Fight for privacy

David Burton, an Employment Law Barrister, looks at a recent case involving the use of biometric recognition technology for timekeeping and attendance records.

As technology continues to evolve to help us with our businesses, HR professionals also have to consider the impact of technology and how this may affect the workplace. This may include being involved in restructuring the workplace if work is to be done differently or more efficiently with new technology. It may also involve the implementation of new technology to assist HR systems and monitoring in the workplace.

Technology Used

Fingerprints are a unique biological characteristic of a person; they have long been recognised as an effective and accurate way of identifying someone. The recent decision of the Employment Relations Authority in Fonterra v Lanigan involved the introduction of fingerprint scanning technology (FST) for timekeeping and attendance. By using biometric technology, Fonterra wanted to reduce the administration time needed to support the collection of timekeeping and attendance data required by law to be kept, eliminate or reduce the opportunity to falsify or misuse information about timekeeping and attendance, and improve accuracy and consistency generally in computing employees’ pay, leave and other statutory and contractual entitlements.

The protection of encryption offered by Fonterra’s FST system is high. It instantaneously converts raw data (the fingerprints) to a numerical code. Once encrypted, the data cannot be decrypted. The fingerprints are not copied or stored but are converted to a binary code from which a person’s fingerprint cannot be recreated.

Mr Lanigan and about 30 other employees in the Maintenance Team at Fonterra’s Takanini plant were the last employees to resist the introduction of FST in Fonterra’s large workforce of around 8,000 employees. Mr Lanigan did not consent to offering his fingerprints to enable his registration for using the FST technology. He considered that, by doing so, his privacy would be intruded upon and that Fonterra could not legally require him to do so by way of a direction or instruction.

Considerations

The Authority noted there is a term implied in law in every employment agreement, requiring an employee to comply with a lawful and reasonable direction of their employer. The term is necessary to give practical effect to the right of an employer to exercise control over an employee. The direction must not be inconsistent with any express term of the employment agreement and must also be reasonable and lawful.

The Authority also considered the Privacy Act 1993 and the earlier Employment Court decision of OCS Ltd v SFWU and accepted that finger scanning technology had been approved in other jurisdictions, such as Australia, the United Kingdom and Canada, and that some principles could be extracted.

• Is the technology compatible with the contractual obligations of the parties?

• There is to be a balance between the need for the technology and the level of personal intrusiveness involved for the individual concerned.

• The employer has the right to introduce different systems of timekeeping technology subject only to reasonable consideration of valid concerns raised by the union and employees.

• The employer must take appropriate steps to inform employees of the new measures and to obtain their consent.

The Court in OCS Ltd noted that, in our jurisdiction, there is a general requirement to consult under the good faith obligations before implementing changes in workplace practices.

AUTHORITY’S DECISION

In analysing the introduction of FST at Fonterra, the Authority concluded that Fonterra had a lawful purpose connected to its role as an employer in wanting to collect biometric information from Mr Lanigan and the other workers.

In respect of the ability of Fonterra to give a lawful and reasonable instruction about the use of FST by Mr Lanigan, the Authority said that this is limited or qualified by the requirements for consultation and good faith behaviour.

The Authority found that Fonterra did have a discretion when selecting its systems and may exercise its business judgement as to what will best meet its needs. It said that this discretion appears to have been properly applied within the boundaries of the Privacy Act 1993. The Authority also found that Fonterra did genuinely endeavour to balance the interests of Mr Lanigan in preserving his privacy against the benefits of using FST. It said that the level of intrusiveness into the privacy of Fonterra’s employees was at the lower end. The relatively slight intrusion on the privacy of Mr Lanigan and others was weighed up fairly alongside Fonterra’s business needs.

Accordingly, the Authority declared that Fonterra could lawfully and reasonably instruct Mr Lanigan to use the FST system for the purposes of recording time and attendance at work.

Should Mr Lanigan fail to follow such a lawful and reasonable instruction, it will be open to Fonterra to commence a disciplinary process with Mr Lanigan that may result in his dismissal should he continue to refuse to use the FST system.

Fonterra Brands (New Zealand) Limited v Lanigan [2023] NZERA 197

David Burton is an Employment Law Barrister. David has over 30 years of employment law experience in Aotearoa New Zealand and overseas. His expertise is recognised by his peers. For six years, he was appointed to the Employment Law Committee of the New Zealand Law Society. Before that, he served on the Workplace Relations and Employment Law Sub-committee of the Law Institute of Victoria, Australia. For more information, visit www.burtonlaw.co.nz.