23 October 2016
DLA Piper's Anita Lam said making human resource decisions on the basis of big data alone is quite risky. Photo: EJ Insight
DLA Piper's Anita Lam said making human resource decisions on the basis of big data alone is quite risky. Photo: EJ Insight

Use of big data in staff evaluation may lead to legal disputes

Corporates are recommended to seek legal advice before setting up a big data system to help make human resource decisions as their actions may lead to labor disputes, DLA Piper Hong Kong said.

A company can be sued for sexual or racial discrimination if it uses big data to promote or sack a particular group of employees as the data it uses may prove to be biased, Anita Lam, Of Counsel (Solicitor Advocate) – Employment Practice, DLA Piper Hong Kong, told EJ Insight in an interview.

“Historical data can be biased. If a company tries to predict who will be the outperforming staff by taking samples without enough variations in gender, language and race, it may generate results with similar backgrounds,” Lam said. 

Promoting some potential outperformers with big data without manually considering other criteria may easily cause discrimination against the remaining staff, she said.

There are some algorithms that claim to be able to help employers predict which employees are planning to leave the office.

However, if the employers use biased samples and raise the salaries of a certain group of staff who have a higher chance of quitting, they may be accused of discrimination, she said. 

Apart from being accused of discrimination, employers may also be prosecuted for having violated the Personal Data (Privacy) Law if they fail to handle the data properly. 

Insurers, banks and listed companies could face investigation by relevant regulators if any of their personal data is leaked.

When companies are collecting sensitive information such as biomedical data through wearables like wristbands and helmets, they should first gain the approval of their staff and make sure that the staff have a clear understanding of how the data will be used, Lam said.

Companies should also provide procedural guidance and training to its staff who may have access to the collected personal data. 

Leakage of personal data, such as information about employees or clients, to a third party is usually caused by human negligence, rather than hacking activities, she said.

Employees or clients can claim damages from data collectors if they face losses due to the leakage. 

Companies are advised to take all necessary measures to ensure data security.


Employers should also avoid collecting unnecessary information such as how many times an employee has gone to the toilet or taken a coffee break as such a move may cause damage to their brand and reputation.

For example, managers who obsessively track their subordinates with wearables may be accused of general or sexual harassment. 

“Employers have the responsibility to prevent their staff from being harassed by their supervisors, who may abuse their power in handling personal data,” Lam said. 

Although there have been no legal disputes involving data collection through the use of wearables in Hong Kong so far, such risks should not be neglected as the use of wearables will become increasingly popular in coming years. 

Some insurance companies are likely to launch programs to encourage companies to collect health data from staff. 

As companies want to lower or at least control their expenses on medical insurance premiums, they may reward their staff who voluntarily put on wearables and maintain a healthy lifestyle, Lam said. 

Besides, retailers may also request their salesmen to put on wearables as energetic staff will result in higher productivity.

[Chinese version中文版]

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Chief reporter at EJ Insight

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