16 November 2010 Benefits and pitfalls of social media for your business - do you have the right policies in place?


In brief - Increasing use of social media

Social media is being used increasingly, not only by individuals personally, but also by people who wish to promote their businesses and themselves in a professional or business capacity. Social media can be a powerful tool for achieving these ends.

Difficulty of corporate control over social media

The level of control that businesses have traditionally been able to exercise on the public statements that they make and on the image that they project to the public has the potential of all but disappearing in the "always on" social networking age. With the increased use of social media and the sharp decline in corporate control come increased risks for business. These risks include liability for what may be posted or disclosed on a social networking site and possible reputational damage.   

Any business that wants to reap the full benefits of social media needs to ensure that the business is properly protected and that the risks are minimised. This can be a delicate balancing act, given that the type of control traditionally exercised is the antithesis of user generated content and of communications that are "one to many" in the social networking environment.

Employers and social media

Employers need to know what their rights are in controlling and monitoring their employees' electronic communications, including their use of social networking sites like Facebook, Twitter and LinkedIn. Every employer also needs to be aware of its rights and remedies if an employee makes inappropriate use of social media, such as posting a defamatory comment or disclosing confidential information about the employer's business or clients.

No secrets on the internet

Employers are not excluded from viewing publicly available information that can be found through search engines, such as Google, or social media networking sites. This means employees need to be aware that publishing information or images in the public domain may result in those employees intentionally or unintentionally expressing information about, or to, their employer. Employees also need to understand that there is a very real and important difference between personal communications and private communications. Once a communication is made in a social networking environment, there is no guarantee that it will remain private. The crucial point that employees need to grasp is that anything which is posted online cannot be recalled. Once information is online, it can be impossible control who views it and disseminates it further.

Information collection and privacy

Employers need to be aware that there are certain restrictions under the Commonwealth Privacy Act 1988 that prohibit the unauthorised collection of personal information. Whilst there are exemptions in relation to "employee information", information that an employee posts in a personal capacity may not fall within this exemption.   

Employers need to take care when collecting or making use of that information not to breach their obligations to their employees (or to anyone else) in relation to privacy. Every business must have a privacy policy that includes what information the employer may collect and use, including information in the digital domain and information that may be posted by employees in a non work related capacity.

Monitoring of employees' online activity

In some cases, employees have been caught attempting to claim sick leave from an employer in circumstances where their communications on social media networks prove that they are not genuinely ill. (See the October 2008 article Sickie faker busted by Facebook.)

An employer is not necessarily prohibited from monitoring an employee's email or online activity at work to determine the employee's activities, productivity, the extent to which the employee may be distributing confidential information or any inappropriate conduct towards other employees or members of the public. However, in NSW any monitoring of the conduct of an employee, including use of a social network, the internet or email must be in accordance with an appropriate surveillance or monitoring policy that complies with the NSW Workplace Surveillance Act. Every business needs to be able to demonstrate that it has such a policy and that every employee is aware of it and understands it. 

Educating staff about social media

Many businesses are now providing guidance to their staff on the appropriate uses of social media to ensure that the conduct of employees is appropriate. The aim is to minimise any risks that the business could be exposed to as a result of something that an employee posts online, whether in a personal capacity or otherwise. All staff must understand that they have a responsibility to avoid exposing the business to any liability or to the risk of reputational damage.  

We have recently assisted many clients with their plans to implement compliant risk management solutions which provide constructive guidance to employees on appropriate ways to behave and which identify and manage the risks that a business may face as a result of encouraging its staff to promote themselves and the business through social networking. Companies which take a prudent approach to managing online risk stand to reap significant rewards from social media.

Practical advice for employers
  • Ensure your company has appropriate and up-to-date policies which deal with privacy and with the use and monitoring of email, the internet and social media
  • Ensure that on commencement of employment, and regularly during employment, every employee receives training in, and acknowledges in writing that they understand and agree to comply with, these policies and they understand that they may be dismissed for contravening them 
  • Educate your staff on the appropriate use of social media; this education should be mandatory for current staff and form part of the induction process for all new employees
  • In particular, make sure employees understand that their online postings can be disseminated by others and that there is a difference between what they post online in an individual capacity and what they post as employees of the company

If you would like any further information or advice in relation to these issues, or assistance in implementing appropriate social media, electronic communication or privacy policies for your business, or have any other queries in relation to any of these matters, please contact Swaab Attorneys.

Authored by M Hall.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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