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Big Brother in the Square Mile raises legal issues

THERE is nothing so British as fear of Big Brother. And perhaps, not without reason &ndash; the UK has 20 per cent of the world&rsquo;s CCTV cameras. But the latest fear is being spied on at work. City firms have begun to import state-of-the-art tactics to keep a close eye on employees, and it is sounding alarm bells.<br /><br />At the heart of the issue is the increasing use of two techniques by employers that are gaining increasing prominence across the City, specifically within the financial services and pharmaceutical sectors.<br /><br />The first is &ldquo;PC imaging&rdquo;, which is used when an employee resigns or is made redundant. Imaging takes a snapshot picture of the departing employee&rsquo;s hard drive, preserving the machine in exactly the state the employee left it &ndash; including, crucially, anything that has been deleted. Employers do this for two reasons. First, to resolve issues where a supplier or contractor says that the employee had signed deals in specific terms that the company may wish to challenge. But more often, to assess employee activities prior to their departure, focusing especially on clues pointing to theft of corporate information, intellectual property and data bases.<br /><br />Martin Baldock, general manager of the London office of US-based forensic investigation company Stroz Friedberg, says: &ldquo;There are a lot of pointers evident in the hidden workings of the PC, which is what we capture and preserve. Employees are getting more knowledgeable and wary &ndash; they are clearing out their internet cache and emptying their recycle bins. But that is not enough to stop someone finding out what has been going on. A common thing is pointers to USB devices, memory sticks being connected and company data bases being copied on to those devices.&rdquo;<br /><br />Perhaps more controversial is a second investigative tool finding favour at large corporates. Psycho linguistics is based on FBI techniques (Stroz Friedberg founder Ed Stroz is a former New York City agent) and it scans the language and phraseology in emails to paint a psychological picture of the writer. The process looks at whether emails contain any subtle change in the way the correspondents are conversing, as well as for various combinations of words and phrases that could illustrate a state of stress or hostility.<br /><br />&ldquo;It is leading-edge technology and while it is not being routinely deployed in every institution in London we have used it,&rdquo; says Baldock. He highlights a case where a key technician who was coming to the end of a contract. A psycho linguistic analysis of e-mails between the contractor and the line manager showed that relations were deteriorating badly. &ldquo;It can be a huge risk to have an IT contractor in place who is disgruntled and knows he&rsquo;s leaving,&rdquo; says Baldock.<br /><br />But is the growing band of City companies using this technology running risks &ndash; not least of falling foul of data protection legislation as well as nascent privacy laws in the Human Rights Act? Possibly, says Amber Melville-Brown, a privacy specialist counsel in the reputation management department of City law firm Withers. She says that this is a controversial and complex area of law. At its core is the Regulation of Investigatory Powers Act 2000, implementing the EU Telecommunications Data Protection Directive, which made it unlawful to intercept, without consent, communications on a telecommunications network. However, lobbying by business interests resulted in the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000, which watered down the original legislation to allow monitoring for certain purposes &ndash; eg to ensure that standards of service are maintained. Crucially, however, employees must be notified of any monitoring policy.<br /><br /><strong>BALANCING RIGHTS</strong><br />&ldquo;The European Convention right to respect for our private and family life does not operate in a vacuum,&rdquo; says Melville-Brown. &ldquo;It is a right that has to be balanced against other rights and interests. Interference with that right is permitted where necessary in a democratic society. Any expectation of privacy that the employee might otherwise have may be curtailed where justifiable email monitoring takes place, by notification of a reasonable firm policy incorporated into his contract of employment.&rdquo;<br /><br />Well-drafted employment contracts are crucial, agree specialist lawyers. &ldquo;The relationship of employee and employer is regarded as one based on mutual trust and confidence,&rdquo; explains Kathy Pavey, founding partner of Synergy Employment Law, which represents both employers and employees. &ldquo;It is a fundamental breach of contract for an employer without reasonable and proper cause to conduct himself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the parties.<br /><br />&ldquo;However, if the employer is transparent about what monitoring is taking place and it is undertaken in a balanced manner and the employee is not doing anything untoward then they should not have too much to complain about. At the end of the day, computers at work are a business tool.&rdquo;<br /><br />So are employers free to launch electronic snooping campaigns on their workforce? &ldquo;I&rsquo;d hesitate to give blanket advice that employers shouldn&rsquo;t adopt these methods,&rdquo; says Philip Bartlett, an employment department partner at City law firm Simmons &amp; Simmons. &ldquo;There is a slight trust issue, but I don&rsquo;t think it would be that serious. There is quite a lot of employment practice guidance from the Information Commissioner on what employers should and shouldn&rsquo;t do in terms of monitoring at work.&rdquo;<br /><br />Indeed, says Bartlett, in the case of imaging and psycho linguistics, the Information Commissioner will have an eye on the potentially indiscriminate nature of the techniques. &ldquo;But if there is a specific reason or suspicion &ndash; namely, you think that your customers or clients are being poached by competitors or your confidential information is walking out the door &ndash; then fine, I don&rsquo;t think the Information Commissioner is going to tell you that you can&rsquo;t do some sort of imaging or monitoring and investigation.&rdquo;<br /><br />Employers are pushing the boundaries, but they are unlikely to have things their own way. As Melville-Brown says: &ldquo;Big Brother may be watching, but we are watching Big Brother watching us.&rdquo;