The major aim of the current research was to explore how digital HR ecosystems impact employee dignity, by which ethical leadership was pitched to act as an intervening variable. The research aims to answer the question of how HR technological innovations, including AI-based recruitment, performance management, and employee engagement systems, can influence how employees perceive the concepts of respect, fairness, and autonomy and whether ethical leadership can guide such results. A quantitative research method was used, and a sample of 390 employees representing different sectors was used through a structured survey questionnaire to collect data. Purposive sampling was done so that participants were those with experience in using digital HR systems. The findings showed that digital HR ecosystems have a positive impact on employee dignity; however, the impact is significantly enhanced under the conditions of ethical leadership. The effective mediator came in the form of ethical leadership, which led to trust and fairness.