• The use of surveillance by employers
• The current regulatory framework
• Adequacy of current framework
• Options for reform
• Regulation of covert surveillance

7.1 The covert surveillance of employees by employers has emerged as a growing and controversial industrial issue in recent years. In this chapter, we present an overview of the types of covert surveillance practices used by employers and identify the reasons for which increasing numbers of employers are undertaking surveillance of their employees. We also address the specific objections that are levied against the use of surveillance by employers.

7.2 The increase in the use of surveillance by employers and the issues it raises have not gone unnoticed by the law. Since the Commission released its Issues Paper (“IP 12”), the Workplace Video Surveillance Act 1998 (NSW) (“Workplace Video Surveillance Act”) has been enacted and now regulates covert video surveillance of employees in the workplace. This chapter reviews the effect of that Act and provides an overview of the broader regulatory framework. It concludes that the current regulation of covert surveillance in the employment context is inadequate.

7.3 As there is now a statute that directly addresses surveillance in the employment context, we have given significant consideration to whether the deficiencies in the current regulatory regime should be remedied by amending the Workplace Video Surveillance Act or whether the issue is more appropriately addressed within the new framework recommended by the Commission. We have concluded that covert surveillance in the employment context should be addressed as an aspect of the Commission’s proposed legislation. A system of covert surveillance authorisations, permitting employers to undertake covert surveillance of their employees, is proposed in this chapter.

THE USE OF SURVEILLANCE BY EMPLOYERS

Purpose of surveillance

7.4 Various surveillance devices are commonly used for a number of purposes. These are discussed in more detail below. By way of a general overview, these purposes can be summarised as follows:

to ensure productivity and competitiveness; to allow for quality control and customer service; to comply with laws and regulations; to assist in training and supervision; to ensure a safe and secure workplace; and to protect employer property and assets.¹

Video

7.5 The video camera is one of the most commonly used surveillance devices in the workplace.³ As the cost of video surveillance equipment has fallen, this form of surveillance has become affordable to all but the smallest businesses⁴ and, indeed, is now a standard feature of security systems in premises which have a high risk of theft or damage.⁵ At the time of the release of the Privacy Committee’s Report, Invisible Eyes, it appeared that, compared to other industrialised nations, Australia spent substantially more money per capita on video surveillance equipment.⁶

7.6 Video surveillance is used primarily as security against theft, vandalism or unauthorised intrusion.⁷ As a form of security, a video surveillance system can be significantly cheaper than a professional security guard.⁸ According to the Retail Traders’ Association of New South Wales, “employers have a fundamental right to protect their property at all times and hence should be able to make use of visual surveillance equipment to achieve this”.⁹ A further use of video surveillance is to monitor employee-related matters such as breaches of occupational health and safety procedures, and general performance.¹⁰

Telephone

7.7 Telephone-based surveillance is another traditional and still commonly used form of surveillance.¹¹ In the workplace, telephone-based surveillance takes two forms: telephone call accounting and service observation. Telephone call accounting is a form of surveillance that records the time, length and destination of telephone calls. The primary purpose of telephone call accounting is as a business tool to allocate costs,¹² but it is also used by employers as a means of monitoring the number of personal calls made by employees.¹³ Service observation is a more intrusive form of telephonic surveillance as it entails listening in on telephone conversations between employees and customers or other third parties. It is commonly used by telemarketing companies, airlines and in other areas where telephone operators work.¹⁴ Service observation can be used to check if employees are adhering to customer service policies,¹⁵ to monitor the number of calls handled and time taken per call,¹⁶ and as a training device.¹⁷

Computer

7.8 Computer-based monitoring is an increasingly common form of surveillance in the workplace.¹⁸ As the number of employees using computers has increased, so too has the prevalence of computer-based monitoring. A standard form of computer-based surveillance is monitoring the performance of employees, such as data entry operators, who spend the majority of their work time on a computer.¹⁹ The devices used are capable of tracking the number of keystrokes per minute, error rate, time taken to complete each task and time spent away from the computer.²⁰ The information obtained can be used by supervisors for a number of reasons including to monitor speed and accuracy, to determine pay rates and to discipline for failure to perform at the required standard.²¹

7.9 In addition to performance or productivity monitoring, computer-based monitoring can involve an employer having the ability to access all the files on an employee’s computer.²² Some technology even enables an employer to watch an employee’s screen as he or she works.²³ Associated with access to the contents of an employee’s hard drive is the technological potential for employers to monitor an employee’s e-mail and internet usage.²⁴ The key reasons cited by employers for monitoring internet and e-mail usage are diminished productivity,²⁵ potential legal liability²⁶ and information theft.²⁷

Tracking devices

7.10 The final commonly used form of surveillance in the workplace is tracking devices. These can take the form of ID cards with imbedded microchips,²⁸ swipe cards²⁹ or devices attached to vehicles. The central purpose of tracking devices is to identify the physical location or movements of employees.

Objections to covert surveillance

7.11 As outlined above, covert surveillance of employees can be a highly effective business tool and can be used for a range of positive purposes, such as ensuring a safe workplace. However, these benefits must be balanced against the detrimental effects on employees.

7.12 As in the case of surveillance generally, surveillance in the employment context has serious privacy implications. Although the surveillance may be intended to capture only work-related matters, even narrowly focussed surveillance has the potential to intercept personal information or activity.³⁰ For example, covert video surveillance designed as a security measure may capture images of an employee engaged in a private activity such as scratching a body part.³¹ Even where only work-related matters are caught by surveillance, there are still broad issues of workers’ autonomy and dignity, matters inherent in the concept of privacy.

7.13 In addition to the impact of workplace surveillance upon an employee’s privacy, the privacy implications extend to third parties with whom employees may communicate or who may be physically present at a location that is under surveillance. For example, listening-in on telephone calls or reading e-mails has implications for the privacy of the non-employee participant.³² Similarly, CCTV cameras installed, for example, in a service station to ensure employee safety will inevitably capture images of customers.

7.14 A final objection to the use of surveillance by employers is based on its potentially discriminatory impact. This impact becomes clear when consideration is given to labour market segregation; for example, as women and ethnic minorities tend to predominate in monitored jobs, they are monitored at a disproportionately high rate.³³ A further way in which surveillance can have a discriminatory impact is through its capacity to target certain individuals or groups, such as union members.³⁴

THE CURRENT REGULATORY FRAMEWORK

7.15 General legislation regulating surveillance, such as the Listening Devices Act 1984 (NSW) (“LDA”), is equally applicable in the employment context. In this chapter, consideration is given to those means of regulation specific to the employment context.

The Workplace Video Surveillance Act 1998 (NSW)

7.16 The Workplace Video Surveillance Act commenced operation on 1 February 1999. The object of the Act is to regulate the covert video surveillance of employees in the workplace by their employers. It applies to both public and private sector employers.³⁵ At the time the Workplace Video Surveillance Act was enacted, video surveillance in the workplace was completely unregulated. However, a number of industrial disputes regarding employee surveillance had highlighted the need for regulation of what had become a prominent industrial issue.³⁶ In coming to the approach adopted in the Act, the Government aimed to strike an appropriate balance between the competing interests of employers and employees.³⁷ The Workplace Video Surveillance Act approach follows extensive consideration of the issue of video surveillance in the workplace by the Privacy Committee of New South Wales³⁸ and the Working Party on Video Surveillance in the Workplace.³⁹

Threshold elements

7.17 The Workplace Video Surveillance Act only applies to surveillance that is:

• covert;
• carried out by video;
• of an employee;
• by an employer; and
• undertaken in the workplace.

Meaning of “covert surveillance”

7.19 Under the Workplace Video Surveillance Act, surveillance is presumed to be covert and will only escape being classified as covert if:

• an employee has been notified in writing of the intended video surveillance at least 14 days in advance;
• the cameras or other parts of equipment are clearly visible; and
• signs notifying people that they may be under surveillance are clearly visible.⁴⁰

Undertaking covert video surveillance

7.21 The Workplace Video Surveillance Act establishes strict criteria for the use of covert video surveillance in the workplace. Covert video surveillance is only permitted if:

• it is carried out solely for the purpose of establishing whether or not an employee is involved in any unlawful activity in the workplace; and
• it is authorised by a covert surveillance authority, issued by a Magistrate.⁴¹

7.23 An application for a covert surveillance authority must provide detailed information such as the grounds for suspecting that a particular employee is involved in unlawful activity and whether other investigative procedures have been undertaken to detect the unlawful activity.⁴⁴ In order to issue an authority, a Magistrate must be satisfied that the application shows that reasonable grounds exist to justify its issue.⁴⁵ The Magistrate is also expressly required to consider the privacy implications of the proposed surveillance.⁴⁶ Should an employer wish to undertake surveillance in a recreation or meal room, the Magistrate must consider the employees’ heightened expectations of privacy.⁴⁷

Offences

7.24 An employer who undertakes covert video surveillance otherwise than for the permitted purpose and without the requisite authority commits an offence, for which significant monetary penalties apply.⁴⁸

7.25 It is also an offence to use a recording obtained by surveillance, which was authorised by a covert surveillance authority, for an “irrelevant purpose”.⁴⁹ A purpose will be irrelevant if it is not related to the detection of unlawful activity, to other associated matters such as taking disciplinary action or legal proceedings or to taking any other action authorised by the Workplace Video Surveillance Act. This offence reinforces the prohibition regarding performance monitoring as it prevents an employer using a recording as the basis for performance-related dismissal or other similar matters.

Industrial relations legislation

7.26 The primary industrial relations statute in New South Wales is the Industrial Relations Act 1996 (NSW) (“IRA”), with its federal counterpart being the Workplace Relations Act 1996 (Cth) (“WRA”). Neither of these Acts expressly regulates surveillance or privacy in the employment context. However, they do provide the potential for covert surveillance of employees by employers to be regulated indirectly.

An industrial matter

7.27 The surveillance of employees in the workplace is listed as an example of an “industrial matter” in section 6(2)(j) of the IRA. Accordingly, surveillance can be the subject of negotiations regarding employment conditions, addressed in awards and enterprise agreements. As an industrial matter, surveillance may form the basis of an industrial dispute, which can be arbitrated by the NSW Industrial Relations Commission.

7.28 Under the WRA, only “allowable award matters” can be included in an industrial dispute, which can be addressed by the Australian Industrial Relations Commission by way of arbitration or an award.⁵⁰ Surveillance is not listed as an allowable award matter. However, section 89A(7) does permit an “exceptional matter” to be included in an industrial dispute. While this creates the possibility that surveillance could be the subject of an industrial dispute, stringent criteria must be met before a matter will qualify as “exceptional”.

7.29 Despite not being an allowable award matter at a federal level, surveillance can, of course, be a negotiated condition of a certified agreement or an Australian Workplace Agreement under the WRA.

Unfair dismissal

7.30 Under the WRA and the IRA, employees are able to apply for relief in respect of a dismissal that was harsh, unjust or unreasonable.⁵¹ Relief is potentially available where the dismissal is based on evidence collected using surveillance. However, at both state and federal level, relief for unfair dismissal is only available to a limited range of persons.⁵²

7.31 Determination of an unfair dismissal claim is a discretionary exercise and each case is considered in light of its own particular circumstances.⁵³ However, both the IRA⁵⁴ and WRA⁵⁵ set out a number of matters that the NSW Industrial Relations Commission or the Australian Industrial Relations Commission must take into account in determining a claim. Those matters likely to be relevant to a claim for unfair dismissal where the dismissal was based on evidence collected using surveillance are those pertaining to procedural fairness:

• whether a reason for the dismissal was given to the applicant;
• if a reason was given, whether it had a basis in fact;
• whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour; and
• whether a warning of unsatisfactory performance was given before the dismissal.

7.33 However, procedural unfairness does not necessarily render a dismissal unfair. As noted above, whether the use of an unfair procedure renders a dismissal harsh, unjust or unreasonable depends on the whole of the circumstances. Indeed, where serious misconduct is involved, such behaviour can outweigh even substantial procedural unfairness. For example, in Wang and Others v Crestell Industries Pty Ltd and Another,⁵⁷ the clear video evidence of theft of products from the employer’s factory was sufficient to outweigh the lack of any reason or explanation being given for the dismissal, the failure to provide the employees with an opportunity to explain their conduct or make out a defence and the lack of any previous warnings indicating the consequences of the conduct, the type of which led to dismissal.

7.34 Under the New South Wales legislation, the primary remedy for an unfair dismissal is reinstatement.⁵⁸ If it is impractical for the applicant to be reinstated to his or her former position, then the NSW Industrial Relations Commission may order that they be re-employed in a different, suitable position.⁵⁹ The Commonwealth Act’s approach is to provide for reinstatement or re-employment as equally available remedies.⁶⁰ In both Acts, should neither reinstatement nor re-employment be appropriate remedies, then the applicant may be awarded compensation.⁶¹

Employment contracts

7.35 For those employees not covered by an award or other similar industrial instrument, or by the statutory unfair dismissal provisions, any regulation of surveillance depends upon the express and implied terms of their employment contract. Employees may be able to negotiate a contractual provision regulating the use of surveillance by their employer. As a safeguard over this contractual freedom, the NSW Industrial Commission has the power to declare a contract void or varied, on the basis that it is unfair.⁶² One of the grounds on which a contract may be defined as unfair is that it is unfair, harsh, unconscionable or against the public interest.⁶³ While there is no authority on the point that we are aware of, we consider that certain contractually agreed uses of surveillance could be considered to render a contract unfair.

7.36 In addition to express contractual provisions, certain provisions are implied in any contract of employment by operation of the common law. The historical roots of the employment contract in the master/servant relationship are clearly reflected in the nature of these implied common law duties and obligations.⁶⁴ For example, while an employee owes a duty to obey orders, an employer owes a duty to provide work. A restriction on the use of surveillance does not sit easily with the general tenor of the common law duties. However, a possible source of control on the use of surveillance is the term implied in employment contracts that an employer will not unreasonably damage or destroy the relationship of trust and confidence between employer and employee.⁶⁵ The Full Court of the Industrial Relations Court of Australia has identified the purpose of this implied term as being “to protect the employee from oppression, harassment and loss of job satisfaction”.⁶⁶ Use of covert surveillance by an employer could implicate this purpose.

ADEQUACY OF CURRENT FRAMEWORK

7.37 The enactment of the Workplace Video Surveillance Act was a significant step towards addressing the issue of covert surveillance in the employment context. However, the restriction of that Act’s provisions to video surveillance renders it clearly inadequate to address the broad issue of employee surveillance. Prevalent surveillance practices, such as telephone call accounting or e-mail monitoring, remain unregulated.

7.38 The negotiation of employment conditions, either at a collective or individual level, is one way in which the lacunae in the Workplace Video Surveillance Act can currently be addressed. However, in the view of the Commission, serious questions must be asked about the desirability of leaving surveillance to be addressed as a negotiable condition of employment. One obvious concern is the inequality of bargaining power between employee and employer that often exists. This inequality is potentially exacerbated by the abstract nature of privacy interests. For example, it is easier to negotiate over a pay increase than over a level of privacy.⁶⁷ A further concern is that any bargaining process may not be an informed one, if employers are not required to disclose their surveillance practices.⁶⁸ In addition to these practical concerns, there is the issue of whether it is appropriate to reduce a fundamental interest, such as privacy, to a bargaining issue.⁶⁹

7.39 Unfair dismissal relief is an additional, albeit indirect, way in which surveillance of employees is currently regulated. A key concern with this form of regulation is the lack of comprehensive coverage and the fact that it only addresses surveillance once it has occurred, rather than preventing unacceptable use of surveillance from the outset. As an example of coverage concerns, reliance on unfair dismissal provisions to address procedurally unfair use of surveillance would leave the 23% of Australians who are employed on a casual basis⁷⁰ with no protection.⁷¹ Such a situation is clearly unsatisfactory.

7.40 The current regulatory framework does not provide comprehensive regulation of surveillance by employers. Many forms of surveillance are, at best, only indirectly regulated. Furthermore, in order to trigger the indirect protection of industrial remedies such as relief against unfair dismissal, extreme circumstances must be involved. The Commission considers that it is inappropriate for a matter of fundamental importance, such as personal privacy, to be addressed in such a piecemeal and indirect manner. In accordance with its status, employee privacy should be protected as a matter of course, rather than only gaining protection in circumstances of extreme violation.

7.41 On a more practical note, the vagaries of the current regulatory system are intolerable for both employer and employee. Employers are often unable to obtain confirmation of the legality of their surveillance procedures and employees have no certain basis upon which to challenge an aspect of their workplace surveillance policy. In the view of the Commission, the requisite certainty can only emerge from a legislative model.

OPTIONS FOR REFORM

7.42 The Commission considers that there are two possible approaches to achieving comprehensive regulation of covert surveillance in the employment context:

(a) amend the Workplace Video Surveillance Act; or

(b) integrate the employment context into the general framework proposed by the Commission, creating separate provisions, where necessary.

A similar expectation of privacy?

7.43 A significant issue in determining the appropriate option for reform is whether or not expectations of privacy in an employment context correspond substantially to expectations of privacy in general. If it is determined that expectations of privacy in an employment context are fundamentally different, then it will be inappropriate to merge regulation of surveillance in employment with the general framework.

7.44 While it is generally accepted that individuals have a privacy expectation in their homes or walking down the street, the concept of an expectation of privacy does not easily translate into the workplace. Some commentators have argued that an employee, who uses the employers’ premises, resources and time,⁷² and who must accept some form of supervision,⁷³ cannot have a reasonable expectation of privacy. Indeed, it must be expected that an employer will watch the activities of employees and monitor performance.

7.45 The Commission rejects the argument that employees leave behind any expectation of privacy at the office door. Acceptance of that argument necessarily translates privacy into a property, rather than personal interest. If privacy is viewed as a property interest, then its applicability will vary depending upon the physical location of an individual. In the Commission’s view, this cannot be correct. In this regard, we support the view of the Privacy Committee that the right to privacy is a personal right, which does not appear or disappear based on a person’s geographical location.⁷⁴ To similar effect, the Australian Privacy Commissioner has stated that “it is clear that most staff do not expect to completely sacrifice their privacy while at work”.⁷⁵

Third parties

7.46 Having established that expectations of privacy are not fundamentally different in the employment and non-employment contexts, it becomes apparent that both reform options are possible. A matter that impacts on whether we integrate employment surveillance into the general regime is third party interests. As was noted above, at paragraph 7.13, third parties are often inadvertently affected by employment surveillance through communicating with an employee or being present in another persons’ workplace. Accordingly, when an employer undertakes surveillance of an employee, that employer will often also be undertaking surveillance of a third party. This dual privacy implication will necessarily exist in surveillance of workplaces such as shops or restaurants. Indeed, unintentional surveillance of third parties will be unavoidable in many situations. Accordingly, rather than isolating surveillance of employees as an industrial issue, the Commission considers that it should, to the maximum extent possible, be regulated consistently with other forms of surveillance. While it is recognised that some employment specific provisions will be necessary, the fundamental framework should be the same, irrespective of whether surveillance is of an employee or a member of the public.

Recommendation 57

Surveillance in the employment context should be addressed as part of the general framework proposed by the Commission, with the creation of employment specific provisions where necessary.

7.47 An existing model for the regulation of covert surveillance is the Workplace Video Surveillance Act. Although its applicability is limited to video surveillance, the Commission considers that the basic authorisation framework can apply equally in respect of all forms of surveillance devices. In proposing that the Workplace Video Surveillance Act form the basis of our recommendations for the regulation of covert surveillance in the employment context, we are cognisant of the substantial consultation and consideration that occurred in its gestation.⁷⁶ However, in certain respects, deviation from the Workplace Video Surveillance Act approach will be necessary to ensure that the system for authorising covert surveillance in the employment context is as similar as possible to those applicable to the public interest and law enforcement areas. We are of the view that this similarity is desirable as it will enable a consistent jurisprudence to be developed across the three areas of covert surveillance. Furthermore, as the same basic framework and concerns inform all three areas, it is appropriate that this fundamental similarity is reflected in the authorisation systems.

Permitted purpose

A general ability to undertake covert surveillance?

7.48 A view expressed by employer groups is that employers should be able to undertake covert surveillance in a broad range of circumstances in the exercise of a right to protect their business interests.⁷⁷ Covert surveillance is cited as a particularly effective means of detecting unlawful activity such as fraud or theft.⁷⁸ The Commission acknowledges that employers have a legitimate interest in ensuring a productive and efficient business, but further considers that there must be controls on what conduct is permitted in the pursuit of this interest. Indeed, the law places many limits upon what is acceptable conduct by an employer.⁷⁹ For example, anti-discrimination laws and occupational health and safety provisions impose external obligations and conditions upon employer conduct. Such obligations and conditions are based on the protection of fundamental employee interests. The Commission considers that restricting an employer’s ability to undertake covert surveillance of an employee is a similarly justified limitation, based as it is on protecting an employee’s interest in personal privacy.

7.49 In coming to the view that the protection of employee privacy requires restriction of an employer’s ability to undertake covert surveillance, the Commission should not be taken as considering that employee privacy is an absolute right or interest. Rather, as in the case of anti-discrimination protections, limitations can be imposed on an employee’s privacy interest where sufficient justification exists. Given the fundamental importance of personal privacy, the Commission considers that utilitarian or cost-benefit justifications are insufficient to merit the severe invasion represented by covert surveillance.⁸⁰ However, we do consider that suspicion of unlawful activity or serious misconduct justifying summary dismissal constitute a justifiable limitation on employee privacy. These justifications are discussed in greater detail below.

Is surveillance distinguishable from supervision?

7.50 In addition to the general argument outlined above, we note the existence of a specific argument that surveillance of employees is a form of supervision and, accordingly, should not be regulated. This argument draws on the fact that supervision and monitoring of employees is not a new phenomenon; supervisors have always watched employees⁸¹ and surveillance devices, although not as technologically sophisticated as those used today, have been a common feature of employment for over a century. For example, devices attached to typewriters for counting keystrokes were used in the early 1900s.⁸² According to this line of thinking, surveillance is merely an extension of the traditional supervisory relationship that is inherent in an employment situation. As such, it is a justifiable intrusion into employee privacy.

7.51 The Commission acknowledges that some degree of supervision is acceptable in employment. However, we disagree that surveillance undertaken by technology equates to traditional forms of supervision, undertaken by another individual. The capacities of modern forms of surveillance render it far more intrusive than traditional supervision; for example, video cameras have powerful zoom mechanisms⁸³ and new technologies make possible continuous, unseen monitoring.⁸⁴ Furthermore, in the case of many forms of surveillance, a permanent, reproducible record of an individual’s activities and behaviour is created.⁸⁵ The level of intrusion made possible by surveillance devices clearly, in the Commission’s opinion, distinguishes it from traditional forms of supervision. It is accordingly appropriate to subject surveillance to more stringent regulation.

Suspicion of unlawful activity

7.52 In accordance with the approach adopted in the Workplace Video Surveillance Act, the Commission considers that an employer should be permitted to conduct covert surveillance of an employee where unlawful activity is suspected. Where the unlawful activity is suspected to be occurring other than on work premises, it must be employment-related; this requirement flows from the definition of the employment context.

7.53 In coming to this conclusion, we have given consideration to the view expressed in submissions that employers should not be undertaking covert surveillance in any circumstances.⁸⁶ According to certain proponents of this view, should unlawful activity be suspected, then surveillance is appropriately a matter for a law enforcement agency.⁸⁷ While this approach certainly protects employees from unreasonable intrusions into their personal privacy, the Commission is concerned that it fails to accommodate employers’ legitimate interest in addressing unlawful activity on work premises or otherwise employment related. We agree that, in theory, an employer should be able to request police assistance if unlawful activity is suspected. However, where the activity is not occurring on a large scale, the police may well be unable to allocate limited surveillance devices or time to conducting a comprehensive investigation.⁸⁸ It seems unreasonable to prevent employers addressing unlawful activity in such circumstances.

Suspicion of serious misconduct justifying summary dismissal

7.54 We have given significant consideration to the question of whether there should be any further basis upon which an employer may be permitted to undertake covert surveillance of an employee. We recommend that the criteria for undertaking covert surveillance be extended to include a reasonable suspicion of serious misconduct justifying summary dismissal. Here, we are drawing on the common law power of employers to summarily dismiss an employee whose misconduct justifies the employer in treating the employment contract as at an end.⁸⁹ This additional justification would encompass behaviour such as falsifying time records⁹⁰ and other forms of serious misconduct. Its availability will depend on both the particular employment relationship involved and the relevant conduct.⁹¹

Recommendation 58

An employer is only entitled to obtain a covert surveillance authorisation if:

(a) unlawful activity on work premises is reasonably suspected;

(b) employment-related unlawful activity is reasonably suspected; or

(c) serious misconduct justifying summary dismissal is reasonably suspected.

7.55 It is implicit in the above discussion that the Commission is of the view that performance monitoring is not in itself an acceptable purpose of covert surveillance. This view was shared by the majority of submissions that expressed a view on this specific issue.⁹² While we consider that performance monitoring is an unacceptable use of covert surveillance, we are also aware that surveillance installed for a completely separate purpose may often indirectly result in a degree of performance monitoring. To ensure that this function creep is controlled to the greatest extent possible, we recommend that the Workplace Video Surveillance Act prohibition on the use of covert surveillance to undertake performance monitoring be carried into the new legislation.

7.56 We do not consider that such a prohibition would preclude employers from monitoring an aspect of an employee’s performance, where the purpose of the monitoring was to detect unlawful activity or conduct justifying summary dismissal.

Recommendation 59

There should continue to be an express prohibition on the use of covert surveillance by employers for the purpose of monitoring employee performance.

7.57 In IP 12, the Commission raised the issue of whether surveillance should be permitted in certain areas such as toilets and change rooms. The basis of identifying these areas as requiring particular consideration was the heightened expectation of privacy that employees would have in such areas. The current approach of the Workplace Video Surveillance Act is that surveillance is not permitted in any change room, toilet facility, shower or other bathing facility.⁹³ Surveillance is, however, permitted in a recreation room, meal room or other similar area where employees are not directly engaged in work. The heightened expectation of privacy in such areas is addressed by a requirement that the Magistrate must have regard to the employees’ heightened expectation of privacy.⁹⁴

7.58 A number of submissions that expressed a view on this issue considered that surveillance should not be permitted in areas such as toilets and change rooms.⁹⁵ Such surveillance practices were viewed by some as being an abuse of covert video surveillance.⁹⁶ However, certain submissions conversely stated that there should not be a blanket prohibition and that scope should be retained for employers to undertake covert surveillance in these areas.⁹⁷

7.59 In view of the extremely intrusive nature of carrying out covert surveillance in areas where employees would reasonably expect to have a very high degree of privacy, the Commission has concluded that the prohibition on surveillance in toilets, showers and change room should be retained. Should employers consider that there is a need to undertake surveillance in these areas, the appropriate approach is for a law enforcement agency to become involved.

Recommendation 60

Covert surveillance of employees by employers in toilets, showers and change rooms should be prohibited.

Recommendation 61

When considering an application by an employer for a covert surveillance authorisation that will involve surveillance in recreational or meal rooms, regard must be had to the employees’ heightened expectation of privacy.

7.61 Under the Workplace Video Surveillance Act, Magistrates have responsibility for considering applications for covert surveillance authorities. The Commission recommends that this responsibility be moved from Magistrates to Industrial Magistrates and Judicial Members of the Industrial Relations Commission. As the fundamental basis of providing a separate authorisation regime for surveillance by employers is the industrial dimension, it seems appropriate that Industrial Magistrates and the Judicial Members of the Industrial Relations Commission are the issuing authority. We recommend that the function of determining applications by employers for covert surveillance authorisations be restricted to judicial officers for the reasons outlined in relation to warrants in Chapter 5.¹⁰⁰

7.62 We note that the Registered Clubs Association of NSW considers that it would be inappropriate for the Industrial Relations Commission to have responsibility for authorisations, as it would be the body handling any disputes that might arise out of the surveillance.¹⁰¹ In the view of the Commission, this situation would be no different from that where the Industrial Relations Commission must address a dispute arising from an award it has made or an enterprise agreement it has approved.

Recommendation 62

Applications by employers for covert surveillance authorisations should be determined by an Industrial Magistrate or a Judicial Member of the Industrial Relations Commission.

7.63 Under the Workplace Video Surveillance Act, detailed information must be provided in an application for a covert surveillance authority. We consider that the level of information required is sufficiently detailed to enable the issuing authority to make an informed determination.

Recommendation 63

The current provisions governing an application by an employer for a covert surveillance authority should be continued. Accordingly, an application by an employer for a covert surveillance authorisation must be in writing, supported by an affidavit, and contain the following information:


(a) the grounds the employer or employer’s representative has for suspecting that a particular employee is or employees are involved in unlawful activity or serious misconduct;

(b) whether other managerial or investigative procedures have been undertaken to detect the unlawful activity or serious misconduct and


if so, what was the outcome;

(c) who and what will regularly or ordinarily be in view of the cameras;

(d) the dates and times during which the covert surveillance is proposed to be conducted; and

(e) the licensed security operator who will oversee the conduct of the covert surveillance operation.


The issuing authority should have the power to seek further information.

7.64 Section 13(1) of the Workplace Video Surveillance Act specifies that, in order to grant a covert surveillance authority, a Magistrate must be satisfied that the application shows that reasonable grounds exist to justify its issue. We consider that this requirement should be expanded to require that the issuing authority must have regard to the matters listed in the application and be satisfied that the application shows that reasonable grounds exist to justify its issue.

7.65 An additional requirement in the Workplace Video Surveillance Act is that a Magistrate must have regard to whether covert video surveillance of the employee or employees concerned might unduly intrude on their privacy or the privacy of any other person.¹⁰² In the view of the Commission, such an express direction to consider the privacy implications of any proposed covert surveillance is essential. This is particularly so in respect of the requirement to consider whether the covert surveillance might unduly intrude on the privacy of a third party, as there is the potential concern that placing authorisation responsibility with Industrial Magistrates and Judicial Members of the Industrial Relations Commission would cause the industrial dimension to dominate the consideration process. A matter of particular concern is that a predominantly industrial focus may preclude or minimise consideration of the impact of the surveillance on third parties, such as customers or persons with whom employees communicate. This is certainly a significant concern, as a central reason for addressing the issue of employment surveillance within a general surveillance context is the potential impact on third party privacy interests. The Commission recommends that this concern be addressed by the inclusion of a provision directing the issuing authority to give specific consideration to the privacy interests of third parties when considering applications for a covert surveillance authorisation.

7.66 We note the recommendation above that when considering an application for a covert surveillance authorisation that will involve surveillance in recreational or meal rooms, the issuing authority must have regard to the employees’ heightened expectation of privacy. This requirement should form part of the provisions governing the granting of an authorisation.

Recommendation 64

In determining whether to grant an authorisation to conduct covert surveillance in the employment context, the issuing authority must have regard to:

(a) the matters listed in the application;

(b) the extent to which the privacy of an employee or employees is likely to be affected; and

(c) the extent to which the privacy of a third party or third parties is likely to be affected.

When considering an application by an employer for a covert surveillance authorisation that will involve surveillance in recreational or meal rooms, the issuing authority must have regard to the employees’ heightened expectation of privacy.

The issuing authority must be satisfied that the application shows that reasonable grounds exist to justify its issue.

7.67 Under the Workplace Video Surveillance Act, a covert surveillance authority must specify the purpose for which it authorises the carrying out of the covert video surveillance and the licensed security operator who is to oversee the conduct of the surveillance operation.¹⁰³ The Commission considers that the contents of the authorisation should be more detailed, for the reasons given in respect of warrants for law enforcement officers and public interest authorisations.¹⁰⁴

Recommendation 65

An authorisation permitting covert surveillance in the employment context should specify:

(a) the purpose for which the authorisation is granted;

(b) the licensed security operator who is to oversee the conduct of the surveillance;

(c) where practicable, the name of any person who is to be the subject of surveillance;

(d) the period (being a period not exceeding 30 days) during which the authorisation may be in force;¹⁰⁵

(e) that the surveillance device(s) may be repaired, tested, moved, maintained, replaced and/or retrieved during the period that the authorisation is in force;

(f) if practicable, the premises on which the surveillance device(s) are to be installed or used;

(g) the type(s) and number of surveillance device(s) to be used;

(h) any conditions on the use of the surveillance device(s);

(i) any conditions on the use, release or publication of any information obtained as a result of the use of the surveillance device(s);¹⁰⁶ and

(j) the time within which the person authorised to use the surveillance device(s) is required to report to the issuing authority and the Attorney General.¹⁰⁷

7.68 As with public interest authorisations, authorisation for covert surveillance in the employment context should be obtained prior to its commencement. However, in some circumstances, it may not be possible for an employer to obtain an authorisation before engaging in covert surveillance. For example, an employer may reasonably suspect misconduct such as tampering with machinery, which could pose a health risk to other employees and/or third parties. In such a situation, it would be justifiable to commence surveillance as soon as possible. The Commission considers that such justifiable situations will be rare.

Recommendation 66

Where covert surveillance in an employment context is commenced prior to obtaining authorisation, the employer must apply for authorisation as soon as practicable following the commencement.

An application for retrospective authorisation must specify why covert surveillance was commenced prior to obtaining an authorisation.

2. We note that all of the types of surveillance discussed below can be undertaken covertly and/or overtly.

3. Privacy Committee of New South Wales, Invisible Eyes: Report on Video Surveillance in the Workplace (Report 67, 1995) at 13.

4. Privacy Committee (1995) at 16. However, the Commission notes that the Chamber of Manufactures of NSW (Industrial) considers that the cost of video surveillance makes its usage practicable only for larger employers: Submission at 5-6.

5. Privacy Committee (1995) at 24.

6. Privacy Committee (1995) at 1.

7. Privacy Committee (1995) at 24.

8. Privacy Committee (1995) at 25.

9. Retail Traders’ Association of NSW, Submission at 10.

10. Privacy Committee (1995) at 31 and 35.

11. It should be noted that the covert interception of telephone calls during their passage across a telecommunications system is governed by the Telecommunications (Interception) Act 1979 (Cth): see para 1.40.

12. H Metz, “They’ve Got Their Eyes on You” (1994) Student Lawyer 22 at 24.

13. D Braue, “Every Breath You Take” The Bulletin (25 January 2000) at 64; J Flanagan, “Restricting Electronic Monitoring in the Private Workplace” [1994] 43 Duke Law Journal 1256 at 1259.

14. M Greenbaum, “Introduction” Part I of “Employee Privacy, Monitoring and New Technology” Chapter 6 of Arbitration 1988: Proceedings of the Forty-First Annual Meeting of the National Academy of Arbitration (Bureau of National Affairs, Washington, DC, 1989) at 164.

15. Flanagan at 1260.

16. Greebaum at 164.

17. C Puplick, Privacy Commissioner of NSW, “The total workplace: A human rights perspective” Address to Employment and Industrial Law Specialists Conference (26 August 1999) «http://www.lawlink. nsw.gov.au/adb.nsf/pages/workplace».

18. A Westin, “Privacy in the Workplace: How Well Does American Law Reflect American Values” [1996] 72 Chicago-Kent Law Review 271 at 277.

19. K Jenero and L Mapes-Riordan, “Electronic Monitoring of Employees and the Elusive ‘Right to Privacy’” (1992) 18(1) Employee Relations Law Journal 71 at 73; Metz at 24.

20. Metz at 24; Greenbaum at 164.

21. Greebaum at 164.

22. Metz at 24; L Kearley, “Computer-Based Surveillance” (1997) 2(8) Privacy Files 5 at 5.

23. Metz at 24; Kearley at 5.

24. Refer to ch 2 for a fuller discussion of e-mail and internet monitoring.

25. NetComm, an Australian modem maker, estimates that the internet is responsible for $1 billion a year in lost productivity: M Bryan, “Every step you take, every move you make” Australian Financial Review (4 March 2000) at 27.

26. See performance monitoring discussion in ch 3.

27. Bryan at 27.

28. Kearly at 5.

29. M Ford, Surveillance and Privacy at Work (Institute of Employment Rights, London, 1998) at 11.

30. Flanagan at 1262.

31. Privacy Committee (1995) at 41.

32. A Westin, “Monitoring and New Office Systems” Part II of “Employee Privacy, Monitoring and New Technology” Chapter 6 of Arbitration 1988: Proceedings of the Forty-First Annual Meeting of the National Academy of Arbitration (Bureau of National Affairs, Washington, DC, 1989) at 168.

33. ILO (1993) at 12.

34. For example, swipe cards that can identify individual employees can be used to monitor which employees attend a union meeting, if the meeting is held in a part of the building that requires swipe card access.

35. Special provision is made for prisons, casinos, police and the courts: Workplace Video Surveillance Act 1998 (NSW) s 7(2).

36. New South Wales, Parliamentary Debates (Hansard) Legislative Council, 26 May 1998 at 5087.

37. New South Wales, Parliamentary Debates (Hansard) Legislative Council, 26 May 1998 at 5088.

38. Privacy Committee (1995).

39. Working Party on Video Surveillance in the Workplace, Report to the Hon J W Shaw QC MLC Attorney General and Minister for Industrial Relations (NSW Department of Industrial Relations, Sydney, December 1996).

40. Workplace Video Surveillance Act 1998 (NSW) s 4(1).

41. Workplace Video Surveillance Act 1998 (NSW) s 7(1).

42. Workplace Video Surveillance Act 1998 (NSW) s 9(3)(a).

43. Workplace Video Surveillance Act 1998 (NSW) s 9(3)(b).

44. Workplace Video Surveillance Act 1998 (NSW) s 10(2).

45. Workplace Video Surveillance Act 1998 (NSW) s 13(1).

46. Workplace Video Surveillance Act 1998 (NSW) s 14.

47. Workplace Video Surveillance Act 1998 (NSW) s 13(2).

48. Workplace Video Surveillance Act 1998 (NSW) s 7(1) (subject to the limited exceptions in s 7(2) and 7(3)).

49. Workplace Video Surveillance Act 1998 (NSW) s 8.

50. Workplace Relations Act 1996 (Cth) s 89A.

51. Industrial Relations Act 1996 (NSW) s 84; Workplace Relations Act 1996 (Cth) s 170CE(1)(a).

52. Industrial Relations Act 1996 (NSW) s 83; Workplace Relations Act 1996 (Cth) s 170CB.

53. Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410.

54. Industrial Relations Act 1996 (NSW) s 88.

55. Workplace Relations Act 1996 (Cth) s 170CG(3).

56. Watters v Zig Zag Railway Lithgow (NSW, Industrial Relations Commission, 3126 of 1993, Connor CC, 9 March 1994, unreported) at 7; see M Baragwanath, Unfair Dismissal in New South Wales (LBC Information Services, Sydney, 1999) at 124.

57. Wang and Others v Crestell Industries Pty Ltd and Another (1997) 73 IR 454. This was a decision of the Full Bench of the NSW Industrial Relations Commission.

58. Industrial Relations Act 1996 (NSW) s 89(1).

59. Industrial Relations Act 1996 (NSW) s 89(2).

60. Workplace Relations Act 1996 (Cth) s 170CH(3).

61. Industrial Relations Act 1996 (NSW) s 89(5); Workplace Relations Act 1996 (Cth) s 170CH(6).

62. Industrial Relations Act 1996 (NSW) s 106.

63. Industrial Relations Act 1996 (NSW) s 105.

64. R McCallum, Employer Controls over Private Life (UNSW Press, Sydney, 2000).

65. See Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144; Mahmud v Bank of Credit and Commerce International SA [1997] 3 WLR 95; Ryan v Aboriginal Gallery of Dreamings (Federal Court of Australia, No VI97/1281, Murphy JR, 20 June 1997, unreported); Fraser v Transport Accident Commission (Federal Court of Australia, No VI 1185 of 1997, Murphy JR, 5 August 1997, unreported).

66. Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 152.

67. D King, “Privacy Issues in the Private-Sector Workplace: Protection from Electronic Surveillance and the Emerging Privacy Gap” (1994) 67 Southern California Law Review 441 at 448.

68. King at 448-449.

69. King at 448.

70. McCallum at 10.

71. Unless they had been engaged by a particular employer during a period of at least 12 months and had a reasonable expectation of continuing employment: Workplace Relations Regulations 1996 (Cth) reg 30B(3). Under the Industrial Relations (General) Regulation 1996 (NSW), the requisite period is at least 6 months: reg 5B(1)(d).

72. L Kearly, “Privacy in the workplace” (1997) 2(8) Privacy Files 1 at 1.

73. V Steeves, “Privacy in the Workplace: A Moral and Legal Right” (1997) 2(8) Privacy Files 2 at 2.

74. Privacy Committee of NSW, Submission at 9; see also para 2.26.

75. Australia, Privacy Commissioner, Guidelines on Workplace E-mail, Web Browsing and Privacy (30 March 2000) «http:www.privacy.gov.au/issues/p7_4.html».

76. We refer here to the Privacy Committee Report (1995) and Working Party on Video Surveillance in the Workplace, Report to the Hon J W Shaw QC MLC Attorney General and Minister for Industrial Relations (NSW Department of Industrial Relations, Sydney, December 1996); see also New South Wales, Parliamentary Debates (Hansard) Legislative Council, 26 May 1998 at 5087.

77. See eg, Chamber of Manufactures of NSW (Industrial), Submission at 7; Retail Traders’ Association of NSW, Submission at 7.

78. See eg, Registered Clubs Association of NSW, Submission at 6; Retail Traders’ Association of NSW, Submission at 7.

79. Flanagan at 1273.

80. In this regard, the Commission agrees with Ford at 14.

81. Greenbaum at 163.

82. ILO (1993) at 11.

83. Privacy Committee (1995) at 22.

84. Metz at 24.

85. Privacy Committee (1995) at 22.

86. NSW Council for Civil Liberties, Submission at 5; NSW Young Lawyers Criminal Law Committee, Submission at 9.

87. NSW Young Lawyers Criminal Law Committee, Submission at 9.

88. Privacy Committee (1995) at 63.

89. See North v Television Corporation Ltd (1976) 11 ALR 599 for a discussion of the requirements for summary dismissal.

90. Electricity Comm of NSW t/a Pacific Power v Nieass (1995) 39 AILR 5-060.

91. Further guidance to its scope can be found in Workplace Relations Regulations 1996 (Cth) reg 30CA.

92. Barrington Group, Submission at 1 and 5; Registered Clubs Association of NSW, Submission at 8; Service Station Association Ltd, Submission at 2; M L Sides, Submission at 20; Privacy Committee of NSW, Submission at 30; Price Waterhouse, Submission at 16.

93. Workplace Video Surveillance Act 1998 (NSW) s 9(3)(b).

94. Workplace Video Surveillance Act 1998 (NSW) s 13(2).

95. NSW Young Lawyers Criminal Law Committee, Submission at 9; Barrington Group, Submission at 5; Privacy Committee of NSW, Submission at 29; NSW Nurses’ Association, Submission at 2.

96. Barrington Group, Submission at 1.

97. Chamber of Manufactures of NSW (Industrial), Submission at 9; Institute of Mercantile Agents, Submission at 3; Retail Traders’ Association of NSW, Submission at 10; Registered Clubs Association of NSW, Submission at 8; Price Waterhouse, Submission at 15.

98. The NSW Nurses’ Association submitted that such surveillance should be prohibited: Submission at 2; Price Waterhouse considered that surveillance may be appropriate in these areas if there was a demonstrated need: Submission at 15.

99. Privacy Committee (1995) at 54.

100. The reasons for not limiting the recommendation to judicial officers with the status of Supreme Court Judges are the same as those expressed in ch 5.

101. Registered Clubs Association of NSW, Submission at 7 and 13.

102. Workplace Video Surveillance Act 1998 (NSW) s 14. As noted above, additional mandatory considerations exist when the proposed surveillance will occur in a recreation room, meal room or any other area at a workplace where employees are not directly engaged in work: Workplace Video Surveillance Act 1998 (NSW) s 13(2).

103. Workplace Video Surveillance Act 1998 (NSW) s 15.

104. See ch 5 and 6.

105. This is consistent with the Commission’s recommendation concerning warrants for law enforcement officers in ch 5. It is also the maximum duration permitted under the Workplace Video Surveillance Act 1998 (NSW).

106. See ch 9 regarding the Commission’s recommendations on the use of information obtained as a result of covert surveillance.