Themes In Employment Law

October 2005

Big Brother Goes to Work: Video Surveillance in the Workplace

 NB: The comments included in this publication should not be read as representative of the view of the Court, Authority, or the Department of Labour.  Rather, any view expressed is in the nature of an opinion only.

Crown Copyright

All rights reserved. No part may be reproduced or copied in any form or by any means without the prior permission of the copyright owner except in accordance with the provisions of the Copyright Act 1962.  All requests for reproduction of any material in the Themes on Employment Law should be addressed to:Department of Labour, Workplace Group, Information & Promotion,  Senior Advisor - Knowledge Management , PO Box 3705, Wellington.

WARNING: The doing of any unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution.

I    INTRODUCTION

Not long ago the Employment Relations Authority commented that:¹

In recent years it has become more common for employers to utilise covert video surveillance to detect crime occurring in the workplace….  The use of such surveillance is an accepted practice provided the employer does not breach the privacy rights of individuals.

Usually employers set up video cameras to uncover suspected theft by employees and/or customers.  There can, however, be other reasons – in one unusual instance, the employer installed video cameras to see what use was being made of a hidden room it discovered on its property.²

This editorial firstly considers the lawfulness, in an employment law context, of video surveillance by an employer, and then goes on to look at some possible procedural defects in the dismissal of an employee “caught on camera.”  Finally, the editorial explains how an employer’s use of video cameras in the workplace is treated under the Privacy Act 1993.

II  THE LAWFULNESS OF VIDEO SURVEILLANCE: EMPLOYMENT LAW

Many employers who use video surveillance do so because they have reason to suspect that there is theft in the workplace, whether by employees or by customers.  It would be best practice for an employer to ensure that employees are aware of the video surveillance (perhaps by way of signs in the workplace), and why it is being used.  In fact, informing employees about a video camera may deter would-be thieves.  Sometimes, however, an employer may believe that telling employees about the presence of a camera would affect the reason for installing it in the first place (for example, to catch a particular thief).

An employee recently before the Authority argued that her employer’s use of video surveillance without her knowledge was unlawful and unfair.³  No doubt this sentiment would be echoed by many employees if they discovered that their employer was watching them on hidden video cameras.  The Employment Court, however, has held that “[t]he video surveillance of suspected employees is not in itself objectionable.  Nor it is it particularly novel.”⁴

Employers who wish to use video surveillance in the workplace should keep in mind the obligation to deal with their employees in good faith, as well as the implied obligations of trust and confidence.  However, for the purposes of employment law, the use of video cameras (hidden or not) to, for example, prevent or investigate theft, is likely to be lawful.  It is possible, though, for an employer to agree in an employment agreement not to use video surveillance.  The Court considered this possibility in New Zealand Tramways Union (Wellington Branch) v Wellington City Transport t/a Stagecoach New Zealand:⁵

The sole question is whether the company has bound itself by contract not to use such surveillance, however sensible it may seem to do so.  If it has, the contract will bind it, however inconvenient that may be for it will and must be assumed that the provision has been inserted deliberately and in exchange for some benefit to the company…  A finding that the contract prohibits or restricts the use of video surveillance could stem from express language or by necessary implication.

This judgment makes it clear that, when looking at the lawfulness of using video surveillance in an employment law context, any relevant provisions in the parties’ employment agreement should be considered.

III A PROCEDURALLY FAIR DISMISSAL USING VIDEO FOOTAGE

It is elementary that a dismissal must be procedurally as well as substantively fair.  While the apparently compelling nature of an allegedly incriminating video tape may suggest otherwise, a dismissal based on video footage must still meet basic procedural standards.  In one case,⁶ the employer’s director informed all employees at a staff meeting that information obtained from a hidden video camera implicated some employees in theft and other matters that could result in dismissal.  He told the employees that if they admitted their involvement he would “wipe the slate clean.”  The Authority commented that:

[The director] felt that his offer to staff… to admit to any dishonesty that may be on video tapes and then have a clean slate with [the employer] was generous.  I find it was an appalling situation to place employees in and quite devoid of any procedural fairness in terms of notice, representation and general transparency.

This part of the editorial looks at two procedural defects that may render a dismissal based on video footage unjustified: relying on insufficient evidence and a failure to give a proper opportunity to comment.  It then sets out a recent example of a procedurally fair dismissal based on video surveillance evidence.

A   Relying on Insufficient Evidence

As discussed above, the most common reason for dismissing an employee on the basis of video surveillance footage is theft.  Theft is a serious allegation.  When an employer seeks to dismiss an employee upon a serious allegation, it should remember that:⁷

It is well settled that the standard of proof which the employer must attain is the civil standard of balance of probabilities rather than the criminal standard of beyond reasonable doubt; however, where a serious charge is the basis of the justification for the dismissal, then the evidence in support of it must be as convincing in its nature as the charge is grave.

It may be thought that footage from a video surveillance tape will be compelling evidence of employee misconduct; that the employee has been “caught in the act.”  As the Authority in one case commented, “[t]he video footage effectively represents a contemporaneous visual record of the incident.…  [It] is a graphic record of the events in contention.”⁸  This, however, may not always be the case.  The Authority determination  Puts v Foodstuffs (Wellington) Co-operative Society Ltd illustrates this.⁹  The employee was dismissed because of the employer’s conclusion, from video footage, that he was guilty of taking stock (sweets) without authorisation.  The Authority considered whether the evidence to support that allegation was sufficiently convincing that a fair and reasonable employer could conclude it was made out.

Upon viewing the video tape, the Authority agreed that the employee’s actions were suspicious.  The Authority however also viewed the tape in slow motion.  This showed that the tape was “jerky” and jumped for a number of seconds at important times.  The Authority found that it was impossible to ascertain what the employee had in his hands, if he was placing anything in his mouth, or in his pockets.  The Authority concluded:

Given the gravity of the allegations against him, I hold that no fair and reasonable employer could conclude that there was sufficiently compelling evidence, on the basis of the videotape, to find that it was more likely than not that [the employee] had committed the serious offence of pilfering stock…

Similarly, it was unfair that almost no consideration was given to [the employee’s] explanation…

An additional factor in the employees favour, but which is not key, is that no other investigations were taken into account by [the employer], such as whether there was evidence of pilfering at that time.

The dismissal was unjustified.  The employee was awarded $10,000 compensation, reimbursement of lost wages in the period since his dismissal, and was reinstated.  This determination shows that employers should take into account the quality of the video evidence, as well as the employee’s explanation, when deciding whether or not misconduct has occurred.

B   Failure to Give a Proper Opportunity to Comment

An employer may believe that what it sees on the video tape is so compelling that the employee cannot give an answer for it.  No matter how damning the evidence of misconduct may appear to be, however, an employer should in good faith give the employee an opportunity to comment on the allegations arising from the video footage.

1   Explaining the video footage to the employee

Footage from a video surveillance tape is unlikely to be movie quality, and may require some explanation by the employer.  In Kirk t/a Country Rest Restaurant v Thomas,¹⁰ the security consultant engaged by the employers played and replayed the video tape of the footage to the employee, freeze framing and sequentially “stilling” individual frames to assist the employee’s understanding.  He gave the employee a commentary of what she, on the tape, appeared to be doing at different times.  The Court held:¹¹

…[T]his approach was most important because there are inherently unsatisfactory aspects of the video tapes concerned recording these particular transactions and the “birds eye” view recorded which demands careful consideration and reconsideration for the purpose of acquiring an informed understanding of what is visually being shown.

The full explanation of the footage by the employer in Kirk t/a Country Rest Restaurant v Thomas can be contrasted with the case before the Authority of Logan v Hagal Company Ltd.¹²  After viewing the video surveillance, the employer’s managing director became concerned that the employee had either removed product or arranged for product to be removed from the store without following correct procedures.  After a meeting the employee was dismissed.

The Authority found that the employer’s investigation process was not full and fair.  The employee was not told before the meeting of the specific allegations which she was expected to respond to.  Nor did the employer take into account the fact that the employee had attended her father’s funeral the day before the meeting.  The Authority also said of the meeting:

She was then shown each incident, for the first time at the disciplinary meeting, and asked to provide her explanations….[T]he process of working through each of the video clips became very disjointed.

[The managing director] had had the benefit of watching the tapes many times before coming to her conclusions.  It seems only fair that [the employee] be given more opportunity for her to consider properly what was being shown to her and to think through what had happened on the days in question.

Because of the lack of procedural fairness, the employee’s dismissal was unjustified.  However, the remedies she was awarded were reduced by 50% because of the employee’s failure to adhere to standard procedures.  This resulted in an order of six weeks’ reimbursement of lost wages and $2,500 compensation.

2   An opportunity to comment on all relevant matters

An employer may give the employee concerned sufficient opportunity to comment on the particular video footage shown, but this is not always enough.  If the employer is also taking in account other matters – other footage, or other suspicions, for example – then the employer should allow the employee an opportunity to comment on those matters too.

In Kirk t/a Country Rest Restaurant v Thomas the employers instructed a security consultant to install a hidden surveillance camera which recorded 24 hours a day over a 14 day period.  In one particular transaction the camera footage showed the employee receive a note from a customer, give the customer change, but not put the note in the till.  The employee was shown video footage of this transaction and asked for an explanation.  There were also allegedly six other similar transactions but the employee was not shown the video tapes of these.

The employee was dismissed for serious misconduct.  After the Employment Tribunal found the employee had been unjustifiably dismissed, the employers appealed to the Employment Court.  The Court found that the employers had adversely taken the six other transactions generally into account, and also particularly when evaluating what had occurred in the one transaction shown to the employee.  This “was entirely inappropriate”:¹³

[A] material “shortcut” was taken by both [the security consultant] and the [employers] in their investigation of the alleged serious misconduct comprising suspected dishonesty by [the employee], to her pronounced disadvantage.  This shortcut did not accord with the principled approach which the [employers] were relevantly required to follow before, in the absence of satisfactory explanation by [the employee], they subsequently dismissed her.

The Court found, like the Tribunal, that the dismissal was unjustified (though it reduced the remedies the Tribunal had awarded).  The employee should have been shown the other six transactions and given an opportunity to comment on them.

Similarly, an employer cannot rely on one particular transaction as confirmation of larger suspicions without allowing the employee to comment.  In Webley v Grant Ramsley t/a Millennium 3 Marine the employer had suspicions that the employee (who was also a director) was stealing money.¹⁴  It arranged a “test purchase.”  The employee sold the customer an item for $100.  However, no sales were rung up and the video footage showed that the employee had not placed the cash payment into the till.

The parties disputed what went on at a subsequent disciplinary meeting.  The meeting was held with the employer’s representative, and his notes recorded that the employee admitted to taking the $100 from the test purchase, and taking other money on five or six occasions totalling between $500 and $1,000.  At the Authority’s investigation meeting, the employee said he did not admit to taking other money but he did admit to taking the $100 (with the explanation, not given at the time, that it represented part reimbursement of expenses incurred by him on behalf of the employer).  At that point the employer’s representative adjourned the meeting to speak to the directors.  They instructed him to dismiss the employee for dishonesty.  The employee’s representative reported this to the employee and told him that the directors believed he was responsible for $30,000 in losses.

The Authority found that the employer did not conduct a fair and full investigation.  The dismissal was based on the directors’ conclusion that all their suspicions were well-founded, but the employee may have been able to satisfy some or all of these suspicions if the directors had met with him and canvassed all their concerns.  An employee is entitled to be heard by the decision-maker.  In this case, the employee was denied an opportunity to be heard on all relevant matters that the decision-maker took into account.  The dismissal was unjustified, but the employee was not entitled to any remedies because of his action in taking the $100.

C   A Procedurally Fair Dismissal: A Recent Example from the Authority

If a dismissal is carried out properly, video surveillance evidence can be a useful.  An example of a justified dismissal using footage from a security camera is Peachey v Air New Zealand Ltd.¹⁵  The employee had worked in cargo for the employer for 31 years.  He was dismissed after his employer determined that he had removed magazines from a consignment and placed them in a filing cabinet.

The employee was given a letter in which he was asked to attend a meeting “to discuss footage from a security camera, together with a booklet of still photographs taken from the same footage.  The video and photographs appear to show you dealing with newspapers and other printing materials in a manner and circumstances, which require explanations.”  Copies of the DVD, video tape and photos were enclosed with the letter.  The employee was warned that that investigation could result in dismissal, and reminded that he was entitled to have a representative at the meeting.

At the meeting, the employee said he threw away the magazines because they were damaged, but had kept two to see whether they had crosswords in them.  The Authority noted that any damage could not be seen on the video surveillance.  When the employer asked whether his disposing of the cargo had complied with the correct handling procedure, the employee replied that he did not know.  The employee was dismissed.  The Authority described the employer’s investigation as “thorough, comprehensive and meticulous.”  The employee’s actions were contrary to established procedure and regulation.  The Authority found that it was reasonable for the employer to reject the employee’s denial of knowledge of the relevant procedures.  The dismissal was justified.

IV  THE LAWFULNESS OF VIDEO SURVEILLANCE: PRIVACY LAW

A   Relationship between the Privacy Act 1993 and the Employment Institutions

An employer’s use of video surveillance in the workplace may be affected by the Privacy Act 1993 (“the Privacy Act”).  With one exception, the Information Privacy Principles contained in the Privacy Act do not confer on any person any legal right that is enforceable in a court of law,¹⁶ and the Authority and the Court do not have jurisdiction under the Privacy Act.  Nevertheless, both the Authority and the Court have referred to the Privacy Act and the privacy rights of individuals.¹⁷  In NZ Amalgamated Engineering Printing and Manufacturing Union Inc v Air New Zealand,¹⁸ the plaintiff unions sought to restrain the defendant from implementing a drug and alcohol testing policy in the workplace.  One argument made was that the policy breached the Privacy Act.  The Privacy Commissioner (discussed below) was given leave to be heard and made submissions about the application of the Privacy Act to assist in determining the reasonableness of the proposed drug and alcohol testing.  The Full Court commented that:¹⁹

Reasonableness is an objective assessment of the nature and consequence of an action or intended action in all relevant circumstances including contemporary New Zealand society.  The Privacy Act's provisions may be said to represent current community standards and expectations in this area and as the community's parliamentary representatives have seen fit to incorporate into, and underpin, contemporary legislation.

In this way, it might be possible for the Authority (and the Court on a challenge) to take the standards set by the Privacy Act into account when assessing the justifiability of an employer’s actions in the context of a dismissal or an alleged disadvantage.  Section 103A of the Employment Relations Act 2000 requires the Authority to consider whether the employer’s actions were what a fair and reasonable employer would have done in the all the circumstances at the time the dismissal or action occurred.  Arguably, what a fair and reasonable employer would do would be guided by the standards set in the Privacy Act.

B   The Privacy Commissioner and the Human Rights Review Tribunal

The Privacy Act establishes a Privacy Commissioner.  Any person may make a complaint to the Privacy Commissioner alleging that an action appears to be an interference with the privacy of an individual, because it breaches an Information Privacy Principle (discussed below) and causes or has the potential to cause some adverse consequence.²⁰  It is one of the functions of the Privacy Commissioner to investigate an action that appears to be an interference with the privacy of an individual.²¹  The Privacy Commissioner will seek to secure a settlement between the parties concerned, and, if appropriate, seek to secure a satisfactory assurance against the repetition of the action that was the subject-matter of the investigation.²²

Investigations by the Privacy Commissioner are conducted in private and it is not necessary for the Privacy Commissioner to hold any hearing.²³  The Privacy Commissioner may hear or obtain information from such persons as the Privacy Commissioner thinks fit, and make such inquiries as he or she thinks fit.²⁴

If the Privacy Commissioner is unable to do secure a settlement and/or an assurance against repetition of the action, the Privacy Commissioner may refer the matter to the Director of Human Rights Proceedings for the purpose of deciding whether proceedings before the Human Rights Review Tribunal should be instituted.²⁵  An aggrieved individual may bring proceedings before the Human Rights Review Tribunal themselves if the Privacy Commissioner or the Director of Human Rights Proceedings is of the opinion that the complaint ought not to be proceeded with.²⁶

If the Human Rights Review Tribunal is satisfied on the balance of probabilities that the action is an interference with the privacy of an individual, it may grant one or more of the following: a declaration; an order restraining the defendant from engaging in that action; damages (for pecuniary loss, loss of any benefit, humiliation, loss of dignity and injury to feelings); an order that the defendant remedy the interference; or such other relief as the Tribunal thinks fit.²⁷

C   Relevant Information Privacy Principles: A Case Note

As discussed above, one of the functions of the Privacy Commissioner is to investigate an action that appears to be an interference with an individual’s privacy.  Section 6 of the Privacy Act sets out twelve “Information Privacy Principles” relating to the collection, use, and holding of personal information.  A breach of one of these Information Privacy Principles can be the basis of a privacy complaint.

By way of introduction, the Privacy Act applies to the collection of, storage of, access to, and use of personal information by an agency.  “Personal information” is broadly defined as “information about an identifiable individual,”²⁸ and appears to include a person’s actions as filmed by video surveillance.  “Collect” is not defined by the Privacy Act, except to the extent that it does not include the receipt of unsolicited information.²⁹  The Privacy Commissioner’s case notes (discussed below) treat the recording of information via a video camera as “collecting.”³⁰  Finally, “agency… means any person or body of persons, whether corporate or unincorporate, and whether in the public sector or the private sector.”³¹  This definition is broad enough to include any employer.  Acts of employees are treated as both their own acts and acts of their employers.³²

The Privacy Commissioner sometimes issues a case note about the investigation of a particular complaint,³³ and publishes it on the Office of the Privacy Commissioner’s website (www.privacy.org.nz).  These case notes are only opinions and do not bind anyone.  One such case note, Case Note 32277,³⁴ illustrates the application of some Information Privacy Principles to a situation involving video surveillance in the workplace.  The employee’s union had complained on the employee’s behalf that the employer had installed a video camera in the locker room of one of its plants.  Employees had not been notified before the cameras were installed.  The Privacy Commissioner investigated whether this action amounted to an interference with the employee’s privacy.

Under Information Privacy Principle 1, the collection of information by an agency must be for a lawful purpose, and that purpose must be connected with the function or activity of that agency.  The employer alleged that its purpose in installing the video camera was to identify who was responsible for thefts from employees’ lockers, and more generally to prevent thefts. The Privacy Commissioner was satisfied that this was a lawful purpose.  Collection of the information must be necessary for the purpose for which it is collected.  The employer alleged that, because past warnings to staff about thefts had been unsuccessful, it had decided to try to identify the thief.  The Privacy Commissioner was persuaded that identification of the thief in an independent and objective way was necessary, and the use of the video camera was the only way that the employer’s purpose could have been achieved, given its lack of success in gathering evidence previously.

Information Privacy Principle 2 states that (with exceptions), an agency must collect the information directly from the individual concerned.³⁵  Under Information Privacy Principle 3, an agency collecting information directly from the individual concerned must take reasonable steps (before, or if that is not practicable, as soon as practicable after the information is collected) to ensure that the individual is aware, for one thing, of the fact of collection.  There was a notice displayed at the employer’s site entrance stating that hidden cameras might operate on the site.  The Privacy Commissioner noted that the sign was a general warning, and that employees would not expect that hidden cameras would operate in a locker room.  However, Information Privacy Principle 3(4)(d) provides an exception to 3(1) if the agency believes on reasonable grounds that compliance would prejudice the purposes of the collection.  The Privacy Commissioner was persuaded that to have advised employees using that locker room that cameras were operating would have defeated the purpose for using them – to identify the thief.  The Privacy Commissioner also noted that the employee was told that information had been collected by the video camera as soon as the employer was satisfied that he was the person responsible for the thefts.

Under Information Privacy Principle 4, personal information must not be collected by unlawful means or by means which in the circumstances are unfair or intrude unreasonably into the individual’s personal affairs.  The Privacy Commissioner did not consider that it was unlawful for the employer to film activities taking place on its own premises, or that it was unfair to film the locker room where there had been previous thefts.  The video was operating in an area where workers changed, but the video camera did not capture activities in the shower or toilet area; it was activated only by movement near the target locker; it needed to record faces so as to identify the thief, and it was in operation for only as long as was necessary to identify the thief.  Taking these matters into account, the Privacy Commissioner was of the view that filming did not constitute an unreasonable intrusion into the employee’s personal privacy.  On this basis, the Privacy Commissioner closed the file.

There are other Information Privacy Principles that may be relevant to video surveillance of employees.  Under Information Privacy Principle 6(1)(b), where an agency holds personal information in such a way that it can readily be retrieved, the individual concerned shall be entitled to have access to that information.  Further, under Information Privacy Principle 9, an agency that holds personal information shall not keep that information for longer than is required for the purposes for which the information may lawfully be used.

Keeping in mind the comments made above about the interaction between employment and privacy law, the application of Information Privacy Principles to video surveillance of employees as illustrated by Case Note 32277 may well provide a useful standard when considering whether an employer’s actions are reasonable.

V   CONCLUSION

Big Brother has been at work for a long time.  Video surveillance in the workplace is not a new phenomenon, but it has the potential to affect the working lives of the employees filmed.  Best practice would be for an employer to discuss video surveillance with employees prior to installing video cameras.  If an employer wishes to discipline an employee on the basis of what it believes the video footage shows, the employer should, as with any disciplinary action, take care to follow a fair procedure.  Finally, employers should be aware of the effect that the Privacy Act may have on video surveillance at work.

Endnotes:

back to top

This page was last updated on: 27-Aug-2009 and is current.