Spooks at Work

Employers have access to a wide range of technology to allow them to observe their staff and record their movements and actions. To a surprisingly large degree, ‘spying’ and gathering information on employees is permissible for legitimate business reasons. The power is immense and largely unfettered. There are, however, some limitations. If you are considering or are already monitoring or watching your workforce, do your employees know? If not, you run the risk of breaching their right to privacy or breaching other Victorian or Commonwealth laws.


Surveillance is permissible if it is carried out in accordance with a policy that has been communicated to employees so that they are aware of and understand that surveillance may be undertaken, and consistent with the laws that apply in that state.

In Victoria the Surveillance Devices Act 1999 (Vic) makes it an offence for an employer to knowingly install, use or maintain a listening, optical, tracking or data surveillance device to conduct electronic surveillance of a ‘private activity’ to which the employer is not a party, without the express or implied consent of each party to the activity.

Private activity is defined to mean an activity carried out in circumstances that may reasonably be taken to indicate that the parties to the activity desire it to be observed only by themselves, such as, for example, when in an office with doors closed. So an employer will be able to conduct surveillance of activity carried on outside, or in circumstances in which the parties to it ought reasonably to expect that it may be observed by someone else. Employees received some further limited protection in the 2006 amendments to the Surveillance Devices Act 1999 (Vic) which prohibit optical surveillance in toilets, washrooms, change rooms or lactation rooms.

Additional Commonwealth legislation also applies. The Telecommunications Interception Act 1979 (Cth) makes it an offence to intercept a telephone call as it occurs without the consent of the parties to the conversation. Stored communications and emails are not covered by this legislation so it has relatively limited application.
There are many aspects of working life that are not covered by the constraints provided in these Acts, and these are largely unregulated. In the absence of clear legislative guidelines, employers are advised to ensure that their policies and procedures fill this gap – clearly articulated guidelines should address the business needs but also balance these against the legitimate privacy interests of their employees.

Why, what and how information is collected

Employers collect information about their employees, usually directly from the employee at the commencement of employment such as application forms, questions asked at interviews, photographs, medical assessments. Once the employment relationship has commenced many workplaces collect more detailed information every day. Modern technology allows unprecedented quantities of information to be gathered such as:

Gathering this information in the first instance will often have a legitimate purpose. For example, a log of all emails and a back up copy kept and stored offsite will be invaluable in the event of a server failure. If, however, misconduct or fraud by one or more employees is suspected, this information will be useful for a secondary purpose as it is possible to review those email logs and backup files to search for evidence of misconduct in a legitimate workplace investigation.

Privacy Issues

Unless care is taken, the largely unfettered power to watch and gather information about your workforce can collide with the privacy rights of your employees. This is often exacerbated by the fact that few employees realise that almost no aspect of their working life is truly private. Once in their office, with their door closed, or while eating lunch in the tearoom, they may conduct themselves as if they are in a relatively private place. They may not realise, or have forgotten that they were told in their induction, that every keystroke, phone call, email and internet search terms may be recorded, stored and available for future search and analysis.

The failure of employees to realise or remember the potential uses to which information about their work activities may be put could give rise to later complaints of breach of privacy or breach of legislation. Privacy is a complicated legal area and we recommend that our clients get advice wherever there are privacy implications. The Federal Privacy Commissioner has issued Guidelines that suggest that when an employer scrutinises its employees, the practice should be made clear to everyone.

How to balance business interests with employee interests

Searching employees’ emails and computer email files is often permissible because these are generally understood to belong to the employer, and the computer equipment has been provided for the purpose of the employees doing their jobs. Surveillance is permissible for legitimate business reasons such as managing performance or investigating fraud or misconduct – although you must get legal advice if you are unsure.

To balance those business interests with employee interests, employees must be expressly informed that their work and email can be subjected to search, surveillance and review. A policy should put employees on notice that they are subject to that right so that they do not later have cause for complaint of breach of privacy. A regular email reminder of the IT use policy, sexual harassment policy and other relevant policies is also a good step to take.

The golden rules to remember are that:

The ability to collect information and watch your employees brings with it responsibilities to avoid the possibility of abuse and misuse. Overuse may impact on productivity, trust and confidence and result in a paranoid and suspicious workplace. Employers following these golden rules should be able to achieve the careful balance of their legitimate business interest in managing their employees’ conduct with their employees’ rights to reasonable privacy in the workplace

Conduct of a Sexual Nature in the Workplace: How should you respond?

When one of your employees raises concerns about sexualised behaviour in the workplace, how can you best respond? A recent Federal Court case about sexual harassment is a good example of what not to do.

In Poniatowska v Hickinbotham [2009] FCA 680, an employer was ordered to pay a former employee, Ms Poniatowska, $463,300, following findings that two employees had sexually harassed Ms Poniatowska and the company had sexually discriminated against her by terminating her employment. The employer’s argument was that Ms Poniatowksa’s employment was terminated for poor performance. However, the judge found that the employer had decided it wanted to be rid of Ms Poniatowska as she refused to tolerate sexual harassment in the workplace.

Ms Poniatowska had complained of several incidents of sexual harassment over a five month period from April to September 2005. Only two of the allegations were found to be proved. One related to a fellow employee sending several emails in which he sought a sexual relationship with Ms Poniatowksa and made a number of sexually explicit comments. The second allegation included a fellow employee sending a photo of a sexual act by SMS to Ms Poniatowska’s mobile phone and a series of phone calls to Ms Poniatowksa. All of the conduct was unwelcome and Ms Poniatowska had communicated this clearly to her colleagues.

Ms Poniatowksa’s complaints were not received with sympathy by her employer and were treated either dismissively or superficially. In contrast, the judge found that the male perpetrators were treated with more sympathy and support than Ms Poniatowska.

The complaint process was made all the more difficult as there were no company policies regarding sexual harassment and discrimination and therefore there was no formal process laid out by which complaints could be made. Two months after her last complaint, Ms Poniatowska was given the first of three written warning letters, ostensibly for issues relating to poor performance. This culminated in a suspension letter in February 2006 and her termination followed on 21 February 2006. Prior to her termination, an investigation was conducted into a complaint made against Ms Poniatowksa, which the judge described as “extraordinarily superficial” and “quite unsatisfactory” and it was noted that Ms Poniatowska had not been provided with a copy of the complaint or given an opportunity to provide her response to it.

The judge said:

“In my judgment, the employer then determined that she was a person who did not “fit” its work environment because she was a female who would not tolerate sexual harassment and the robust work environment. I have found that the employer then gave her the three warning letters and the suspension letter as a means of setting the scene for the termination of her employment. In those processes, as my findings indicate, she was treated differently from the way the employer would have treated a male person….”

The company had, it was found, discriminated against Ms Poniatowksa on the ground of her sex and by reason of this attribute, she was treated less favourably than a man 
in the same or similar circumstances. The company further contravened the Sex Discrimination Act 1984 (Cth) by dismissing her.

As a consequence of her treatment, Ms Poniatowska developed depression and anxiety, an adjustment disorder and also features of post traumatic stress disorder. Despite his assessment that Ms Poniatowksa was likely to fully recover within 2 years, the judge ordered that the unlawful discrimination caused Ms Poniatowksa’s conditions and their consequences and accordingly, her former employer should financially compensate her.

The damages of $463,000 included $90,000 for pain and suffering and $340,000 past and future loss of earning capacity. This is a very significant award for damages. It provides a timely reminder for employers to:

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Integrity Line

Integrity Line is an independent whistleblower service for complaints about inappropriate conduct at work, provided by Worklogic. Click here to visit the Integrity Line website.