Australia: Microchipping employees in Australia: the technological ideal v legal reality

Last Updated: 22 August 2017
Article by Michael Byrnes

Most Read Contributor in Australia, October 2017

Microchipping employees isn't just a technological challenge - the principles relating to "lawful and reasonable" direction need to be considered too.

At first blush, the notion of microchipping employees might sound like a nightmarish scenario from a dystopian science fiction novel. There have, however, been a spate of recent news articles about it, reporting that:

  • One US company microchipped 41 of its 85 employees at a voluntary "chip party" to facilitate employees performing tasks such as logging onto their computers and opening doors.
  • A Swedish company uses its staff members to conduct voluntary trials on the use of implanted microchip technology.
  • A survey by a major professional services firm of 10,000 workers internationally (although not in Australia) found 70% would consider receiving enhancements, such as implants, to improve work performance.

Reports such as those above have promoted a narrative that employee implants are an inevitability and will be close to universal in the near future. The legal dimension of the widespread implementation of this technology (involving more than a few pioneering volunteers) is, however, almost always overlooked. Just because the technology is, or becomes, available doesn't necessarily mean that employers will be able to direct employees to have microchips (or other like technology) implanted.

Microchipping employees: the legal position

Underpinning any consideration of whether an employer will be to compel microchipping is the principle that an employer can only require employees to comply with "lawful and reasonable" directions.

There is no legislation presently in force which specifically prohibits employees being microchipped by employers. (There is, however, legislation that might impact upon the manner in which it is implemented, including workplace surveillance and work health and safety legislation.) The question still remains whether such a direction would be "reasonable". The practical context in which this question would likely arise and be determined is an arbitration before the Fair Work Commission using the dispute settlement procedure in an industrial instrument such as an enterprise agreement.

Balancing liberties and benefit: the example of drug and alcohol testing

Cases of the Commission that have dealt with the important but vexed issue of drug and alcohol testing provide guidance. In those cases there is a balancing act between civil liberties and workplace safety, as reflected in the following passage from Shell Refining (Australia) Pty Ltd, Clyde Refinery v Construction, Forestry, Mining and Energy Union [2008] AIRC 510:

"Neither party in this dispute sought to argue that random testing for drugs (or alcohol) was unjust or unreasonable. However both parties also recognise that random testing is an intrusion on the privacy of the individual which can only be justified on health and safety grounds. The employer has a legitimate right (and indeed obligation) to try and eliminate the risk that employees might come to work impaired by drugs or alcohol such that they could pose a risk to health or safety. Beyond that the employer has no right to dictate what drugs or alcohol its employees take in their own time. Indeed, it would be unjust and unreasonable to do so." [emphasis added]

As the line of authority dealing with drug and alcohol testing demonstrates, the fact a workplace policy entails an intrusion of privacy will not necessarily be an insuperable barrier to its implementation. The Commission has repeatedly upheld employer policies that utilise both urine and saliva testing methods. Drug and alcohol testing is, however, directed at the very serious health and safety risks posed by employees performing work in certain industries (often involving heavy machinery) while under the influence.

Arguing the need for microchipping

This begs the question, if drug and alcohol testing is instrumental in promoting work health and safety in high risk industries, what is the problem or issue that the microchipping of employees is said to address?

Some of the aforementioned articles suggest that the current primary benefit of microchipping is that it might obviate the need for employees to have swipe cards for the workplace. While the requirement to use swipe cards undoubtedly causes some irritation to employees and cost and security risks when they're (almost inevitably) misplaced, it is highly unlikely this alone could provide the basis for a reasonable direction to an employee to be microchipped. In almost all cases it will be far too trivial to justify the significant incursion to liberties mandated microchipping involves.

The other benefit cited (although the technology is not yet at this point) is improvements in performance and stamina by employees. There are, however, chemical enhancements of various kinds already available that arguably have these benefits. While there might, in certain limited circumstances, be a basis to argue that a direction that a substance be digested or injected for safety reasons is reasonable (for example a prescribed medication or vaccination for overseas work travel), a direction to do so to improve productivity is unlikely to be considered "reasonable". As such, to require employees to undergo a surgical procedure (albeit minor) to simply improve performance will also likely be regarded as a step too far.

The best bet for microchipping proponents might be to use one of the arguments often cited in favour of driverless cars: the adoption of the technology could reduce accidents by minimising human error. If microchipping employees can be shown to have substantial safety benefits, and the process of implanting itself can be undertaken in a safe, quick, painless and unobtrusive way, with proper measures to protect privacy, then the legal path might just be cleared to establish the brave new world of employee microchipping as depicted in the media reports.

Any lessons for employers?

Even though technological advancement is happening apace, emboldening and exciting transhumanists, it's likely most employers won't actually need to practically grapple with the issue of microchipping for some time.

That said, it's worth remembering that just because a technological development enables a particular process or innovation to be adopted for employees doesn't mean it automatically can be. Where it is intended that it be mandated, the principles relating to "lawful and reasonable" direction need to be considered. Further, industrial instruments under the Fair Work Act contain a clause requiring workforce consultation where there is a major change that is likely to have a significant effect on employees. Employers will need cogent reasons for implementation.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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