Artificial intelligence (“AI”) tools, from ChatGPT to Grok, have embedded themselves into daily workplace routines, offering unprecedented efficiency and versatility. Beneath the appeal, however, lies a reality that employers cannot ignore – AI can generate misleading content, expose personal or confidential information and create significant legal and reputational risk if left unchecked.
A primary concern in the South African context is compliance with the Protection of Personal Information Act 4 of 2013 (“POPIA”). POPIA governs how “personal information” is collected, stored, used and shared. This includes names, contact details, identification numbers, employment history, financial records, etc. Accordingly, when an employee enters client or company data into a public AI platform, this typically amounts to “processing” under POPIA. If that platform’s servers are located outside South Africa, as is often the case, the act may also constitute a cross-border transfer of personal information. Such transfers are only lawful if the recipient country has adequate data protection laws, if the data subject has given informed consent, or if the transfer is necessary for the performance of a contract or other lawful grounds recognised by POPIA.
POPIA places strict duties on the “responsible party”, in this case the employer, to ensure personal information is processed lawfully, reasonably, and securely. This includes obtaining consent where necessary before processing or transferring personal information via AI tools, ensuring appropriate security safeguards against loss, damage or unauthorised access, notifying the Information Regulator and affected individuals if a data breach occurs, and limiting processing to what is necessary for the stated purpose. Breaches of POPIA can lead to administrative fines, civil claims for damages and in serious cases, criminal prosecution. Importantly, employees who independently expose personal data through AI tools can place their employer in breach, even without malicious intent.
From an employment law perspective, the integration of AI into the workplace adds complex new dimensions to employees’ existing duties and obligations. While AI tools can be powerful assistants, they also create opportunities for inadvertent misconduct. For example, when seeking help from AI platforms, employees may (often without realising it) upload or reference proprietary information, trade secrets, or confidential business strategies. This can amount to a breach of contractual duties of confidentiality or even statutory obligations, particularly because most AI platforms operate in public or semi-public environments where data may be stored, shared, or vulnerable to cyberattacks. The mere act of inputting sensitive data into an AI system could, therefore, create a significant legal and security risk for both the employee and the organisation.
Compounding this risk is the fact that AI systems are trained on vast datasets that often reflect historical patterns of human behaviour, patterns which may include bias, inequality, or prejudice. When such AI tools are used in recruitment, performance evaluation, or other HR-related decision-making without adequate human oversight, they may unintentionally replicate or even amplify these biases. This can result in discriminatory practices that contravene inter alia the Employment Equity Act 55 of 1998, exposing employers to costly legal claims and reputational harm. For this reason, organisations should not only educate employees about the risks of sharing sensitive data with AI tools, but also implement rigorous oversight measures, such as regular audits of AI systems, ensuring diversity in training datasets and retaining a human decision-making component, to detect and mitigate potential bias before it manifests in employment decisions.
AI search histories, prompts, or output logs created on company systems could also be relevant in disciplinary processes. The Regulation of Interception of Communications and Provision of Communication Related Information Act 70 of 2002 (“RICA”) becomes particularly relevant here. RICA regulates the interception of communications and the monitoring of communication-related information, generally prohibiting the interception of employees’ communications unless an exception applies.
While these exceptions may theoretically permit employers to review AI activity logs or message histories when there is a legitimate reason, a major challenge lies in distinguishing between work-related and personal communications. Employees may use the same devices, systems, or AI platforms for both purposes and AI prompts can easily combine professional queries with casual or personal content. The safest approach is thus to obtain clear, informed consent from employees, expressly limit AI use on company systems to authorised work-related purposes, and ensure monitoring is strictly aligned with legitimate business needs.
Mitigating these risks requires more than ad hoc measures. Employers should adopt clear AI policies that define permissible platforms, purposes and prohibited conduct, while prohibiting the entry of personal or confidential data into unapproved AI systems. Intellectual property safeguards should be built into processes, including requirements for source verification and clarity on ownership of AI-generated works in employment contracts. Training programmes must address the legal, ethical and operational risks of AI, ensuring that employees understand their obligations. Organisations should also implement secure systems that maintain audit trails of AI use to support internal investigations, compliance audits and potential litigation.
AI offers South African employers a transformative opportunity to enhance productivity, streamline operations and drive innovation. Yet these benefits will only be realised if organisations embed governance, compliance and accountability into AI use from the outset. Without such measures, AI could as easily become a liability, exposing businesses to breaches of privacy, intellectual property disputes and reputational harm. Responsible adoption, underpinned by clear rules, consistent training and disciplined oversight, remains the most effective way to harness the advantages of AI without compromising the very assets that make a business competitive and secure.
The remarkable productivity gains AI offers must be balanced with vigilant oversight. Over-reliance on automated outputs risks eroding critical thinking and personal accountability among employees, which can undermine decision-making quality and expose organisations to unforeseen errors or liabilities. Employers need to actively manage this tension by fostering a culture where AI tools are embraced as powerful aids, not substitutes for human judgment. Only by combining the speed and efficiency of AI with thoughtful, responsible human oversight can businesses truly unlock AI’s transformative potential without compromising integrity, innovation, or competitive advantage.
