Landmark Cases: Foran -v- Galen Ltd. (UD 1894/2010) - Covert Surveillance and Unfair Dismissal

Peninsula Team

June 04 2012

As employees spend more time at work and technology improves, there may be a conflict between an employee’s right to privacy during their working time and an employer’s right to monitor employee activities in order to protect the business. Employers have a plethora of tools which may be used to covertly survey employee work habits such as hidden cameras, phone tracking devices and on occasion it has even been the case that employers have sought out the services of private investigators to covertly monitor employee behaviour. The recent Employment Appeals Tribunal (EAT) decision of Foran -v- Galen Ltd. (UD 1894/2010) tackled the thorny issue of covert surveillance through vehicle tracking devices and its fairness and admissibility in internal disciplinary hearings. The case is well worth a review against the back-drop of the Data Protection Acts and its guidance on what is expected of employers when it comes to covert surveillance.

Background The respondent company, Galen Ltd., was involved in the distribution, sales and marketing of its products mainly to medical doctors and related professions. The company invested sizeable resources into its products but were subsequently disappointed with the commercial return on this marketing campaign. Summary The company decided to conduct a covert surveillance operation on its entire sales team through a global positioning vehicle tracking system. Importantly, it was decided that this would be done secretly as otherwise the employees would only change their misconduct behaviour if they became aware of the tracker’s existence. The tracking device was placed in the claimant’s car and the results of which allowed the company to compare a report on the vehicle’s movements as against the claimant’s diary entries. This report outlined a number of discrepancies and on this basis the claimant was invited in writing to attend a disciplinary meeting. The company in the disciplinary invite letter gave a summary of the evidence against the claimant, and also enclosed a copy of its disciplinary policy and procedures and identified that the alleged behaviour could amount to gross misconduct justifying summary dismissal. Importantly, the claimant’s colleagues were also being subjected to disciplinary action where similar issues occurred. The claimant was aware of his right to bring a representative to the disciplinary hearing but failed to bring any representative. Further details of the allegations against the claimant were outlined in the hearing but he was not provided with the evidence which supported these allegations. Following this disciplinary hearing, the company dismissed the claimant on the basis that his conduct amounted to fraud and a breach of contract. The claimant did not appeal the decision to dismiss him as he felt that there was no point in doing so. In the EAT hearing though he noted that his work performance had never been questioned prior to this event and that had received two awards for his work performance previously. He did acknowledge that the expense forms in question that he had submitted contained false information but that this was just ‘sloppy’ work on foot of the fact that maintaining paper records ‘did his head in.’ Impact Data Protection and Covert Surveillance The Data Protection Acts 1988-2003 govern covert surveillance and its implementation in the Irish workplace. In this respect the legislation seeks to enforce and protect the employee’s right to privacy which is recognised as falling under Article. 40.3 of the Irish Constitution through setting rules and regulations around the collection and processing of ‘personal data’. The Acts define personal data as ‘data relating to a living individual who can be identified either from the data or from the data in conjunction with other information in the possession of the data controller.’ The Data Protection Commissioner has stated that “The use of vehicle tracking systems involves the collection of personal data as they record the location of the individual in charge of a vehicle at any particular time. An organisation using or considering using such a tracking system must be able to demonstrate that there is a good business reason for such surveillance. The individuals affected must be informed of the surveillance and its purposes. If personal (non-work-related) use of a vehicle is permitted, it should be possible to disable or mask the tracking system outside of working hours.” Disciplinary Hearing and Catching Employees Out One important issue which was raised in the Foran case was that the employer decided to covertly monitor the employees in order to see if they were engaging in a particular type of misconduct. In this respect it is important to consider how the EAT has previously viewed the fairness of an employer setting traps for their employees and the implications of same in an unfair dismissal claim. In the case of Heffernan -v- Dunnes Stores (UD1355/2009) the EAT considered the fairness behind dismissing a till worker on the basis that she had abused the customer loyalty scheme by scanning customer loyalty points on to her own loyalty card. The dismissal occurred after an extensive investigation after the company had become aware that this was potentially an issue. In assessing this the EAT noted that “the respondent was alerted by head office of an irregular use of the card. In response the respondent conducted a covert operation involving CCTV footage studies and an analysis of till receipts. It was open to the company at this point to generally alert staff that the inappropriate use of value club cards would not be condoned and remind staff of the handbook statements in this regard. The respondent did not choose to do this ... The respondent was entitled to discover the nature of the unusual pattern but the Tribunal questions whether the respondent was correct in allowing the claimant continue using her value club card in the manner she was without generally notifying the workforce that such card use was unacceptable.” It is easy to draw similarities between the employers conduct in the Heffernan case with the employers conduct in the Foran case in that on both occasions the employer noted that certain errors were potentially occurring and the employer then engaged in covert surveillance to catch employees out. In the Heffernan case the EAT held the dismissal to be unfair and awarded the employee €24,000 for unfair dismissal. EAT Decision     In the Foran case the EAT noted that all individuals have a right to fair procedures and natural justice and this includes employees who are faced with disciplinary action from their employers. In this case the EAT determined that the employer had not complied with the principle of fair procedures as it had “neglected to inform its staff of its covert monitoring policy and opted not to tell the claimant that such an operation was being applied to him. This could be regarded as a breach of trust on behalf on the respondent. Furthermore the company did not provide the claimant with all the full gathered information used against him… Setting traps and ambushes for an employee is inappropriate behaviour for an employer.” The EAT also determined that the employee’s false entries were not excessively so and they preferred the notion that it was sloppy work as opposed to a deliberate intention to deceive the company. It was also strongly noted that the failure to provide all evidence to the employee for the disciplinary hearing was unfair. For these reasons the EAT found the dismissal to be unfair and awarded the employee €40,000. So what can be learned from the Foran case and from the additional information supplied above:

  • While a monitoring policy may be considered convenient to service the employer's interests, it must be clear that the employer's interest cannot justify an intrusion on an employee's privacy.
  • Setting traps and ambushes is very much frowned upon by the EAT and the Data Protection Commissioner and it is deemed preferable to notify the employees of any potential issues that are arising and allowing them to correct their conduct accordingly.
  • Employees must be made aware of any evidence being used against them at a disciplinary hearing.

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