Unfair dismissal and your finger’s right to privacy

Key points
  • The Fair Work Commission held an employer’s direction to an employee to consent to providing fingerprint data was unlawful. Therefore, the employee’s failure to comply with this unlawful direction was not a valid reason for termination and his subsequent dismissal was unfair.
  • This case demonstrates why employers must consider their employee’s right to privacy when implementing workplace policies and when acting on these policies.

The pressures on employers are vice-like. How do you comply with the requirements of the Fair Work Act to keep accurate attendance records to ensure correct pay, without monitoring employee attendance accurately? Unfortunately, some employees are not always truthful about such matters.  Even to the extent of having other employees ‘bundy on’ for them. So it is not a stretch for an employer to want to introduce a system involving a truly accurate personal identifier. And what could be more accurate than the use of employee finger prints? 

Well, not all employees are open to such ‘intrusive’ options. Just as not all employees are trustworthy; unsurprisingly, some employees are suspicious of the motives of some employers in introducing such a deeply personal system. They are understandably doubtful as to whether the employer will show commensurate care in the retention of such potentially damaging information as personal digit pattern data.    

In a recent decision of the Full Bench of the Fair Work Commission (Full Bench), the Full Bench gave comfort to such employee reservations.  It made its point by supporting an employee who had been terminated for not agreeing to participate in such a monitoring system. The Full Bench quashed an earlier decision which wrongly decided an employee could be dismissed for not complying with an unlawful direction to follow company policy. The Full Bench decided the employer’s direction to an employee to consent to provide personal information was unlawful and therefore the employee’s failure to comply with the direction was not a valid reason for his termination. When considering this claim, the Full Bench also discovered the employer breached multiple privacy principles, emphasising that employers must repeatedly check whether their internal policies comply with the law.

Background

Jeremy Lee (Lee) was a casual factory hand employed by Superior Wood (Employer), an Australian sawmill operator. The Employer implemented a workplace policy requiring its employees to provide fingerprint data to the Employer for the purposes of enhancing the efficiency and integrity of its payroll system. However, Lee refused to provide this data to the Employer. Subsequently, Lee was given a notice of dismissal and given multiple opportunities to respond to the Employer’s request that he provide his fingerprint data. However, he continued to refuse to provide this data and was later terminated.

Following his termination, Lee brought an unfair dismissal claim. The Full Bench agreed, deciding the employer’s direction to provide personal information did not comply with the Privacy Act 1988 (Cth). Therefore, Lee was fired for not complying with an unlawful direction, constituting unfair dismissal. We will now discuss how the Employer contravened the Privacy Act 1988 (Cth), how one of these contraventions caused their direction to be unlawful, and how Lee’s dismissal was therefore unfair.

Privacy Contraventions

The Full Bench decided the Employer breached the Australian Privacy Principles (APPs). The APPs are rules outlining how most Australian organisations must handle, use and manage personal information.

The APPs which were breached are:

a)            (Open and Transparent Management of Personal Information)

b)            (Collection of Solicited Personal Information); and

c)            (Notification of the Collection of Personal Information).

The employer breached (a) by not implementing a privacy policy in the workplace.

The employer breached (b) by directing Lee to consent to provide personal information. Employers must not require employees to provide consent because that in turn is not consent. The Full Bench further commented that any consent given by Lee after a direction from his employer that he must provide consent or face disciplinary action would be ineffectual.

The employer breached (c) because it did not issue employees with a privacy collection notice when it requested access to their biometric data.

Valid reason for termination                                          

The Employer argued Lee’s failure to comply with its direction to consent to provide personal information warranted his dismissal; however, the Full Bench rejected this argument. The Full Bench held that a valid reason is one which is ‘sound, defensible, or well founded, and not capricious, fanciful, spiteful or prejudiced’.

Since it found the direction was unlawful under privacy legislation, Lee’s failure to comply with the direction was not be a sound, defensible or well-founded reason for his dismissal. Thus, the Full Bench held Lee was terminated without valid reason and it was an unfair dismissal.

Takeaway

The takeaway from this case is two-fold. The obvious first principle is that employers must ensure they only terminate employees for valid reasons.  We all know that!  The second was the more interesting, namely: employers must comply with privacy legislation when collecting such deeply personal information. If the employer does not comply with the National Privacy Principles, then their reason for terminating the employee may not be valid.

Even though many businesses assume they are not subject to the Privacy Act 1988 (Cth) because they earn less than $3 million annually, the exemption extends only to conventional employee records. Not – for example – finger print data.  Seeking to retain such information attracts the attention of the National Privacy Principles.  Therefore, employers should obtain legal advice on whether privacy legislation applies to them and, if it does, what policies/procedures they must implement.

Furthermore, employers must ensure they terminate employees for valid reasons and preferably, get the okay from an employment lawyer. This will eliminate any possibility of a termination transforming into an unfair dismissal claim – along with all the legal costs and adverse publicity which Superior Wood have recently experienced.

Post by Warwick Ryan and Joshua Yan

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