Automated Decision-Making and Algorithmic Management: Implications of the CJEU's SCHUFA (Scoring) Case for the EU Labour Law

Abstract

Praised by many as a landmark ruling with wider impact on Al-powered automated decision-making systems across sectors, and equally criticised for creating systemic fissures in the GDPR framework, the recent judgment by the Court of Justice of the European Union in SCHUFA (scoring) case (C-634/21) concerning the interpretation of Article 22(1) GDPR deserves to be scrutinised in light of its potential implications for the EU labour law and the regulation of algorithmic management practices. Employers increasingly rely on automated systems to support or fully automate their management decisions. The use of automated decision-making systems in the recruitment and/or employment context largely falls back on the general data protection rules. However, there are limits, ambiguities, and potential gaps regarding their application that could undermine the workers protection, and bring into question regulatory compliance. The emerging EU legislation, such as the proposed Platform Work Directive (COM (2021) 762), aims to provide specific obligations concerning algorithmic management. Even if this legislation is passed, it will apply only in the context of platform work, and not in traditional employment, which could result in different levels of protection. The question about the nature and scope of Article 22 GDPR in the employment context therefore remains relevant. This paper will critically evaluate the findings from the SCHUFA (scoring) case and explore their impact on the current and future regulation of algorithmic management. The aim is to propose workable solutions that harness the benefits of legitimate algorithmic management practices, while safeguarding the workers rights in the Al-driven world of work.