Pub­li­ca­tions

Work­place Sur­veil­lance Act 2005 (NSW) Admis­si­bil­i­ty of evi­dence unlaw­ful­ly obtained- lat­est developments

When it comes to the ques­tion of work­place sur­veil­lance, there are some employ­ers who are not aware of the impli­ca­tions of applic­a­ble work­place sur­veil­lance leg­is­la­tion, and who dis­cov­er its sig­nif­i­cance only when a chal­lenge is made to evi­dence secured through work­place sur­veil­lance activ­i­ties. In NSW, it is the require­ments of the Work­place Sur­veil­lance Act 2005 (Act) which need to be met.

In the above con­text, the ques­tion aris­es as to whether evi­dence acquired through work­place sur­veil­lance oth­er than in accor­dance with applic­a­ble work­place sur­veil­lance leg­is­la­tion can be utilised by an employ­er in legal pro­ceed­ings. Of par­tic­u­lar rel­e­vance is, where an employ­er wish­es to use such evi­dence to defend a deci­sion to ter­mi­nate an employ­ee in cir­cum­stances where the employ­ee has brought a claim for unfair dis­missal.

In a recent deci­sion of the Full Bench of the Fair Work Com­mis­sion in Krav Maga Defence Insti­tute Pty Ltd t/​a KMDI v Saar Markovitch (C2018/6094) — 19 June 2019, the Full Bench direct­ed its atten­tion to this ques­tion and hand­ed down a deci­sion which exam­ines the admis­si­bil­i­ty of evi­dence obtained oth­er than in accor­dance with the require­ments of, rel­e­vant­ly, the Act. The deci­sion is also note­wor­thy for its com­men­tary on the Small Busi­ness Fair Dis­missal Code.

Work­place Sur­veil­lance Act 2005 (NSW)

Before look­ing at the deci­sion of the Full Bench Com­mis­sion in Markovitch (and the deci­sion appealed from), it is rel­e­vant to briefly review the Act. 

In New South Wales as in oth­er states and in ter­ri­to­ries across Aus­tralia, there is ded­i­cat­ed work­place sur­veil­lance legislation. 

In New South Wales, the Act, amongst oth­er things, impos­es a reg­u­la­to­ry frame­work for the sur­veilling of employ­ees. A fail­ure to adhere to the require­ments of the Act can result in cost­ly penal­ties on employers. 

Gen­er­al­ly speak­ing, the Act requires that employ­ees who are to be sur­veilled must first be pro­vid­ed with notice of at least 14 days before the sur­veil­lance com­mences, or a less­er peri­od if the employee(s) agrees. New employ­ees must be giv­en notice before they start work. 

Notice of pro­posed sur­veil­lance must indicate: — 

  • the kind of sur­veil­lance to be car­ried out (cam­era, com­put­er or tracking); 
  • how the sur­veil­lance will be car­ried out; 
  • when the sur­veil­lance will start; 
  • whether the sur­veil­lance will be con­tin­u­ous or inter­mit­tent; and 
  • whether the sur­veil­lance will be for a spec­i­fied lim­it­ed peri­od or ongoing.

Com­put­er sur­veil­lance must not be car­ried out unless in accor­dance with the pol­i­cy of the employ­er and the employ­ee has been noti­fied in advance of the pol­i­cy in such a way that it is rea­son­able to assume the employ­ee under­stands and is aware of the pol­i­cy. Addi­tion­al require­ments exist con­cern­ing restric­tions on block­ing emails and inter­net access.

Track­ing sur­veil­lance, for exam­ple of a vehi­cle, must not be car­ried out unless there is a clear notice vis­i­ble on the vehi­cle indi­cat­ing that it is sub­ject to track­ing surveillance. 

Cam­era sur­veil­lance must not be car­ried out unless the cam­eras used for sur­veil­lance are clear­ly vis­i­ble and there are signs noti­fy­ing that peo­ple may be under sur­veil­lance which are clear­ly vis­i­ble at each entrance to the place at which the sur­veil­lance is situated.

It should also be observed that sur­veil­lance is tak­en to com­ply with the above require­ments if the employee(s) has agreed to the car­ry­ing out of sur­veil­lance at the place where it is tak­ing place for a pur­pose oth­er than the sur­veil­lance of employ­ees and sur­veil­lance is car­ried out in accor­dance with that agreement. 

Deci­sion of Com­mis­sion­er Riordan

On 18 Octo­ber 2018 in Mr Saar Markovitch v Krav Maga Defence Insti­tute Pty Ltd t/​a KMDI (U2018/6030) Com­mis­sion­er Rior­dan con­sid­ered an appli­ca­tion by a respon­dent employ­er to dis­miss an unfair dis­missal claim on a juris­dic­tion­al ground. The employ­er argued that ter­mi­na­tion had been in accor­dance with the Small Busi­ness Fair Dis­missal Code, and there­fore the Com­mis­sion could not enter­tain the unfair dis­missal appli­ca­tion fur­ther. Short­ly stat­ed, the Small Busi­ness Fair Dis­missal Code (a code apply­ing to busi­ness­es of 14 or less employ­ees) pro­vides a frame­work for dis­missal, which if com­plied with by an employ­er, pro­vides a juris­dic­tion­al bar to a claim for unfair dis­missal pro­ceed­ing further.

The claim by the employ­ee, Mr Markovitch, arose fol­low­ing his dis­missal essen­tial­ly on safe­ty grounds. The employ­ee was the man­ag­er of a gym and the only full-time employ­ee at the gym. At the gym, a spe­cialised full con­tact mar­tial arts/​self defence sys­tem known as Krav Maga was taught. It was a defence sys­tem which orig­i­nat­ed in the 1940s in Israel and is prac­tised by the Israeli Army and oth­er coun­tries for use by mil­i­tary and police forces. 

It was com­mon ground that Krav Maga is an inher­ent­ly high-risk phys­i­cal con­tact and self defence sys­tem. It is for this rea­son that par­tic­i­pants must be con­tin­u­ous­ly and close­ly super­vised by a qual­i­fied cer­ti­fied instructor. 

The employ­ee’s employ­ment was ter­mi­nat­ed on the grounds of not pro­vid­ing super­vi­sion to stu­dents dur­ing class­es in accor­dance with his employ­er’s policies.

To ensure the pro­tec­tion and safe­ty of both par­tic­i­pants and instruc­tors, the employ­er’s premis­es was mon­i­tored by CCTV cam­eras. The employ­ee was aware of this and had dis­cussed with the own­er, plans to install cam­eras and had actu­al­ly autho­rised the pay­ment of a con­trac­tor to do so.

Fol­low­ing a review of the CCTV footage at the gym, the own­er observed that on var­i­ous occa­sions the employ­ee was not super­vis­ing the class. When con­front­ed with this, the employ­ee ini­tial­ly offered to resign how­ev­er the res­ig­na­tion was sub­se­quent­ly with­drawn, such with­draw­al being accept­ed. How­ev­er sub­se­quent­ly, the employ­er made the deci­sion to sum­mar­i­ly dis­miss the employee.

Fol­low­ing ter­mi­na­tion, the employ­ee brought a claim for unfair dis­missal. It was com­mon ground that the deci­sion to ter­mi­nate was informed by the CCTV footage. How­ev­er, the employ­er had failed to adhere to two key require­ments under the Act, name­ly the pro­vi­sion of signs in the work­place con­cern­ing cam­era sur­veil­lance and sec­ond­ly the require­ment to pro­vide at least 14 days’ notice in writ­ing to an employ­ee before the CCTV sys­tem start­ed recording.

As a result of the above fail­ures, Com­mis­sion­er Rior­dan deter­mined that the record­ings were inad­mis­si­ble and could not be relied upon as evidence. 

The Com­mis­sion­er fur­ther deter­mined that the breach of safe­ty as alleged by the employ­er was not of suf­fi­cient mag­ni­tude to over­ride’ the pro­vi­sions of the Act. The Com­mis­sion­er also observed that even if he was mind­ed to allow the video record­ing into evi­dence, the employ­ee’s con­duct did not cre­ate an immi­nent risk of seri­ous injury to him or any of the students.

Com­mis­sion­er Rior­dan deter­mined that the record­ings were obtained ille­gal­ly” and that the employ­er had no evi­dence to draw an infer­ence that a seri­ous safe­ty inci­dent had occurred. There­fore, the employ­er had not sat­is­fied the pro­vi­sions of the Small Busi­ness Fair Dis­missal Code. Hav­ing not met those require­ments, its juris­dic­tion­al objec­tion to the mat­ter pro­ceed­ing fur­ther, was dismissed. 

Deci­sion of the Full Bench of Fair Work Commission 

The employ­er suc­cess­ful­ly chal­lenged Com­mis­sion­er Rior­dan’s deci­sion to dis­miss its juris­dic­tion­al chal­lenge to the unfair dis­missal claim. 

The Full Bench com­pris­ing Sams DP, Gos­tenc­nik DP and McK­in­non C unan­i­mous­ly grant­ed leave to appeal and over­turned Com­mis­sion­er Rior­dan’s deci­sion, uphold­ing all grounds of appeal in a deci­sion hand­ed down on 19 June 2019 (Krav Maga Defence Insti­tute Pty Ltd t/​a KMDI v Saar Markovitch (C2018/6094)).

The Full Bench then referred the mat­ter to a dif­fer­ent Com­mis­sion­er to resolve a range of issues aris­ing from its deci­sion, includ­ing whether: the dis­missal had been con­sis­tent with the Code, whether in this case CCTV footage should be admit­ted into evi­dence (as a mat­ter for dis­cre­tion) hav­ing regard to its con­clu­sions, whether if the dis­missal was not con­sis­tent with the Code the dis­missal was harsh, unjust or unrea­son­able (e.g. the ter­mi­na­tion was unfair) and what rem­e­dy would then follow. 

In oth­er words, the Full Bench left it for anoth­er Com­mis­sion­er to essen­tial­ly resolve all rel­e­vant issues in the case from scratch” includ­ing to recon­sid­er the juris­dic­tion­al objec­tion by the employer.

How­ev­er, the Full Bench’s deci­sion is instruc­tive in that it shines a light on its views con­cern­ing the admis­si­bil­i­ty of evi­dence obtained oth­er than in accor­dance with the require­ments of rel­e­vant state work­place sur­veil­lance leg­is­la­tion, and on the appli­ca­tion of the Small Busi­ness Fair Dis­missal Code.

The Full Bench was recep­tive to the ground of appeal advanced which assert­ed that Com­mis­sion­er Rior­dan had failed to pro­vide ade­quate rea­sons for reject­ing the employ­er’s argu­ment that the CCTV sur­veil­lance had actu­al­ly been car­ried out in com­pli­ance with sec­tion 14 of the Act. 

Sec­tion 14 of the Act pro­vides that an employ­er is tak­en to com­ply with the require­ments of the Act with respect to the car­ry­ing out sur­veil­lance if, it is with the agree­ment of an employ­ee (or a body rep­re­sent­ing a sub­stan­tial num­ber of employ­ees) and where it is tak­ing place for a pur­pose oth­er than sur­veil­lance of employ­ees and such sur­veil­lance that is car­ried out, is car­ried out in accor­dance with that agreement. 

The Full Bench accept­ed that the Com­mis­sion­er had failed to ade­quate­ly explain his rea­sons for reject­ing the employ­er’s sub­mis­sions on the Sec­tion 14 exemp­tion, which was in its view, an error suf­fi­cient in itself to uphold the Appeal. 

It then pro­ceed­ed to deter­mine that in fact there was a suf­fi­cient evi­den­tiary foun­da­tion to sup­port the sub­mis­sion by the employ­er that the sur­veil­lance had in fact occurred with the agree­ment of the employ­ee and was for a pur­pose oth­er than the sur­veil­lance of employ­ees, (name­ly, at least for the pro­tec­tion of employ­ees and stu­dents). It fol­lowed there­fore that the exemp­tion set out in sec­tion 14 did apply and the CCTV footage was not unlaw­ful­ly obtained. Such a find­ing meant that the Com­mis­sion­er’s basis for refus­ing to admit the evi­dence fell away. 

The Full Bench then pro­ceed­ed to look at the sub­mis­sion that the Com­mis­sion­er was in error in pro­ceed­ing on the basis that if the CCTV footage did not com­ply with the Act (and was there­fore unlaw­ful­ly obtained) it was nec­es­sar­i­ly or auto­mat­i­cal­ly inad­mis­si­ble. To the extent to which the Com­mis­sion­er may have so con­clud­ed, that approach was incorrect. 

The approach advanced by the employ­er was that even if the mate­r­i­al was unlaw­ful­ly obtained whether to admit it was: 

  • A mat­ter of dis­cre­tion under sec­tion 590 of the Fair Work Act 2009; and
  • Such dis­cre­tion might be guid­ed by the test for admis­si­bil­i­ty of evi­dence where evi­dence is obtained unlaw­ful­ly ‑as pro­vid­ed for under the Evi­dence Act 1995 (Cth).

Sec­tion 590 of the Fair Work Act pro­vides that the Fair Work Commission may inform itself in rela­tion to any mat­ter before it, in such man­ner as it con­sid­ers appro­pri­ate. Sec­tion 591 of the Fair Work Act states that the Fair Work Com­mis­sion is not bound by the rules of evi­dence and pro­ce­dure in rela­tion to a mat­ter before it. In prac­tice the Fair Work Com­mis­sion tends to fol­low rules of evi­dence (see Thomp­son V John Hol­land Group Pty Ltd [2012] FWA 10363 per Williams C).

Sec­tion 138(3) of the Evi­dence Act (Cth) con­tains cri­te­ria which a Court must have regard to deter­min­ing whether or not to admit evi­dence improp­er­ly or unlaw­ful­ly obtained. 

Such mat­ters include for example: 

  • Pro­ba­tive val­ue of the evidence;
  • Impor­tance of the evidence;
  • Nature of the rel­e­vant offence, cause of action or defence and the nature of the sub­ject mat­ter of the proceeding;
  • Grav­i­ty of the impro­pri­ety or contravention;
  • Whether it was delib­er­ate or reckless;
  • Var­i­ous oth­er matters.

The Full Bench agreed with the employ­er’s sub­mis­sion that the Com­mis­sion­er’s approach in auto­mat­i­cal­ly exclud­ing the CCTV footage was wrong and an error of law. It was incon­sis­tent with the exer­cise of dis­cre­tion and to the con­sid­er­a­tions aris­ing under sec­tion 138 of the Evi­dence Act. Hav­ing said that, the Full Bench not­ed that the Com­mis­sion­er was not nec­es­sar­i­ly bound to adopt the pro­vi­sions of s 138(3) of the Evi­dence Act in inform­ing him­self in any man­ner he saw fit. 

The Full Bench also not­ed an ear­li­er Full Bench deci­sion in Hail Creek Coal Pty Lim­it­ed v Con­struc­tion, Forestry, Min­ing and Ener­gy Union [2004] 143 IR354 in rela­tion to sec­tion 109 of the Con­sti­tu­tion. In the Hail Creek deci­sion that Full Bench accept­ed the con­tention by Hail Creek that sec­tion 109 of the Con­sti­tu­tion per­mit­ted the Com­mis­sion to receive evi­dence in a man­ner that over­rides any lim­i­ta­tions under State law.

To con­clude on this point, the Full Bench not­ed that it had a dis­cre­tion under the Fair Work Act to deter­mine what evi­dence it wished to admit, includ­ing in rela­tion to mate­r­i­al that was unlaw­ful­ly obtained. Fur­ther that it was not nec­es­sar­i­ly bound to adopt the pro­vi­sions of sec­tion 138(3) of the Evi­dence Act when decid­ing to inform itself in any man­ner it saw fit. 

It reject­ed the Com­mis­sion­er’s approach being one in which the Com­mis­sion­er appeared to accept that because of the Work­place Sur­veil­lance Act being breached the CCTV the footage evi­dence was there­fore inad­mis­si­ble and that was the end of the matter. 

The Full Bench then con­sid­ered the next ground of appeal which dealt with the Com­mis­sion­er’s find­ing that even if the CCTV footage had been admit­ted into evi­dence the con­duct of the employ­ee did not cre­ate an immi­nent risk of seri­ous injury. 

The employ­er sub­mit­ted that such a find­ing could only be read as a con­clu­sion by the Com­mis­sion­er that he would reject the juris­dic­tion­al objec­tion because the dis­missal itself did not com­ply with the Small Busi­ness Fair Dis­missal Code.

The Full Bench accept­ed the employ­er’s argu­ment that in deter­min­ing whether an employ­er had com­plied with the Small Busi­ness Fair Dis­missal Code, the test was whether or not the employ­er had a rea­son­able basis to believe” that the employ­ee’s con­duct was suf­fi­cient­ly seri­ous to jus­ti­fy imme­di­ate dismissal. 

The Full Bench quot­ed with approval, a deci­sion in Grand­bridge Lim­it­ed v Wiburd [2017] FWCFB 6732 in which the Full Bench in that case had said the following: 

… [14] it is arguable that the Deputy Pres­i­dent fell into error by ask­ing her­self the wrong ques­tion in focus­ing on whether Ms Wibur­d’s con­duct was seri­ous enough” to sus­tain sum­ma­ry dis­missal. The prop­er inquiry raised by the Code is rel­e­vant­ly, whether at the time of the dis­missal the employ­er gen­uine­ly believes on rea­son­able grounds that the employ­ee’s con­duct is suf­fi­cient­ly seri­ous to jus­ti­fy imme­di­ate dismissal…..”

The Full Bench con­sid­ered that evi­dence pro­vid­ed the foun­da­tion for a rea­son­able belief by the employ­er that there was an immi­nent risk to the safe­ty of stu­dents aris­ing from the employ­ee’s lack of super­vi­sion. The evi­dence includ­ed for exam­ple: the nature of the Krav Maga tech­nique, the pre­vi­ous death of a stu­dent and the rel­e­vant poli­cies. Also, the employ­ee’s repeat­ed con­duct, the fact he was on notice from ear­li­er warn­ings and his acknowl­edge­ment of wrongdoing. 

The Full Bench con­clud­ed that the Com­mis­sion­er had fall­en into error by ask­ing him­self the wrong ques­tion name­ly, whether the con­duct itself was suf­fi­cient­ly seri­ous to jus­ti­fy imme­di­ate dismissal.

To con­clude, the appeal was suc­cess­ful and the deci­sion of Com­mis­sion­er Rior­dan quashed, with the mat­ter being referred to anoth­er Com­mis­sion­er for determination. 

Lessons for Employers 

The first point to be made is that employ­ers in every state and ter­ri­to­ry should famil­iarise them­selves with applic­a­ble local work­place sur­veil­lance leg­is­la­tion, and ensure that if they wish to sur­veil their staff, that they com­ply with the require­ments of that leg­is­la­tion. A fail­ure to do so apart from poten­tial­ly expos­ing employ­ers to penal­ties, can also cre­ate a sig­nif­i­cant (but not nec­es­sar­i­ly insur­mount­able) hur­dle to over­come, in the event that an employ­er wish­es to rely upon evi­dence unlaw­ful­ly obtained. 

The fol­low­ing points emerge from the deci­sion of the Full Bench in Markovitch: 

  • Evi­dence obtained through work­place sur­veil­lance for exam­ple in NSW where the employ­er has not met the require­ments of the Work­place Sur­veil­lance Act 2005, is evi­dence unlaw­ful­ly obtained. Whether it will be admit­ted into evi­dence or not, is a mat­ter for the court or tri­bunal hear­ing the mat­ter to deter­mine. In unfair dis­missal cas­es it will be the Fair Work Com­mis­sion.
  • The Fair Work Com­mis­sion has a wide dis­cre­tion under sec­tion 590 of the Fair Work Act to inform itself in rela­tion to any mat­ter before it in such man­ner as it con­sid­ers appro­pri­ate, and can admit evi­dence obtained in breach of the require­ments of work­place sur­veil­lance legislation. 
  • The Fair Work Com­mis­sion is not bound by the rules of evi­dence and pro­ce­dure (sec­tion 591 of the Fair Work Act).
  • In inform­ing itself in any man­ner it sees fit and con­sid­er­ing whether or not to admit evi­dence unlaw­ful­ly obtained, the Com­mis­sion is not nec­es­sar­i­ly bound to adopt the pro­vi­sions of sec­tion 138(3) of the Evi­dence Act (Cth). How­ev­er, in the case of Markovitch it con­sid­ered it was plain­ly appro­pri­ate to do so. 
  • In assess­ing whether an employ­er can rely upon the Small Busi­ness Fair Dis­missal Code in the con­text of sum­ma­ry ter­mi­na­tion, the test will be whether or not the employ­er believed on rea­son­able grounds that the con­duct was suf­fi­cient seri­ous to jus­ti­fy imme­di­ate dis­missal (not whether the con­duct was seri­ous enough to sus­tain sum­ma­ry dismissal).

If hav­ing ques­tions please do not hes­i­tate to con­tact the writer, Richard Ott­ley, Part­ner at Swaab on 02 9777 8380 or on [email protected]​swaab.​com.​au.