Employees typically must relinquish some of their privacy while in the workplace, but how much they must do so can be a contentious issue. The debate rages on as to whether it is moral, ethical and legal for employers to monitor the actions of their employees. Employers believe that monitoring is necessary both to discourage illicit activity and to limit liability. Although, with this problem of monitoring employees, many are experiencing a negative effect on emotional and physical stress including fatigue, lowered employee morale and lack of motivation within the workplace. Employers might choose to monitor employee activities using surveillance cameras, or may wish to record employees activities while using company owned computers or telephones. Courts are finding that disputes between workplace privacy and freedom are being complicated with the advancement of technology as traditional rules that govern areas of privacy law are debatable and becoming less important.
The EU Directive 95/46/EC on the protection of individuals with regards to the processing of personal data and on the free movement of such data limits and regulates the collection of personal information on individuals, including workers. Firms that monitor employees' use of e-mail, internet, or phones as part of their business practice without notifying employees or obtaining employee consent can be, in most cases, sued under Article 8 the European Convention on Human Rights. Although EU law is clear that e-mail interception is illegal, the law is not totally clear as to whether companies may prohibit employees from sending private e-mails.
The Omnibus Crime Control and Safe Streets Act of 1968 provides some privacy protections for employees. See Omnibus Crime Control and Safe Streets Act of 1968 § Employee Privacy. The Electronic Communications Privacy Act extends protections to include email messages, cell phones and other electronic communications. See Electronic Communications Privacy Act § Employee Privacy.
A 2005 survey of more than 500 U.S. companies found that over half of employers had disciplined employees and about one in four had terminated (fired) an employee for "inappropriate" use of the internet, such as sending an inappropriate email message to a client or supervisor, neglecting work while chatting with friends, or viewing pornography during work hours.
Computers that are reasonably used for personal purposes — whether found in the workplace or the home — contain information that is meaningful, intimate, and touching on the user’s biographical core. Canadians may therefore reasonably expect privacy in the information contained on these computers, at least where personal use is permitted or reasonably expected.
According to the Coase Theorem, an employer and an employee never agree to a contractual arrangement that would reduce the total surplus generated by the two parties together. Hence, when we observe workplace surveillance, then the costs (say, the worker's disutility caused by the loss of privacy) must be smaller than the benefit (say, the additional profit due to a reduction of shirking), because otherwise the parties would abolish surveillance (the worker would be willing to accept a smaller wage in exchange for more privacy, which would increase the employer's profit more than surveillance could do). However, the Coase Theorem holds only if there are no transaction costs. Schmitz (2005) has shown that in the presence of asymmetric information (leading to a moral hazard problem), the total surplus generated by an employer and an employee can be increased if workplace surveillance is prohibited by law.
Notes and references
- Howstuffworks "How Workplace Surveillance Works"
- Electronic surveillance in the workplace
- Sylvia Mercado Kierkegaard (2005) Reading Your Keystroke: Whose Mail Is It? Lecture Notes in Computer Science, Publisher: Springer Berlin / Heidelberg, Volume 3592 / 2005, Chapter: p. 256
- Surfing the Web on the Company Dime : NPR
- Makin, Kirk. "Supreme Court rules employees have right to privacy on work computers". The Globe and Mail. Retrieved 3 March 2017.
- Schmitz, Patrick W. (2005). "Workplace surveillance, privacy protection, and efficiency wages". Labour Economics. 12 (6): 727–738. doi:10.1016/j.labeco.2004.06.001. hdl:10419/22931. ISSN 0927-5371.