Legal update: Playback time – the rise of covert audio recordings in the workplace

With rapid advancements in technology and the almost universal use of smartphones and other mobile devices, employees can (and do) take photographs and make both video and audio recordings at work with just the click of a button. Consequently, employers are increasingly aware that this means that the vast majority of  employees have a potential covert recording device with them at all times during the working day, as well as after office hours.

Decision by the UK’s Employment Appeal Tribunal (EAT)

Case summary

In the recent case of Phoenix House Ltd. v Stockman, the EAT took the opportunity to clarify the UK law on covert audio recordings made by employees during meetings with their employers.

The employee (Stockman) successfully claimed unfair dismissal against her employer, Phoenix House, and was awarded compensation by the Employment Tribunal (ET) – compensation which was reduced by 20% (for reasons which were irrelevant to Stockman’s subsequent appeal to the EAT), and by a further 10% because she had covertly made an audio recording of a meeting between her and Phoenix House’s HR director (as disclosed by Stockman during the conduct of the ET proceedings).

Phoenix House appealed from the ET’s decision, arguing that Stockman’s covert audio recording (i) constituted a breach of the implied term of trust and confidence between an employee and employer, and (ii) was dishonest, in that it was designed to obtain an advantage for Stockman and place Phoenix House at a disadvantage. Phoenix House submitted that the ET should have reduced Stockman’s compensation not by just 10% for the covert audio recording, but by 100% to zero.

EAT’s decision

The EAT rejected the argument that a covert audio recording by an employee of a meeting with his/her employer is necessarily a breach of the implied term of trust and confidence, such that it would justify a subsequent dismissal of the employee. The EAT recognised that there may be “pressing circumstances” which may fully justify covertly recording a meeting, and which may therefore mean that the implied duty of trust and confidence remains intact by an employee surreptitiously making an audio recording of a meeting or discussion with his/her boss.

The EAT decided that Stockman had not recorded her meeting with the Phoenix House HR director with any intention of entrapment, and that she had recorded a single meeting concerned with her own position, rather than the confidential information of the business, or of other individuals. Although the EAT commented that some ETs might have awarded a greater reduction than the 10% reduction awarded by the ET in this case, the matter was one for the ET’s assessment. The EAT concluded that the ET had not made a mistake in law and had not reached a “perverse or unreasoned result”, and therefore dismissed the appeal.

When does covert recording constitute misconduct (justifying dismissal)?

The EAT recognised that an employee who is aware that making a covert audio recording is prohibited, or who lies about making a recording was more blameworthy than say, an employee who had given little thought to the ramifications of his/her actions.

The EAT provided some guidance by identifying the following relevant considerations for when a covert recording may constitute misconduct:

• Purpose of the recording: Is the employee deliberately and manipulatively trying to trap the employer, or is the employee confused and/or vulnerable and simply trying to keep a record or guard against misrepresentation?
• Blameworthiness of the employee: Has the employee been specifically told not to make a recording, or has he/she lied about doing so? Is the employee so inexperienced that he/she wouldn’t have considered the potential for criticism arising from his/her conduct?
• Subject-matter of the recording: Is it a discussion or meeting involving highly confidential business information, or the employee’s own personal information? Is the personal information of another employee discussed, which may involve a serious breach of the rights of that employee? Is it a meeting of which a record would usually be kept and shared anyway?
• Attitude of the employer: Is covert recording treated as misconduct / gross misconduct in the employer’s own disciplinary policies and procedures?

In the Stockman case, the EAT decided that the ET was entitled to assess the particular circumstances of the recording when making its reduction to the award for unfair dismissal. In this case, the ET’s assessment was that Stockman had not recorded the meeting intending to trap her employer. For example, she had not asked any questions which would give the impression of someone attempting to further their own self-interested cause. The facts of this case showed that Stockman was flustered when she recorded the meeting, and was unsure whether the device was actually working or not. The EAT also found that Stockman’s meeting with the Phoenix House HR director concerned only her own position, and did not involve confidential business or personal information belonging to other individuals – a factual matrix all in Stockman’s favour.

What can employers learn from the Stockman case?  

In circumstances where a covert audio (or video) recording made by an employee could trigger disciplinary action against the employee, it is well worth considering whether the employee has breached the implied term of trust and confidence or, in extreme cases, even committed an act of (gross) misconduct justifying dismissal.

With the EAT’s guidance in mind, employers should consider:-

• adding covert (audio and video) recording as an act of misconduct or gross misconduct in internal disciplinary policies and procedures, and regularly reminding employees of this important internal policy which is designed to maintain trust and confidence between employer and employee, as well as between employees themselves;
• asking employees to confirm whether they are recording a discussion or meeting (if employees disobey a legitimate instruction not to make a recording, this should count against them in the final analysis);
• stating an intention to record a discussion or meeting wherever they intend to do so, and engaging with employees on whether producing a recording is a good idea for all parties concerned; or
• treating any discussion or meeting in the workplace as if it is being covertly recorded (although this ultra-conservative approach would almost certainly be to the detriment of a happy, efficient and collegiate working environment, so would definitely be counter-productive)!

Employers beware: Even though covert recoding by an employee does not automatically constitute a breach of the implied term of trust and confidence, the same is highly unlikely to be true of covert recordings made by the employer. None of the potentially mitigating circumstances identified by the EAT in Stockman would usually be available to the employing business.

Legality / admissibility of covert recordings in the workplace (Hong Kong)

Article 30 of Hong Kong’s Basic Law recognises the freedom and privacy of communication of Hong Kong residents as a fundamental right.

“The freedom and privacy of communication of Hong Kong residents shall be protected by law. No department or individual may, on any grounds, infringe upon the freedom and privacy of communication of residents except that the relevant authorities may inspect communication in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.”

Nevertheless such a right is not absolute, and a person who is covertly recorded may argue that someone else obtaining and using the recording is in breach of his/her right to privacy.

Despite possible implications under the Basic law, what recent case law in the UK shows is that Employment Tribunals have a wide discretion as to whether to admit covert recordings into evidence. Employment Tribunals are generally more lenient with regard to admissibility of evidence (to be used in Employment Tribunal proceedings), so long as relevance can be demonstrated. Given that there has been little development in this area in Hong Kong, the Stockman case and its guidelines are likely to have some degree of influence over Presiding Officers in the Labour Tribunal in Hong Kong.

Comment

Tying together the recent UK Stockman case with previous case law on covert recordings, prudent employers should explain at the beginning of certain types of meetings with employees (usually relating to their employment status / advancement / performance appraisals etc.) the rationale for recording or not recording the meeting by reference to internal policies and procedures which have been widely implemented and disseminated amongst the employees. That way, expectations have been clearly set out and managed, and are transparent for all parties concerned.

If an employer does not want a discussion or meeting to be recorded, employees should (before the start of the discussion or meeting) be cautioned against covertly recording, and clearly advised of the adverse consequences of doing so.

These are sensible proactive, protective measures for employers to take, and will factor into the assessment of an Employment Tribunal around both the admissibility and impact of covert (audio and video) recordings made by employees.

Kevin Bowers

The above is not intended to be relied on as legal advice and specific legal advice should be sought at all times in relation to the above.

If you would like to discuss any of the matters raised in this article, please contact:

Kevin Bowers
Consultant | E-mail

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.