Covert surveillance in the workplace

by The FindLaw Team

Generally speaking, placing an employee under surveillance, including the use of video cameras, is not unlawful under the Privacy Act 1993 where there is reasonable grounds for the employer believing an employee is involved in an act of theft, or other serious offence while at work; and placing the employee under surveillance is the only means by which an employer can ascertain that employee’s involvement or otherwise.

If footage shows actions that appear to indicate theft or other criminal activity, and the employee is disciplined as a result, the employer should carried out a fair and thorough investigation, with an open mind, which means assumptions should not be made, even if the footage seems conclusive.

An accused employee is likely to be entitled to see the footage – depending on the exact circumstances.

The following cases give examples where covert surveillance has been used by an employer and a disciplinary procedure followed as a result.

Footage edited and abridged

In Lawless v Comvita NZ Ltd (2005) the company had a number of hidden security cameras installed throughout its premises as it believed that quantities of stock were being stolen by staff.
One camera revealed that an employee, Wakefield, had removed a box from under a bench in the inwards goods area, concealed it, and later taken the box outside the building towards an area where employees’ vehicles were parked. The video also showed Lawless in the same area of the plant acting in a way that the company’s management considered “suspicious”. The company’s management believed that Lawless was potentially acting as a “lookout” for Wakefield, although the video did not show Lawless doing anything unlawful or inappropriate.

Further observations were carried out, and Lawless was seen placing a cardboard box under the bench Wakefield had taken the box from 4 days earlier. Later that day, Wakefield was again observed removing a box from under the same desk. Management subsequently approached Wakefield, who confessed to having removed company property. He also admitted that other employees were involved, but refused to name them.

An investigation looked into Lawless’ conduct. At the first meeting, Lawless was told that his job was in jeopardy and heavily edited portions of the video footage were presented to him. He was asked to explain what he was doing, and was not told exactly what the company alleged he may have done, or what its exact concerns were. He was advised by the union that he should not answer any such questions in the circumstances, as there wasn’t a case to answer.

At the second disciplinary meeting, Lawless said that the videotape simply showed him doing what he would normally do at work, and that he had done nothing wrong. Lawless was asked several times to explain his actions, and each time he reiterated that he had no case to answer and would not be saying anything further. The company dismissed Lawless.

The Employment Relations Authority determined that the company had given Lawless a fair opportunity to explain his actions. He was notified that his job was “in jeopardy”, and as such Lawless’ decision to make no further comment or give any explanation about his actions was “a fatal error of judgement”. The Authority concluded that in these circumstances, summary dismissal was justified. Lawless appealed.

The Employment Court detailed its concerns with the investigation process. It found that the evidence gathered by the company consisted solely of surveillance footage that had been abridged and rearranged. The tapes showed Lawless simply putting a box under a desk which was subsequently removed by Wakefield, and Lawless loitering in the area.

The Court stated that the company relied too heavily on the surveillance footage, which was silent and did not objectively demonstrate any particular wrongdoing.

The Court held that a fair and reasonable employer could not have concluded that Lawless’ conduct impaired the basic trust and confidence essential to the employment relationship. Therefore, the dismissal was held to be unjustified.

However, the Court found Lawless had contributed to his personal grievance. Although he was not legally obliged to comment on the videotapes, his refusal to talk was unhelpful to the investigation. His remedies were reduced as a result.

Reasonable conclusion

In Witehera v Penguin Wholesalers Ltd (2008), Witehera came under suspicion when product started to go missing on every second Thursday. Video surveillance showed footage of Witehera accessing a chiller during a half hour when pork went missing from the chiller. The company organised a police search of his home, but none of the company’s product was found there.

Nevertheless, Witehera was dismissed for parking the company’s truck outside his home on three occasions (which was an unauthorised deviation in his delivery route) and for being in possession of company product and selling it. The possession and sale of product was an allegation that the company suspected due to circumstantial evidence, but for which it had no firm proof. Witehera denied the theft allegations.

The Employment Relations Authority rejected Witehera’s claim of unjustified dismissal. It was reasonable for the employer to conclude that Witehera was the only person who could have removed the product, based on the video surveillance, surveillance by senior employees of Witehera’s movements, and his unauthorised visits to his home.

Failure to follow cash handling procedures

In Waines v Karamea Information & Resource Centre Inc (2011), the employer experienced an unexpected deficit and, suspecting shoplifting may be the cause, installed video surveillance cameras. Camera footage revealed that Waines took money from a jar on the counter and twice failed to scan purchases. She was dismissed for serious misconduct because she failed to follow the employer's cash handling procedures (there was no allegation of theft).
In relation to Waines' claim that the process was unjustified because she was not given a copy of the video surveillance footage at the meeting, the Employment Relations Authority determined that the employer was under no legal obligation to do so unless she asked for it, and she did not. The reason for this conclusion was that none of the evidence suggested Waines had any difficulty responding to the allegations. The Authority concluded that Waines' dismissal was justified.

Confrontation better than covert surveillance

In Booth v Hirequip Ltd (2012), Booth was an account manager for the company. His manager suspected him of abusing the flexibility his employer allowed him, so the manager secretly followed Booth for the day, recording his activities and times. Later that day, Booth was told to fill in a call sheet for the day and return it after the weekend, which he did.

Booth's manager called him in to a meeting and asked him to confirm his call sheets were "true and correct". When Booth did so, the manager gave him a list of times and activities recorded during the surveillance and asked him to explain four discrepancies. Booth explained that one of the visits on his call sheet had been made the previous day and he recorded it by mistake. The other three were imprecisions due to the call sheet being filled in from memory after the weekend. Booth was given a written warning for dishonesty.

Booth's employment agreement provided the employer would advise the employee of allegations of misconduct or poor performance and then schedule a meeting to discuss the employee's response. The Employment Relations Authority determined that the company did not comply with this contractually binding disciplinary procedure.

The manager carried out covert surveillance and prior to meeting with Booth had a well-formed allegation of serious misconduct. There was no need to ask whether the call sheet was "true and correct" because the manager thought for certain it was not. An alternative would have been to properly inquire as to Booth's whereabouts on the day the manager suspected Booth was abusing his flexibility and check with other staff whom he had assisted during the day.

The Authority used the words of the Court of Appeal in a similar case, stating it would have been "more orthodox and better for [the manager] to have confronted [Booth] from the outset with the knowledge that he had kept [him] under observation".

The Authority concluded that the company did not sufficiently investigate the allegations, did not adequately raise its concerns with Booth, did not give him a reasonable opportunity to respond to those concerns, and did not genuinely consider his explanations before deciding to warn him. The warning was unjustified and disadvantaged him.

The company was ordered to treat Booth as never having received the warning, and pay him $7,500 compensation for distress.

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