Workplace Privacy:

Lessons For Ontario Employers

Jeffrey D.A. Murray

November, 2003

Introduction

In recent years unprecedented attention has been focused on whether an employee has a legal right to privacy. Much of this attention has focused on the comprehensive federal Personal Information Protection and Electronic Documents Act ("PIPEDA"), which is slated to apply to the collection, use and disclosure of personal information by any organization in the course of commercial activity within provinces that have not adopted "substantially similar legislation" on January 1, 2004. However, the federal Act will not apply even after that date to what might be loosely described as "employee personal information" that is collected, used or disclosed by provincially regulated employers. However, provincially regulated employers will be bound by PIPEDA for non-employment purposes as of January 1, 2004.

With the focus on PIPEDA, there has been less attention to non-statutory developments on this issue. Labour arbitrators have considered workplace privacy issues in a number of contexts including searches of employees outside the workplace, surveillance cameras in the workplace, and the video surveillance of employees by private investigators on behalf of employers. Arbitrators have been asked to consider whether an employee has a general right to privacy, or at least a reasonable expectation of privacy in the workplace, and how such a right would mesh with the management rights of the employer. It has been common for unions to challenge perceived violations of employee privacy interests through policy grievances, and by objecting to evidence adduced against employees at discipline and discharge arbitrations that the union alleges was acquired by violating the employee's privacy.   

By contrast, there has been comparatively little consideration of these issues by the courts in the employment context, although it appears that employees are free to pursue remedies for perceived breaches of privacy rights through common law actions.
     

In this article we review the major Ontario cases that have been decided in this area and try to set out the general principles that have emerged from these decisions.

Is there a General Right to Privacy?

Both the courts and labour arbitrators have grappled with this questions and their conclusions have not been consistent. Many of the early privacy cases were decided in British Columbia, which had a Privacy statute that created an express statutory right to privacy for employees.1 Thus when privacy cases were considered in Ontario, employers argued that the B.C. authorities were distinguishable on the basis that Ontario did not have a statute which created an express statutory right to privacy. Arbitrators by and large did not accept that the absence of privacy legislation prevented them from recognizing the right to privacy and giving a remedy to employees for breaches of privacy. 2 In Re: Lenworth Metal Products, 3 the arbitrator concluded that he had jurisdiction to hear a grievance about an employer's use of surveillance cameras in the workplace based on the general requirement that employers exercise their management rights in a reasonable manner. The arbitrator's award was upheld on judicial review by the Ontario Divisional Court.4 

It is clear that the absence of privacy legislation has generally not prevented arbitrators from granting relief against employers for breaching the privacy of employees. It has made little practical difference whether the source of the protection is from a statutory provision, a common law right to privacy, or an implied obligation to exercise management rights reasonably.5 Arbitrators are generally in agreement that employees have a right to protection from unreasonable violations of their privacy by their employer.

The jurisprudence is not nearly as well developed in the courts. This is not surprising given that employees usually do not challenge their employer's actions in court while they are still employed. In addition, many privacy issues can be framed in better-established causes of action such as nuisance and trespass

However, courts have shown a willingness to hear actions alleging a breach of privacy rights. In Roth v. Roth, 6 the Plaintiff sought damages for (amongst other things) a breach of privacy arising from an access road dispute where the defendants had allegedly obstructed the Plaintiff's access to their cottage. The court analyzed the history of the law of privacy and concluded that there is a right to privacy in Ontario. Having come to this conclusion, the court considered when an individual should be entitled to recover damages for invasion of privacy. In so doing, the court adopted the following reasoning: 

"Clearly, no liability is warranted unless the intrusion is substantial and of a kind that a reasonable person of normal sensitivity would regard as offensive and intolerable. Merely knocking at another's door or telephoning on one or two occasions is not actionable, even when designed to cause annoyance; but if the calls are repeated with persistence, and in the midst of the night, so as to interfere unreasonably with comfort or sleep, liability will ensue." 

The court concluded on the facts of the case before it that the defendant's conduct constituted a harassment of the plaintiffs and was an interference with the enjoyment of their property. It held that such harassment was of a kind that a person of normal sensitivity would regard it as offensive and intolerable and as such was an invasion of the plaintiffs' right to privacy.

The decision in Roth was followed in Sargeant v. Patterson Dental Canada Inc.,7 where the Court rejected a defence motion to strike a privacy claim in an employment action. The case concerned a sexual harassment complaint and the court concluded that "[T]he claim for breach of privacy is novel, but should not be barred at this stage." This clearly opens the door for plaintiffs to claim damages for breaches of privacy in employment cases and we expect that jurisprudence will continue to develop in this area.

Specific Privacy Issues

Labour arbitrators have been at the forefront of defining employee privacy rights. A common theme in all arbitration privacy cases is that breaches of an employee's privacy will only be permissible where the breach was reasonable in all of the circumstances. As the cases discussed below will demonstrate, determining what is "reasonable" is an extremely fact sensitive determination.

(a) Search of Employee Lockers

In Re: Goodyear Canada,8 the employer searched the locker of employees after an expensive piece of equipment disappeared from the workplace. The lockers were not assigned to any specific employee. Some employees put locks on the lockers they used and some did not. The employer sought permission of the employees who used the locks before opening their lockers, but just searched the unlocked lockers without informing the employees affected. The employer argued that it did not need to seek permission of those who did not use a lock as they had no expectation of privacy.

The arbitrator rejected this argument and concluded that the employer ought to have sought the permission of the employees who did not lock their lockers. The arbitrator rejected the notion that the employees who did not lock their lockers had no privacy interest. In the arbitrator's view, this was analogous to suggesting that homeowners who do not lock their doors have no interest in privacy. The arbitrator concluded, however, that the employer's conduct with respect to employees who used the locks was acceptable.

The arbitrator went on to reject the union's argument that the employer was required to have a union steward present during the search or to advise the employees that they were entitled to union representation. The arbitrator reasoned that there was no such provision for union representation in the collective agreement, but noted that this did not mean the employer could deny union representation to an employee who requested it.

This case shows that the threshold for breaching an employee's privacy rights in the search context is a very low one. Goodyear is not a case about the search of an employee's person or possessions. It involved the search of storage equipment owned by the employer, which was not even assigned to individual employees. This low threshold should be borne in mind by employers who may wish to undertake more invasive searches, such as searches of employee bags or even of an employee's person.

Employers must also bear in mind that searches must be conducted in a reasonable manner. For example, the use of intimidation or coercion in obtaining the employee's consent for a search would likely result in a finding of a breach of the employee's privacy rights.

(b) Targeted Video Surveillance of a Specific Employee on the Job

In Re: Brewers Retail, 9 the employer had received customer complaints that the employee was drinking on the job. The employee had a long history of alcohol problems and was suspected of theft due to cash losses. The employer installed hidden video cameras to observe the employee in the front of its retail store and the back warehouse where beer was stored. This resulted in the employer acquiring evidence against the employee, which led to his termination. The union grieved that the surveillance was a breach of the employee's right to privacy and moved that the video surveillance evidence should be excluded at the employee's discharge arbitration.

The arbitrator dismissed the union's motion. The arbitrator employed a commonly used test whereby he considered first whether it was reasonable in all of the circumstances to employ surveillance. The arbitrator then considered whether the surveillance was conducted in reasonable way that corresponds fairly with acquiring information pertinent to the employer's legitimate interest.

The arbitrator ruled that the surveillance was reasonable, given the grievor's history, complaints from the public, the cash shortages, and the fact that the other methods suggested by the union (such as sending in "mystery shoppers") was unlikely to succeed in determining whether the employee was engaging in wrongdoing.

It is important to emphasize that the employer had very strong facts to support the case for surveillance. The employee had a history of alcohol problems, there had been customer complaints related to the employee's condition, cash shortages, and there was no viable alternative to surveillance (i.e. the grievor was alone in the back warehouse and could go to areas of the store where no one could see him drinking). With that said, the arbitrator still recognized that employees have an expectation of privacy even when on the employer's premises.

In light of the foregoing, Ontario employers that are considering employing targeted surveillance must ensure that they exhaust every viable alternative and have clear grounds to suspect wrongdoing by the targeted employee. Otherwise, there is a strong risk that any evidence gathered by the employer through such surveillance will not be admissible.

(c) General Surveillance Impacting on Employees

In Re: Lenworth Metal Products,10 the employer installed surveillance cameras throughout its plant. However, the employer only activated the cameras in its paint shop where it had experienced a fire. The cause of the fire was undetermined (although arson was suspected) and occurred on a day when employees were not working  The cameras in the paint shop were turned on in the paint shop around the clock. The union filed a policy grievance arguing that the surveillance cameras violated the employee's privacy rights and asked that the employer be ordered to remove the cameras.

The arbitrator held that "...there is a pervasive repugnance to the use of electronic surveillance of employee work performance". He reasoned that the employer was not required to disconnect the security cameras that were installed, as there would be "...situations, where, for security or other purposes that electronic surveillance is reasonable and fully justified". However, he concluded that the employer was required to inform the union in writing of any use of the cameras with sufficient notice so that the union may grieve their use.

The arbitrator also considered the issue of the paint shop cameras that were operating separately. The employer argued that the purpose of the cameras was to enhance safety and pointed out that an insurance report recommended the installation of a camera. The arbitrator ruled that given the previous fire there was no question that the employer could operate the cameras when there were no employees in the shop. However, the arbitrator held that given that "it was not made clear" how the cameras would enhance safety in the paint shop and therefore the use of cameras during working hours in the shop was unreasonable.

This case shows how arbitrators have been extremely reluctant to allow employers to use general video surveillance of employees in the absence of a clear and pressing justification. General concerns about safety or security will not justify the use of surveillance cameras. The use of surveillance cameras should be narrowly tailored to address a specific concern.

Consider the hypothetical example of an employer that is experiencing a number of incidents of theft and property damage in its parking lot during working hours. Such an employer may be able to justify surveillance in this instance given that there is clearly a pressing problem and a very valid argument could be made that surveillance would be the only effective way to address the problem. The above example also intrudes on employee privacy rights in a very minimal way, as they would only be filmed for a very brief period.

However, this does not mean that the employer in the above example could use video surveillance in the parking lot in perpetuity. In the event the problem was resolved (the video caught the perpetrators and there were no further incidents) there is a good chance that the union could successfully argue that the extraordinary measure of video surveillance is no longer necessary. 

The bottom line about video surveillance is that it is extremely difficult to uphold in a unionized environment. Even non-unionized employers must appreciate that they could be subject to civil liability in the event that the courts adopt the reasoning of the arbitrators. It should be remembered that the Ontario Divisional Court upheld the Lenworth arbitration case on judicial review.   

(d) Off-Duty Surveillance of Employees

Off duty surveillance of employees is one of the most commonly litigated issues in the privacy context. Most of the cases concern an employer who suspects that an employee is abusing sick leave or worker's compensation benefits and retains an agent to perform surveillance to gather evidence that the employee is malingering. In these cases, the union will invariably argue that the surveillance was an invasion of privacy and the evidence against the employee should be excluded.

There has been considerable debate over whether an employee has any expectation of privacy in a public place. Some arbitrators have concluded that an employee has no such expectation and evidence of such surveillance is admissible without any consideration of privacy.11 However, these arbitrators are in the minority. The majority of arbitrators have concluded that off duty surveillance triggers a privacy interest.

When determining whether off-duty surveillance evidence is admissible, Ontario arbitrators have generally employed the following test that originated in the British Columbia Doman Forest Products case:

1.    Was it reasonable, in all of the circumstances, to request a surveillance?

2.    Was the surveillance conducted in a reasonable manner?

Arbitrators have generally accepted that where an employer has a reasonable basis to believe an employee is defrauding an insurance plan or the WSIB, there are reasonable grounds to conduct surveillance. For example, in Gerdau Courtice Steel,12 the Arbitrator concluded that anonymous information that a malingering employee was exercising at the YMCA was sufficient to justify surveillance. In Re: Canadian Salt Company,13 the employer's use of surveillance was considered reasonable on the basis that the employee's manager witnessed the grievor walking from a manager's office to his vehicle without any difficulty. In Re: Canadian Pacific,14 Arbitrator Picher admitted the surveillance evidence of the malingering grievor after accepting the employer's evidence that the grievor had an unusually high injury rate and the observations of management that the grievor did not appear to be acting in a manner consistent with his alleged injuries.

An example of an injury case where surveillance was not considered reasonable is Re: Toronto Transit Commission (Adams Grievance).15 In this case the employer suspected that the grievor was abusing long-term disability benefits in order to meet childcare responsibilities. The source of the suspicion was a medical report that conflicted with the grievor's stated condition. The grievor was put under surveillance on three separate occasions. This surveillance evidence was excluded at arbitration primarily due to the procedure the employer used to authorize the surveillance.

The employer had a committee in place to authorize surveillance. An executive who testified at the arbitration conceded that he had never read the medical report and had relied on a summary of inconsistencies from another committee member who did not testify at the proceeding. The arbitrator noted that it was difficult to discern the inconsistencies the employer was concerned with given that the individual who pinpointed them did not testify.

The arbitral jurisprudence indicates that an employer is likely to get surveillance evidence admitted in injury cases where it has some objective basis to believe that fraud has occurred. Examples include any eye witness accounts of an employee's behaviour inconsistent with the alleged injuries, any past disciplinary history (especially involving dishonesty), inconsistent medical reports, a higher then average rate of absenteeism, and any objective assessment of the grievor's behaviour when being questioned about his injuries.

The issue of whether the surveillance was conducted in a reasonable manner is not one that has been overly problematic for most employers. However, arbitrators will be concerned where the surveillance involves any illegal activity (i.e. trespass to property) or where the investigator has engaged in entrapment. For example, in Re: Pacific Press,16 the grievor was malingering and a routine phone call to his home answering machine revealed that he was operating a hang gliding school. The investigators called the grievor and made arrangements for a hang gliding lesson. They then filmed the grievor teaching them. The arbitrator concluded that while it was reasonable for the employer to investigate through surveillance whether the grievor was operating a hang gliding school, it was not reasonable to create a situation for which to discipline the grievor. 

On a cautionary note, employers must understand that it will be more difficult to establish that off-duty surveillance of employees is necessary where the misconduct suspected does not relate to fraud. Fraud is a criminal act and arbitrators are more likely to approve the use of extraordinary measures in this context than situations where the employer is gathering evidence about lesser misconduct.

1 See Re: Doman Forest Products Limited [1990] 13 L.A.C. (4th) 275 (Vickers, British Columbia)

2 See Re: Toronto Transit Commission (1998) 79 L.A.C. (4th) 85 (Solamatenko) for an example of a contrary view

3 [1999] 80 L.A.C. (4th) 426 (Armstrong)

4[2000] 29 Admin L.R. (3d) 258 (Div. Court)

5 See the discussion below about this issue in Re: Cuddy Food Products [2002] 111 L.A.C. (4th) 289 (Crljenica) at paragraph 32

6 (1991) 9 C.C.L.T. (2d) 141 (Gen Div.)

7 (1997) 35 C.C.E.L. (2d) 272 (Gen Div.)

8 [1994] 44 L.A.C. (4th) 203 (Newman)

9 [1999] 78 L.A.C. (4th) 394 (Herman)

10 supra, at note 3

11 Re: Toronto Transit Commission (Fallon Grievance) (1999) 79 L.A.C. (4th) 85 (Solametenko) and in Re: Canadian Timken Ltd. (2001) O.L.A.A. No. 564 (Welling)

12 [2000] O.L.A.A. No. 311 (Petryshen)

13 [1999] O.L.A.A. No. 372 (Brown)

14 (1996) 59 L.A.C. (4th) 111 (Picher)

15 (1997) 61 L.A.C. (4th) 218 (Saltman)

16 (1997) 64 L.A.C. (4th) 1 (Devine)

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Disclaimer: The information contained in this article is general information only and should not be relied upon as a substitute for legal advice or opinion.