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Global HR Lawyers

Ready Player ET1: employment disputes in the metaverse

11 February 2022

The metaverse and virtual reality offer opportunities but look set to throw up new employment issues around diversity, misconduct and more. Are we ready?

There are many visions of the metaverse. As this article in the Conversation explains, the metaverse is essentially a virtual world, involving virtual reality, where you can meet and interact with other people. For many employers, the first glimpse of the metaverse may come (very soon) from using 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. The metaverse offers many benefits, for example the ability to work from home but feel much more connected with your colleagues, but it will also throw up a range of new employment law issues.

Diversity, inclusion and avatar design

You need an online representation or avatar to take part in the metaverse. In the online gaming world, choosing a character or avatar is mainly about digital escapism. Fortnite skins include fish, aliens and impossibly cool characters. None of them is obviously pregnant or disabled. There is much discussion about whether characters are sufficiently diverse and whether female characters are over sexualised, 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 (a trend which is already visible in how people craft memojis). Our choice of avatars, however, 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. Some light-hearted banter can be expected, but this could potentially deteriorate into harassment. Remember the row about sexist comments on LinkedIn pictures? There could also be disputes about avatars which deliberatively poke fun at others (for example an avatar which looks like a public persona but with certain traits emphasised). Existing UK employment laws would allow employers to discipline employees for inappropriate behaviour, although HR may need to develop and enforce guidelines.
  • When designing our avatars, our natural instinct is surely going to be to pick “improved” versions of ourselves. There is an interesting phenomenon called the “Proteus effect” which explains how behaviour in a virtual world can be influenced by our choice of avatar, and how an avatar’s characteristics (dress, height, attractiveness) influence how we respond to them. What will this mean for professional avatars? Will our natural instinct combine with the Proteus effect to drive a tendency towards taller, thinner and more attractive avatars? If sexist expectations emerge then we may see this eventually being challenged in the same way as, for example, requirements to wear high heels.
  • UK Equality law recognises 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. Which characteristics will be visible and which will be hidden in the new virtual world? Zwift is an online cycling environment which is interesting to look at because it is outside of the gaming world and used by both amateur and professional cyclists (so it’s a work environment for some). It has a sliding scale for skin colour, it offers various hair options and it prompts you to pick your nationality which it then displays. Oculus say they are looking at subtle differences and are emphasising just how customisable their avatars are going to be. The invitation to pick an avatar that reflects the real you 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 others be frustrated by not being able to select an avatar that represents their unique combination of protected characteristics? When would it be ok for employees to “try on” protected characteristics they don’t have? In diversity training environments, perhaps? What about recruitment exercises? (Many companies are already beginning to use virtual reality to support recruitment decisions). Should avatars show that they are pregnant and, if so, when and how? Are these issues which employers will be expected to regulate and what will it mean, for example, for diversity monitoring?

Misconduct in the metaverse

Avatars are not independent thinkers, of course, so if an employee misbehaves in the metaverse it will be no defence to say “my avatar did it”. Many types of misbehaviour 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 UK Equality Act has a wide definition of sexual harassment which has never included the need for physical touch. The Act also prohibits harassment which is related to any protected characteristic and direct discrimination because of any perceived protected characteristic (whether or not 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 is going to include non-player characters (NPCs) like the online gaming world, will it be misconduct to be rude to an NPC or harassment to attack an NPC?

We have seen how 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. We will almost certainly see more of this with the metaverse. Presumably, metaverse worlds will be part open (for all) and part closed (for companies internally or for employees socially) but inappropriate behaviour may leak out. Those problems will be exacerbated if the metaverse really does deliver “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, revealing more about their private identity, views or associations and potentially also increasing the scope for “culture wars”.

Other employment issues in the metaverse

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

  • 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 do you know who is in your town hall? You used to be able to see and recognise your own employees, but in the anyone-could-be-anyone world of the metaverse, will there be more hackers or corporate espionage? We’ve already seen hackers displaying offensive materials on Zoom calls and the risks will be greater in the metaverse.
  • Health and safety - can you wear a headset all day long or will new safety guidance be needed?
  • Who owns what in the metaverse - will non-competes need updating? Could metaverse providers access or use company information which 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? When are you working if you are online as your avatar?


We are some way off seeing Employment Tribunal claims (filed on Form ET1s) brought by Warlock999 naming Bigboss1 as a second respondent. Just as the tribunals had to catch up to the launch of Facebook, LinkedIn and Twitter, however, they will no doubt need to get to grips with a range of new issues thrown up by the venture into the metaverse. Some of our existing frameworks can cover those new issues, but there are areas where employment law will struggle to keep up. A virtual reality universe could nonetheless offer exciting opportunities. We’ll see you there, as soon as we’ve designed our avatars…

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