columbia's Personal Information Protection Act (PIPA) extends privacy obligations to private sector employers, but for most of the country, the legal picture is a patchwork, she says.
"The biggest gap is that there’s no law on [AI monitoring] yet," says Stam. "Employers don't have a ton of guidance on exactly how much they can and can't do. In Ontario, if you're a private sector employer, there's a lot of ambiguity about what can actually apply to you."
For national employers operating across provinces or borders, her advice is direct: aim for the highest standard, not the lowest.
"If you have operations in Ontario, BC, Europe, and the United States, those are four very different approaches," she says. "Europe would be the highest standard. BC is second because they have actual legislation. Then you've got Ontario with the patchwork, and the US where employer rights vary by state."
Rising to the highest standard is legally prudent and makes policy harmonization possible across all operations, says Stam.
Transparency is the baseline
The most consistent thread in Stam's advice is transparency. The problem isn’t when organizations deploy AI monitoring tools – it’s when they conceal them, she says.
"It's not that employers aren't allowed to use these tools, it's being sneaky about it that's the problem,” says Stam. “And if you, as an employer, feel you have to be super sneaky about it, there may be other issues to think about. Obviously, there's trust in your employees. Maybe they need performance management."
Privacy-related case law – particularly in unionized workplaces where privacy principles are implied into collective agreements – consistently asks whether a less invasive tool could achieve the same goal. Employers who skip that analysis before rolling out surveillance software are leaving themselves exposed, according to Stam.
"All you need to do is say, ‘We're monitoring," she says. "That's the standard. You just need to be transparent that you're doing it."
When algorithms make decisions, employers carry the risk
The more complex legal territory emerges when AI moves beyond collecting data to driving disciplinary and termination decisions.
"It's one thing to have monitoring tools, but another to having the robots make all the decisions about the data that’s coming from them – that's where I think employers really get into trouble right now,” she says.
A defensible decision trail requires human involvement at both the framing and review stages, says Stam. Before any disciplinary or termination decision, HR leaders need to understand what criteria went into the AI analysis and what the output actually means. An algorithmic output isn’t a conclusion – it’s a data point that must be evaluated by a person.
Stam is equally quick to highlight the upside of AI monitoring tools. AI-assisted performance management, done well, eliminates the annual review's dependence on fading memories, she says.
"On the performance review side, AI can be a really helpful tool for providing real-time information to employees during the year," she says. "You're punching out a question to supervisors once a month – how is so-and-so doing? Something that simple allows us to gather information in real time."
Productivity pressure and where the line sits
Beyond monitoring, Stam points to a subtler risk: AI tools that quietly raise the performance bar without any formal policy change.
"There is a thin line between pressuring employees to over-perform versus just building in some more accountability," she says. "Having a bit of accountability is par for the course and not a bit deal, but if it's breathing down someone's neck and needing them to perform every second of the day – that's not realistic. We're not robots."
When that pressure tips into unrealistic expectations, HR leaders may be setting the groundwork for a constructive dismissal claim or a psychological health and safety complaint, says Stam. Understanding how psychological safety obligations intersect with AI monitoring in Canadian workplaces is increasingly relevant as these tools proliferate.
Don't wait for the law – act now
Stam is frank about the pace of legislative reform. Passing laws is slow. AI development is not. And when governments change, bills die on the order paper.
"Employers don't have to wait for the law to change," she says. "They can still roll out effective policies in the meantime – basic principles of transparency, training, awareness, being clear about expectations and where these AI tools will play a part – hopefully employers don't need legislation to tell them to do those basic HR communications."
Her message for attendees to the HRD Canada Employment Law Masterclass is to approach AI with curiosity, not fear.
"When I speak about AI, I'm not interested in fear mongering about it, and banning it is ridiculous, it’s not an option," she says. "So how do we embrace AI in the workplace in a way that helps employers and employees, and engages our curiosity instead of our fear? There are lots of opportunities for employees to shift from a punching-the-clock, hourly existence into more of a project-based one because they're using AI to employ a different way of doing their work.
“But all of that is training, all of that is investment in your team."
The HRD Canada Employment Law Masterclass takes place virtually on Sept. 29, with sessions all day. Registration is available here.
