Employees covertly recording conversations; process overrides substance again

In an era where employers and employees are becoming increasingly attuned to matters of personal privacy, coupled with easily accessible recording technology, it seems a no-brainer that an employee could be justifiably dismissed if they covertly recorded conversations in the workplace.

In the employment jurisdiction, where an employee covertly records a conversation they were/were not a party to, this form of action can amount to a breach of good faith and/or serious misconduct. In the criminal jurisdiction, however, an individual recording a conversation they are not a party to can amount to a crime and (upon conviction) result in a term of imprisonment of up to 2 years.

A recent decision from the Employment Relations Authority (Authority) has exemplified that, where an employer proves an employee covertly recorded conversations in the workplace (especially where an employee admits to making the recordings), this will not absolve that employer of the obligation to act fairly and reasonably in any disciplinary process that may follow.

In the decision of Curnow v Advanced Security Group (STH IS) Limited [2022] NZERA 359, an employee of Advanced Security Group admitted to covertly recording employees in the workplace and was dismissed as a result, following an inadequate disciplinary process.

The dismissed employee brought a successful unjustified dismissal claim, given the inadequate disciplinary process, and was awarded (among other things) 3 months’ lost wages and $9,800 under section 123(1)(c)(i) of the Employment Relations Act 2000 for his humiliation, loss of dignity and injury to feelings.

The key take-homes from the decision are:

  • Even when an employee admits to allegations that amount to serious misconduct, in most cases it’s unlikely an employer could justify proceeding straight to terminating that employee where a full and fair investigation and disciplinary process had not been conducted (although the disciplinary investigation and process can be truncated as a result of such admission).
  • The more serious an allegation (in this instance, the employment allegations bordered on criminal allegations) the more thoroughly an employer is expected to investigate before taking any action to an employee’s disadvantage (such as dismissing them). Noting that the employment investigation should always be separate to any criminal investigation.
  • An employer should not just accept an employee’s admission of serious misconduct and cease any further inquiry. Rather, it is expected to investigate and consider all of the circumstances around the employee’s admitted acts (in this case, the employer could have investigated why the employee felt compelled to record the workplace conversations and taken any response into account before reaching its final decision). A finding of serious misconduct is the first step in the disciplinary process. The employer must then consider any mitigating factors before concluding the process and determining the appropriate penalty, with dismissal being the last option.
  • Where an employee’s actions have contributed to the situation that gave rise to their personal grievance (such as committing an act of serious misconduct that led to their unjustified dismissal claim) the Authority can reduce any remedies awarded to that employee. In a rare case, the Authority can conclude that the employee’s actions amount to ‘egregious conduct’ such that they are not entitled to any remedies.
  • However, where an employee’s actions could amount to serious misconduct (as was accepted by the Authority in this case) it doesn’t automatically equate to a significant reduction in remedies. Rather in this instance, taking in to account the serious procedural failings of the employer in the disciplinary process, the employees lost wages award remained at the standard 3 month mark and their section 123(1)(c)(i) payment was only reduced by 30%.

The Authority stated in its conclusions that, “I stress, this finding should not be taken as condoning Mr Curnow’s actions in covertly recording conversations he was not participating in, and the sometimes problematic nature of recording conversations a person is participating in, without the other party’s permission”. However, the decision is a firm reminder that the Authority’s consideration of ‘contributory conduct’ is not a complete safeguard for an employer’s unsatisfactory disciplinary process – process overrides substance.

If you have any concerns regarding covert recordings in your workplace, please don’t hesitate to contact a member of our Employment Law team.

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