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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 rbo@swaab.com.au.