10 September 2007
In order to dismiss an employee fairly for misconduct the employer must have a genuine belief that the offence was committed based on a reasonable investigation. What happens if, in order to investigate, you need to rely on covert surveillance? Hiring a private investigator may give you the evidence you need but under what circumstances will a tribunal consider it a reasonable tactic?
Circumstances when employers may consider using the services of private investigators include confirming suspicions that the employee is fraudulently claiming to be sick and/or is moonlighting. According to recent research carried out by Fool.co.uk, a personal finance information site, as many as 38% of employees regularly undertake more than one job and 70% of these do so without the knowledge or permission of their main employer. Almost half of the moonlighters surveyed acknowledged that their actions were in breach of an express term in their contract of employment.
Where there is no express term in the contract, employers may find it difficult to justify a dismissal for moonlighting by relying solely on the employee’s duty of fidelity. A term implied in all employment contracts is that the employee has a duty to agree to serve the employer loyally and in good faith and not to act against the employer's interests. However, in order to show a breach of fidelity, case law has established that there must be actual competition or misuse of the employer’s confidential information.
Last year, car manufacturer Nissan was ordered to pay £65,000 compensation to an employee who was held to be unfairly dismissed after he was sacked for working on his own behalf whilst signed off sick with work related stress. Private investigators hired by the company secretly filmed the employee doing odd jobs, including laying a lawn and mending a fence. However, the tribunal found that there was nothing in the company rules to prevent an employee from moonlighting in their own time or undertaking temporary paid work when ill. The company’s business had not been affected by the employee undertaking the activities which, as physical in nature, did not invalidate the employee’s sickness for a physiological condition.
It has not been reported whether or not the tribunal expressed any views on the use of private investigators in the above case, even though it amounts to the processing of personal data and is therefore regulated under the Data Protection Act (DPA). Employers cannot avoid their obligations by engaging a private investigator to collect personal information about workers on its behalf. The Data Protection Code of Practice makes it clear that once the covert monitoring results in a record being kept about the worker, the DPA will apply and the employer retains responsibility for data protection compliance, with the private investigator being the data processor.
Under the DPA the covert monitoring of an employee should always be authorised by a senior manager and should only be undertaken if the employer has reasonable grounds for suspecting criminal activity, such as corporate fraud, and where notifying individuals about the monitoring would prejudice the investigation. If undertaken, the monitoring should be strictly targeted, any data obtained which is irrelevant to the investigation should be deleted, and the surveillance should be kept to a fixed time frame.
Also, by its very nature, covert surveillance is a potential breach of Article 8 of the Human Rights Act (HRA), which provides that "everyone has the right to respect for his private and family life, his home and correspondence”. An employee unaware of being secretly filmed will have an expectation of privacy. It is unlawful for public bodies to act in a way which is incompatible with the HRA and this includes employment tribunals who are required to take account of the rights and freedoms and must interpret and develop the law in a way which is compatible with the HRA. A tribunal may therefore refuse to allow evidence obtained from covert monitoring, upholding the employee’s right to privacy, or may allow the evidence but impose a financial costs penalty against the employer.
However, it is important to note that the right to privacy under the HRA is not a qualified right and it is permissible to infringe that right in order to protect the rights and freedoms of others. In McGowan v Scottish Water (2005) the tribunal held that covert video surveillance of the employee's home to get evidence of when the employee left for and returned from work to detect false timesheets was admissible as evidence. The tribunal held that the covert operation was not a disproportionate response and was legitimately undertaken to protect the employer's assets.
Last month, Swansea Council were criticised for a hiring private detectives to check up on an employee whilst he was off sick. The tribunal upheld the employee’s claim of unfair dismissal and concluded that the Council’s conduct was consistent with a deliberate and cruel attack on the employee’s credibility, for which there were no grounds, and that there had been a determination by the employers to catch the employee out. So beware if you intend to hire a private detective. Make sure you clearly identify the purpose and benefits before hand, as in order to catch a cheat, the end does not necessarily justify the means!