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The award of £15,920 against Michele Mone’s lingerie firm MJM International for ‘bugging’ an employee raises questions about how far employers can go to check on their workforce using covert cameras and listening devices without breaching data protection laws.

Director Scott Kilday walked out of his £55,000 operations director role and filed for unfair dismissal after discovering a plant pot in his office had been bugged.

Following an employment tribunal hearing in Glasgow, Scotland, judges ruled that MJM’s decision to plant the listening device was “likely to destroy or seriously damage the degree of trust and confidence an employee is entitled to have in his employer” and Mr Kilday could "not be expected to put up with it".

MJM claimed they were concerned that Mr Kilday was planning to leave and work with Ms Mone’s ex-husband. However, employment judge Shona MacLean stated that the lingerie giant could have "legitimately taken steps" to "protect its business interests" if it had concerns about Mr Kilday.

This case highlights the dangers that employers can face when monitoring staff particularly as developments in digital technology mean that it has never been easier to snoop on employees in public and in the work place. It is estimated that there are around 1.74 million CCTV cameras in the UK and 30 million in the US which although for the most part are legal, they must not intrude upon a person’s fourth amendment right to privacy.

But just how far can HR managers and employers go to keep tabs on their staff if they suspect them of fraudulent activity? And what steps can be taken to ensure that surveillance does not fall foul of the law?

1. How can employers use covert surveillance without breaching data protection laws?

In the UK, employers can monitor employees through a variety of means and for a number of reasons; for instance they may want to deploy covert methods to check on a member of staff who they believe is on sick leave but is not genuinely ill – and may even be running another business. Or there may be suspicion that an employee is defrauding the company, or involved in an illegal activity.

Before approving covert monitoring, UK employers need to ask themselves:

• Is this an exceptional circumstance and is there a reason to suspect criminal activity or malpractice?

• Will the cameras be used for a specific investigation and will they be removed once it has been completed?

• Would it prejudice the investigation to tell workers that cameras are being used?

• Have you taken into account the intrusion on innocent workers?

• Has the decision been taken by senior management?

In the US, while most camera surveillance is considered legal, they cannot be placed in an area where there is an expectation of privacy, such as a bathroom or a changing room which is the same as the UK.

However, this type of surveillance can become illegal if audio monitoring is taking place without the permission of those being scrutinised because again, the person has the right to  an expectancy of privacy.

2. Is it always appropriate to record what staff are doing?

Under UK law, this can in some cases be appropriate, while in others it isn’t. For instance, if there is a suspicion that items are being stolen from a store room, then it would be acceptable to install CCTV as it will not involve continuous or intrusive monitoring. Also, it is reasonable to keep an eye on what it going on.

However, if an employer suspects that employees are making mobile phone calls during working hours, against company policy, and is planning to install CCTV to monitor them throughout the day; this would be regarded as intrusive and unacceptable.  

Continuous monitoring should only be used in very exceptional circumstances, for instance where hazardous substances are used or failure to follow procedures which could pose a serious risk to life.

3. Do employees need to be told they are being monitored?

Workers should normally be aware that they are being monitored but depending on the circumstances, recording staff can be justified if it is part of a specific investigation.

However, cameras and listening devices should never be installed in areas such as toilets and private offices.

4. Are there any cases where employers have been taken to court for covert monitoring?

An appeal tribunal win by City and County of Swansea Council, which secretly filmed a former employee, gave the green light to employers who might have previously been fearful of covertly monitoring employees for fear of breaching European Law.

The case involved a member of staff playing squash when he should have been working. A private investigator hired by the council filmed him leaving his local sports centre on five separate occasions when he was supposed to be in work.

The employee was sacked for gross misconduct and took his case to an employment tribunal, which originally found in his favour. The first tribunal ruled that the use of covert surveillance infringed his rights to a private life under Article 8 of the European Convention on Human Rights. However, that decision was overthrown by The Employment Appeal Tribunal (EAT) which ruled that the employee lost his right to privacy because he was publically defrauding his employer by playing squash in work time.

Scottish Water was exonerated for videoing an employee coming and going from his home to prove that he had been falsifying his timesheets. Again, the employee forfeited his right to privacy because he was effectively involved in criminal activity.

5. When else can covert surveillance equipment be used?

Another area where monitoring equipment may be used legitimately is when an employer believes that a member of staff who is on sick leave, and being paid, is not actually ill at all and is defrauding the company.

6. Is this the best way of checking on employees?

Employers should approach this kind of monitoring with caution and only use it if they can’t find evidence of wrongdoing through more transparent ways of investigation. Targeted and secret monitoring of an employee can only be justified if an employer has sufficient grounds to suspect criminal activity, serious malpractice or breach of company policies. The surveillance needs to be proportionate to the alleged fraudulent activity the employee is engaged in.

The whole area of what - and who - can monitor is complex and the wrong decision could leave employers exposed in an employment tribunal. Use covert surveillance as the last resort and make sure that you take the right HR and legal advice.

Issued by Quest Public Relations Ltd. Media contacts are Carol Arthur or Sharon Cain on 01423 564192 or via [email protected] or [email protected].