15 September 2025
Artificial Intelligence (AI) tools have rapidly become part of everyday business life. From drafting emails to summarising documents, they save time and boost efficiency. Some businesses are now even turning to AI to generate legal documents, including employment contracts.
While AI can be a useful starting point, it should never be relied on in isolation. Employment contracts are legal documents that must comply with UK law and set the foundations for the relationship between you and your employees. Get them wrong, and the risks can be serious.
At Hive HR Solutions, we have already seen this first-hand. A client came to us with an AI-generated employment contract they had been using for new hires. On the surface it looked professional, but on review, we found it was missing key clauses, failed to comply with UK requirements, and left the business exposed to potential tribunal claims. Unfortunately, this isn’t unusual.
The Legal Background: UK Requirements for Employment Contracts
Under UK law, employers must provide employees and workers with a written statement of employment particulars on or before their first day of work.
This must include some mandatory information and clauses regarding the particulars of the job and statutory entitlements. There are additional clauses that the employer may wish to include that are relevant to their business and protects the future viability of their organisation.
While AI models can sometimes generate part of this, they do not reliably:
AI may also use wording and terms based on other jurisdictions which is irrelevant or even unlawful in the UK, leading to confusion and non-compliance.
The Risks of Relying on AI for Legal Contracts:
| Risk | Details |
| Missing statutory entitlements | Key rights such as sick pay, notice periods, or working hours may be omitted, leading to tribunal claims or unlawful deduction of wages. |
| Unenforceable clauses | AI often produces terms that are too vague, unfair or unlawful under UK law – e.g., vague non-compete clauses that would not hold up in court. |
| Outdated content | AI models are not always trained on the most current legislation or case law, so contracts can quickly become inaccurate or misleading. |
| Jurisdictional confusion | Many AI tools rely on US or international legal frameworks that do not apply in the UK, leaving employers unknowingly exposed to non-compliance. |
| Lack of personalisation | AI can’t reflect the culture, sector norms, or specific needs of the organisation, meaning the contract may be legally thin and practically unworkable. |
Our Recommendation: Use AI as a Tool – Not a Substitute
We are not suggesting that AI has no role in this type of work. On the contrary, it can be an excellent starting point for understanding what should be included, legal terminology and industry best practice.
However, employment contracts should always be:
A contract is more than a piece of paper, it sets expectations, protects your organisation, and builds trust with your people. That’s something AI simply can’t replicate.
Final Thoughts
AI is powerful, but it’s not a replacement for professional expertise. While AI tools like ChatGPT are impressive, relying solely on them to draft an employment contract remains risky. UK employment law is complex, and contracts generated without legal oversight can easily omit essential terms or include unenforceable clauses.
If you’re in doubt about your contracts, policies, or compliance practices, we’re here to help. At Hive HR Solutions, we can review your contracts, highlight risks, and create tailored, legally sound documents that give you peace of mind.
References
Good Work Plan