The AI Act at Work: Annex III Point 4, Prohibited Practices and the Deployer's Duties

All courses / AI Boss / Module 5 / Chapter 21

Learning objectives

After the lesson the participant can:

• Classify the functions of a management system against the four limbs of Annex III, point 4(b).
• Explain why a system that evaluates individual workers cannot use the Article 6(3) derogation.
• Describe the deployer's duties under Article 26 and identify which carry most weight in management.
• Record a classification per function with prohibition check, role, consequences and reopen triggers.

Key concepts

Annex III, point 4(b)

High-risk listing of AI systems intended to make decisions affecting terms of work, promotion or termination, to allocate tasks based on individual behaviour or personal traits, or to monitor and evaluate performance and behaviour.

Classification by intended purpose

Classification follows the intended purpose, not the technology or the vendor's label, so one system can be classified differently for each purpose, as Hansa's claims-triage agent is for routing and for work allocation.

Profiling closes the derogation

An Annex III system is always high-risk where it performs profiling of natural persons. A management system that evaluates individual workers is profiling by definition, so Article 6(3) helps only at the edges.

Competence, training and authority

Article 26(2) requires oversight by natural persons with all three, plus support. A unit manager who may not depart from a roster without asking central HR has competence and training but not authority.

Seven controls

Classification per function, the prohibition check on every release, named overseers with written authority, prior information, the impact assessment where it applies, an explanation from the record, and monitoring with suspension criteria and log retention.

Interactive exercises

Do them here and get feedback at once. Choose a card and then where it belongs, or drag it.

Teaching plan

Discussion

1. The chapter says allocation by behaviour is M2 Evaluation by another name. What does that imply for how your organisation should review an optimiser's input features?
2. Hansa Mutual rejected reliance on the transitional rule for systems already in service because its allocation rules change monthly. When, if ever, would relying on that rule be a sound basis for planning?
3. The duty under Article 26(7) is information, not consultation, and runs to representatives and to affected workers individually. What would a notice need to contain to be useful to the person rostered?

Written exercise

Self-test

Choose an answer to see whether it is right, or open the answer below each question.

1. What did the review recorded in AIDR-0651 find in the claims-triage agent's allocation rules, and what was decided?

   1. A feature inferring handlers' emotions from voice; it was moved to an optional module that team leaders may switch on with the consent of the Konzernbetriebsrat
   2. A rule using handlers' declared availability, which was classified as prohibited
   3. A capacity factor derived from each handler's throughput over four weeks; it was removed and the allocation function treated as high-risk
   4. A ranking of handlers by age band, which was kept under the Article 6(3) derogation
   Show the answer

   C. A capacity factor derived from each handler's throughput over four weeks; it was removed and the allocation function treated as high-risk
   The throughput-based factor is a behavioural input in the sense of the draft guidelines. Hansa treated the allocation function as high-risk under point 4(b) and now allocates on skill tags, open workload and declared availability only.

2. According to the Commission's guidelines on prohibited practices as the chapter reports them, which of these falls inside the prohibition in Article 5(1)(f)?

   1. A call centre tracking its employees' anger from their voices
   2. Sentiment inferred from the text of employees' written survey answers
   3. Detection of physical fatigue in drivers
   4. Tracking customers' emotions to help an employee handle a call
   Show the answer

   A. A call centre tracking its employees' anger from their voices
   The prohibition concerns emotions inferred from biometric data of workers or candidates. Text sentiment is outside, physical states such as fatigue are not emotions, and tracking customers' emotions is not covered.

3. Why must Nordvik Region complete a fundamental rights impact assessment for ShiftWise while Hansa Mutual need not for its claims allocation?

   1. Because ShiftWise is built on a general-purpose AI model with systemic risk, whereas the claims-triage agent runs on fixed allocation rules outside the model
   2. Because Nordvik is a body governed by public law, whereas a private insurer's duty under Article 27 attaches to underwriting
   3. Because Hansa's works council has waived the assessment in KBV-IT-2024
   4. Because Article 27 applies only to systems procured by tender
   Show the answer

   B. Because Nordvik is a body governed by public law, whereas a private insurer's duty under Article 27 attaches to underwriting
   Article 27 applies to bodies governed by public law, private entities providing public services and deployers of the credit and insurance systems in points 5(b) and (c). Hansa assesses its management systems within its DPIAs.