Australia: Surveillance in the Workplace – are employers looking at all of the implications?

Surveillance of employees by their employers is not a new workplace issue; however it is an area where technology developments and advances have continued to enhance employers' ability to monitor employee conduct in the workplace.

Employers have a variety of surveillance options, including the use of GPS systems in company vehicles, the monitoring of email and internet use and video camera surveillance and phone recording.

While employers will always rely on witness evidence (for example, when investigating employee misconduct or disciplinary issues), there appear to be more examples in Court and Tribunal proceedings of employers seeking to rely on some form of surveillance material as part of their case.

Looking beyond the philosophical arguments of whether employers should have the right to carry out surveillance in the workplace, it is important for employers to consider the broader implications of this 'electronic invasion', including the legal risks in introducing or relying on surveillance systems.

Workplace surveillance legislation

There appears to be a growing acceptance from employers, employees, unions and institutions such as Fair Work Australia (FWA), that workplace surveillance is a legitimate and often necessary business requirement. For example, it is generally accepted that vehicle GPS systems are necessary as security or safety measures, in order to ensure that a vehicle can be located immediately if required.

However, as is often the case, the law appears to have fallen behind technology in regulating electronic surveillance. Further, whilst there are a number of Federal and State acts which deal with surveillance, only a few have specific application to the workplace.

One example is in New South Wales, where the Workplace Surveillance Act 2005 (WS Act) was enacted to specifically govern the use of surveillance systems in the workplace. The WS Act regulates both the overt and covert use of camera, computer and tracking surveillance devices. There are also specific prohibitions on the use of surveillance of employees in bathrooms, change rooms and toilets.

Another example is the Workplace Privacy Act 2011 (WP Act), which came into effect on 24 August 2011. The Act is similar to the WS Act as it sets out notification and consultation requirements for overt surveillance, and regulation for covert surveillance.

Other States are yet to implement modern workplace surveillance legislation. In Victoria, the Surveillance Devices Act 1999 (SD Act) regulates the use of listening devices, tracking devices and data surveillance devices. While the SD Act was amended in 2007 to limit surveillance in private workplace areas (bathrooms, change rooms and toilets), it is illustrative of how older legislation does little to regulate modern workplace surveillance.

For example, in Gervasoni v Rand Transport (1986) Pty Ltd [2009] FWA 1269, FWA found at first instance that an electronic device which was capable of reporting the geographical position of a vehicle was not an 'electronic tracking device' for the purpose of the SD Act, as the 'primary purpose' of the system was to monitor the environment in which cold-stored goods were being transported. For this reason, the employer was not required to notify the employee that it was installed. This finding was not challenged on appeal.

The case of Ponzio v Multiplex Limited [2005] FCA 1410 involved an alleged breach of the Workplace Relations Act coercion provisions. The Building Industry Taskforce alleged that a contractor had been coerced by a principal to enter into an industrial agreement with the CFMEU. A key issue in this matter involved whether conversations recorded by one party on a telephone were admissible. The Federal Court held that a secretly taped conversation was admissible as evidence as it did not contravene the SD Act, because one of the parties to the conversation had intended to tape the conversation. This meant that it did not fall within the definition of 'private conversation', which requires 'the parties' to the conversation to desire it to be private. Whilst the secret taping could be seen as an invasion of the privacy and as involving underhand tactics, it could not be said to have breached the SD Act.

It is important to note that the lack of regulation in certain jurisdictions is not necessarily of benefit to employers.

Without legislative guidelines, employers inevitably rely on their own policies and procedures in carrying out workplace surveillance, with varying results.

Can workplace surveillance constitute adverse action?

Regardless of whether workplace surveillance legislation exists in a particular jurisdiction, it is possible that an employer's actions in carrying out workplace surveillance could invoke a breach of the expansive general protection provisions of the Fair Work Act 2009 (FW Act).

As most employers are aware, the general protection provisions in the FW Act prohibit persons (in particular employers) taking certain 'adverse action' against other persons (typically employees), because of that person's protected attribute, such as a workplace right, industrial activity or discrimination grounds such as disability or gender.

The surveillance of an employee (either within or outside the workplace), even where compliant with any existing surveillance legislation, could potentially constitute 'adverse action', if it is held to 'alter the position of the employee to the employee's prejudice'. This expression has been given a broad meaning by the Courts, to cover not only a legal injury but any 'adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question'.

Whilst an employer might argue that surveillance itself is benign (if no further action is taken), there is certainly an argument that the invasive nature of surveillance, particularly where it might monitor personal conversations or emails, could constitute an 'adverse affection of' or 'deterioration' in an employee's right to privacy in the workplace, if it meant that an employee would be concerned about certain conversations or activities being monitored by their employer.

Of course, establishing that certain conduct constitutes 'adverse action' does not itself breach the general protection provisions in the FW Act. However, an employer may be in breach if it is found that the surveillance was undertaken because of an employee's particular attribute.

For example, the surveillance of union members, if undertaken because of their union membership, could be a breach of the general protection provisions, even if the employer had other legitimate reasons for such surveillance (such as concerns over misconduct or industrial action).

In order to rebut any such allegation, an employer would need to establish that the surveillance was undertaken wholly for another reason. Having regard to the 'reverse onus' under the adverse action provisions and the ability of the Court to look at what it considers to be the 'real reason' for certain conduct, this may be a difficult onus to discharge.

Introduction of change and consultation

Employers should be aware that the introduction of workplace surveillance may constitute a 'workplace change' that would require it to be dealt with under a consultation clause in an applicable modern award or enterprise agreement.

Schedule 2.3 of the Fair Work Regulations 2009 (the Regulations) provides the model consultation term for enterprise agreements, which is reflected in many modern awards. Under this clause, the consultation process is enacted if:

  1. The employer has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and
  2. The change is likely to have a significant effect on employees at the enterprise.

The provision requires the employer to notify employees and any bargaining representatives of this proposed change, and consult with them regarding the change, including any measures to avert or mitigate any adverse effect on employees.

Whether the introduction of surveillance is likely to have a significant impact on employees will depend on the circumstances. The Model Consultation clause provides guidance on this point by defining 'significant effect on employees' as including:

  1. the termination of the employment of employees; or
  2. major change to the composition, operation or size of the employer's workforce or to the skills required of employees; or
  3. the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
  4. the alteration of hours of work; or
  5. the need to retrain employees; or
  6. the need to relocate employees to another workplace; or
  7. the restructuring of jobs.

It is possible to envisage an argument where an employee or union would claim that the introduction of surveillance results in the termination of employees.

It is important that employers are aware as to whether the introduction of surveillance or new surveillance technology would trigger the consultation process, as there have been instances where the failure to consult with employees has resulted in an employer having substantial penalties ordered against it by a Court.

Reliance on surveillance material during litigation

Evidence obtained from surveillance systems will not always be accepted or treated favourably in litigation. This will depend in part upon the particular forum of the proceedings, and also whether the employer has notified employees that the surveillance is in place.

Surveillance material will generally need to be legally obtained in order to be admissible in a Court.

Under section 138 of the Evidence Act 1995 (Cth), a Court has the discretion to exclude evidence that was obtained 'improperly or in contravention of an Australian law', unless 'the desirability of admitting the evidence outweighs the undesirability of admitting evidence'. For example, evidence obtained in NSW through covert surveillance would not be admissible, if the relevant court authority had not been obtained under the WS Act.

Section 551 of the FW Act confirms that Courts are bound by rules of evidence and procedures for civil matters, when hearing proceedings relating to a contravention, or proposed contravention, of civil remedy provisions of the FW Act – such as a breach of the adverse action provisions.

By comparison, section 591 of the FW Act provides that FWA is not bound by the rules of evidence and procedures in relation to a matter before it – such as an unfair dismissal hearing.

Notwithstanding this, the fact that surveillance material may be legally admissible will not necessarily preclude a finding by FWA that the employer's failure to disclose its use meant that the termination of an employee's employment was harsh.

For example, in Gervasoni v Rand Transport (1986) Pty Ltd [2010] FWAFB 2526, while the Full Bench found that the termination of the employee's employment for tampering with the speed controls of the company vehicle and speeding was not harsh, unjust or unreasonable, it did note that the fact that the employee was not advised that the GPS system was in the vehicle weighed in favour of a conclusion that the termination was harsh.

It is also clear that relying on surveillance in isolation of other supporting evidence or without providing procedural fairness can result in an unsuccessful outcome in litigated matters, including unfair dismissal claims.

In Sean Claypole v BlueScope Steel Limited [2008] AIRC 276 and J K C v BlueScope Steel Limited [2008] AIRC 354 the AIRC ruled that the dismissal of two employees for misrepresenting the extent of their medical condition was unfair.

Mr Claypole and JKC (who were brothers) were both on restricted duties in accordance with certificates of capacity. They were both captured on video surveillance during a weekend camping trip undertaking activities that were allegedly inconsistent with their restrictions. Both employees had their employment terminated for misconduct.

In the unfair dismissal claims, the Australian Industrial Relations Commission (AIRC) found that the video surveillance footage, in the absence of evidence from the treating doctor, was not enough to prove that either employee had misrepresented the extent of their injuries to the treating doctor. The failure to consult with the treating doctor to corroborate the evidence that both employees had misrepresented their medical conditions resulted in the dismissals being unjust and unreasonable.

Best practice process for introducing workplace surveillance

Notwithstanding the lack of consistent regulation in this area, we recommend that employers ensure that, as far as it is possible, workplace surveillance is transparent and that employees understand when and how the surveillance will operate. This could be done by way of a workplace policy and through workplace training.

There have been recent examples where FWA has become involved to conciliate an agreed outcome for the introduction of workplace surveillance.

In CPSU v VicForests [2011] FWA 3079, the parties agreed to terms for introducing the system, including:

  1. The agreed purpose of the surveillance (enhancing employee safety);
  2. The ability for VicForests to rely on the GPS system for disciplinary processes, provided it notified the union of its intention to do so, and that it afforded natural justice / procedural fairness in accordance with the Agreement;
  3. That VicForests would not use the system for monitoring out of hours vehicle usage.

The benefit of this agreed approach is that there is likely to be a greater acceptance by all parties of this use of this technology in the event it is relied upon by the employer, for example as part of a disciplinary process.

A transparent approach will minimise the risks of employees and/or unions seeking to challenge the introduction or use of workplace surveillance, and ensure that such material is given the relevant weight if it is to be used in future proceedings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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