Smartphones and other pocket sized devices have given employees a powerful tool to easily and discretely record workplace conversations and meetings.  Secret recordings breach the unwitting party’s privacy, even in a working environment.  However, can they be used as evidence in cases before the Employment Relations Authority and the Employment Court? The short answer is that it is bad faith.  It is a breach of privacy.  But secret recordings will, in certain circumstances, be admissible in evidence if the recording is relevant to the issues in the case.

Firman v Insyn Limited [2016] NZERA Christchurch 156

In the Firman case, three transcripts from recordings were identified as being at issue.   The first recording was of the conversation between Ms Firman and her employer during a disciplinary meeting where suspension was discussed.  The Authority considered that what happened at that meeting was related to the claim that Ms Firman had brought against her employer in the Authority.  Although the meeting was recorded without the employer’s knowledge, the Authority found it to be relevant so admissible in evidence. 

A second secret recording was of conversations between other employees.  Ms Firman stated that it was to establish proof that there was gossiping and bullying undertaken toward her by other staff.   She intentionally recorded a conversation between staff members whilst she was not present, by placing her cellphone in the room unattended.  The Authority acknowledged that “recording others secretly when the person recording is not participating in a meeting or conversation with them is generally not admissible.  It is not an action in good faith and the individuals are entitled to their privacy”.  However, in the circumstances of the case, the Authority also allowed this recording in evidence as it was relevant to show how Ms Firman was treated in the workplace. 

The third recording, between the manager and another staff member, was inadmissible. 

The decision to admit the first recording is consistent with other Authority cases where secret recordings of meetings have been accepted as evidence if they are relevant to the matters in dispute.  In the case of Harder v Proceedings Commissioner [2000] 3 NZLR 80,the Court of Appeal also confirmed that it is not unlawful for a participant to record a conversation without the knowledge of the other party. 

Many employers already have a practice of overtly recording disciplinary meetings to obtain a full and correct record of what was discussed.  It can be a double edged sword.  On the upside, there is no dispute as to what was said or not said.  There is little point in a secret recording.  On the downside, having a recording device on the table could inhibit a free and frank conversation between the parties. 

However, it may not be without consequences for employees who make secret recordings.  If the employer has a code of conduct or privacy policy which prohibits secret recordings the employee who uses a secret recording as evidence may well find the Authority imposes a penalty on them for bad faith and/or breach of the employer’s policy. 

Simpson v IBM New Zealand Ltd [2014] NZERA Auckland 321

Mr Simpson worked for IBM between 1996 and 2013 when he resigned claiming a constructive dismissal.  He had been a high performer until he moved into a sales role in 2010.  Between 2012 and 2013 he became embroiled in dispute over his targets and remuneration and his sales performance, which resulted in a Performance Improvement Plan, which he regarded as “terminal”.  He resigned claiming constructive dismissal.  After he left, it was discovered there were several secret recordings on his laptop of discussions in meetings with his managers.  There were also recordings of informal meetings regarding sales opportunities with an existing client. 

It was a term of clause 22 of Mr Simpson’s individual employment agreement with IBM that Mr Simpson comply with IBM’s Business Conduct Guidelines (BCGs).  Part 3.1 of the BCG’s lists as prohibited conduct Use of recording devices, including cell phone cameras and web cameras, except as authorised by management and IBM Counsel.

Mr Simpson filed in the Authority claiming unjustified constructive dismissal and disadvantage.  IBM counterclaimed for breach of good faith and breach of contract in relation to the secret recordings.  The Authority found there was no constructive dismissal or unjustified disadvantages as Mr Simpson claimed and that he had breached his terms and conditions of employment with IBM by not adhering to and breaching IBM’s Business Conduct Guidelines.  It ordered that Mr Simpson pay a penalty of $4,000.00 in respect of IBM’s counterclaims. 

Learnings

The Court of Appeal has paved the way by saying secret recordings between parties to a conversation are not unlawful per se.  Firman has extended this further to include, in certain circumstance unwitting employees who are not parties to a conversation between employer and employee.  This was a direct breach of the privacy of the staff members involved.   Despite the fact that the Authority acknowledged that the second recording was not “an action in good faith,” it was allowed as evidence relevant to the proceedings.  The learnings from Harder and Firman are that all the best internal privacy policies in the world are not going to pre-empt or prevent secret evidence being gathered and used by aggrieved employees in litigation if it is relevant to their grievances.  The learnings from Simpson are that it pays an employer to have a specific provision in its employment agreements, code of conduct or policies and procedures prohibiting secret recordings.  An employee who then breaches these obligations does so at their peril.   


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