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UK: Expect Metaverse Employment Disputes

A person wearing a vr headset in a dark room.

​There are many visions of the metaverse, which is essentially a virtual world that incorporates virtual reality where people can meet and interact. For many employers, the earliest glimpse of the metaverse may be the use of virtual reality systems in conferences and events. Microsoft has said it will be adding 3D virtual avatars and environments to Teams this year. Eventually, employees may spend more time doing their jobs in a virtual world. While the metaverse offers many benefits, such as the ability to work from home while feeling more connected with colleagues, it will also lead to a range of new employment law issues, such as those related to diversity and misconduct.

Diversity, Inclusion and Avatar Design

An online representation or avatar must be created in order to take part in the metaverse. In the online gaming world, choosing a character or avatar is mainly about digital escapism. However, there is much discussion about whether characters sufficiently represent human diversity and whether female characters are oversexualized, with games developers acknowledging the need to work on confronting these issues.

When the metaverse reaches workplaces and professional environments, it seems more likely that people will choose more photoreal avatars—ones that look like them—or, at least, how they perceive themselves to be. This is a trend that is already visible in how people craft memojis (that is, an emoji that is intended to be a self-portrait of the user/creator).

A person's choice of avatar may generate some issues around diversity and inclusion:

  • An early issue for HR professionals and employment lawyers could be jokes or offensive comments about people's choice of avatar. Certain comments may even stray into harassment (for example, the row about sexist comments on LinkedIn pictures). There could also be disputes about avatars that deliberately poke fun at others (for example, an avatar that looks like a public persona but emphasizes certain traits). Existing U.K. employment laws would allow employers to discipline employees for inappropriate behavior, although HR may need to develop and enforce guidelines.
  • When designing avatars, a person's natural instinct will likely be to create an "improved" version of themself. There is an interesting phenomenon called the "Proteus effect," which explains how behavior in a virtual world can be influenced by our choice of avatar and how an avatar's characteristics (dress, height, attractiveness) influence a person's response to them. What will this mean for professional avatars? Will natural instincts combine with the Proteus effect to drive a tendency toward taller, thinner and more attractive avatars? If sexist expectations emerge, this may eventually be challenged in the same way that, for example, the requirements to wear high heels have been.
  • U.K. equality law recognizes a limited number of protected characteristics. Some tend to be visible in real life and others tend to be hidden, but the metaverse could disrupt this. The question is: which characteristics will be visible and which will be hidden in the new virtual world? Zwift is an online cycling environment that has provided new insights, due to the fact that it is outside the gaming world and used by both amateur and professional cyclists (that is, it is used by some as a work environment). It has a sliding scale for skin color, it offers various hair options and it prompts the user to pick their nationality, which is then displayed. Oculus, the virtual reality headset manufacturer and a subsidiary of Meta, has stated that it is developing subtle differences in avatar creation that will expand the extent to which they are customizable.

The invitation to pick an avatar that reflects a person's true appearance raises a range of diversity issues:

  • Will some employees gain the benefit of picking avatars that express their real gender identity?
  • Will others find ways to show characteristics that they cannot so easily show in real life, such as autism?
  • Will some be frustrated by not being able to select an avatar that represents their unique combination of protected characteristics?
  • Are there circumstances, such as diversity training environments or recruitment exercises, where it would be appropriate for employees to "try on" protected characteristics that they do not have? (Many companies are already beginning to use virtual reality to support recruitment decisions.)
  • Should avatars show pregnancy and, if so, when and how?
  • Will employers be expected to regulate the above issues and what will that mean, for example, for diversity monitoring?

It is possible to imagine a metaverse world offering some real breakthroughs for inclusion and authenticity. Nonetheless, concerns have been raised that the metaverse has a "groping problem" at such an early stage, to which Meta has responded with the introduction of a mandatory distance between avatars.

Metaverse Misconduct

Avatars are not independent thinkers, so if an employee misbehaves in the metaverse, they cannot blame their actions on their avatar. Many types of misbehavior will be covered by existing policies and employment laws. For example, colleagues who are abusive to each other in a virtual environment would be subject to normal disciplinary rules and unfair dismissal laws.

The U.K. Equality Act has a wide definition of sexual harassment that has never included the need for physical touch. The act also prohibits harassment related to any protected characteristic and direct discrimination because of any perceived protected characteristic, regardless of whether the worker has that characteristic themselves. This means that employees whose avatars are subjected to harassment or discrimination seem likely to be able to make claims under existing laws.

Will new types of misconduct emerge in the metaverse? For example, if the metaverse includes non-player characters (NPCs) like the online gaming world, will being rude to, or an attack on, an NPC constitute misconduct or harassment, respectively?

Social media has blurred the boundaries between personal and professional worlds. Employers have sought to discipline employees for what they have posted on Facebook or Twitter. These issues will almost certainly continue in the metaverse. Presumably, metaverse worlds will be partly open (for all) and partly closed (for a company's internal operations or a social platform for employees); however, there is scope for inappropriate behavior to leak out. Those problems will be exacerbated if the metaverse delivers "interoperability" and allow people to move easily between worlds. People may also want to move around as one avatar, or carry certain virtual objects between worlds, thereby revealing more about their private identity, views or associations and potentially increasing the scope for "culture wars."

Other Metaverse Employment Issues

The metaverse will raise a number of other issues, many of which are simply not addressed by existing employment laws. These include:

  • Jurisdictional issues—people in the virtual world can be anywhere in the real world, so whose laws will apply?
  • Risks to confidential information and security—how can employers confirm the identity of participants in meetings? It used to be possible to see and recognize employees, but in the "anyone-could-be-anyone" world of the metaverse, will there be more hackers or corporate espionage? Hackers have already been seen displaying offensive materials on Zoom calls and the risks will be greater in the metaverse.
  • Health and safety—can a headset be worn all day or will new safety guidance be needed?
  • Ownership in the metaverse—will noncompete clauses need updating? Could metaverse providers access or use company information that is shared within their environment?
  • Employment status and working time—as new ways of earning income emerge, which ones will be defined as employment relationships? Is a person always working when they are online as an avatar?


It will be some time before Employment Tribunal claims (filed on Form ET1s) are brought by one avatar against another. Nonetheless, in a similar fashion to how the tribunals had to catch up with Facebook, LinkedIn and Twitter, they will no doubt need to keep up with a range of new issues unique to the expanding metaverse. Some existing frameworks can cover those new issues, but there are areas where employment law will struggle to evolve at the same pace. A virtual reality universe could nonetheless offer exciting opportunities.

Tarun Tawakley is an attorney with Lewis Silkin in London. © 2022 Lewis Silkin. All rights reserved. Reposted with permission of Lexology.


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