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Freshfields Risk & Compliance

| 5 minutes read

WorkLife 2.0 – 'my algorithm boss is watching me': will employee-surveillance software be the trade off for more home working?

The COVID-19 pandemic has seen employers across sectors and jurisdictions adopting drastic and prolonged working-from-home arrangements. 

While the jury is still out on what the 'new normal' will look like when we all finally emerge from COVID-19 pandemic lockdown measures, it seems that the abrupt and sweeping change to working styles implemented in the face of the pandemic has accelerated a trend that we had seen emerging in recent years: an increasing focus on the output of employees and less of a focus on where they produced the output. (See our previous blog post on the topic.)

However, one issue employers grapple with in relation to remote working is the lack of supervision: how do you ensure employees are focused and productivity levels are high if they are not in the office? 

Perhaps the answer is sophisticated surveillance software. 

With many different products on the market (eg Hubstaff, WorkSmart and Sapience), employers now have the means to gather granular information on their employees (eg key strokes, mouse movements, screen shots, GPS tracking, documents worked on and websites visited).  

But can employers lawfully use such software to monitor employees? And will such surveillance have a positive impact on the business? 

Why might an employer turn to a digital line manager? 

It seems that one of the key attractions of employee surveillance software for employers is maintaining productivity, especially when an employee is working remotely and is therefore less visible to the wider team and their managers. 

Surveillance software allows employers to check what an employee is doing (or not doing) at any given time, with some programs compiling granular productivity reports. 

Where an employer is confident that such productivity statistics are accurate (see below) and use of the software is legal in the respective jurisdiction, employers could reflect these in bonus plans as new, specific KPIs. 

The data collected from the workforce could also help an employer make strategic changes to ensure better productivity, eg by scheduling calls and meetings during periods where employees are the most productive. 

However, productivity may not be the sole motivator. Indeed, in the financial services sector, an employer may have a regulatory duty to monitor employee communications. Employers may also be concerned that remote working will allow inappropriate behaviour to go unseen and unchecked. 

Employee monitoring software that would potentially scan for key words in correspondence may, where used appropriately, be a powerful tool for employers to ensure that misconduct is identified promptly, even when employees are working remotely. 

Data protection: can such software be lawfully used? 

Whether an employer can use employee surveillance software will be a jurisdiction-specific question and depend on what data is collected and how it is used. 

However, in Hong Kong, it may be possible to use software that collects personal data where employees have been provided with a personal information collection statement at the time the software is first introduced, informing employees of what data is being collected, for what purposes and the classes of persons any personal data will be transferred etc. 

Where software tracks what websites an employee visits, their communications and/or physical location, employees may be particularly concerned about the security of this date and the access third parties or government agencies could have to this data. 

Whether an employer can require employees to install and activate surveillance software will largely depend on the terms of an employer’s internal policies and employee handbooks, and the position will likely be more difficult where employees are using personal rather than employer-issued devices. 

In Europe, employers will be generally held to a higher standard under the provisions of the EU general data protection regulation. Employers will need a legitimate legal basis for processing of any personal data collected via surveillance software, while ensuring the collection of data is only for and proportionate to the underlying purpose. 

Further, in Germany and other countries with strong works council rights, the implementation of such software will require consultation with, or even the consent of, works councils.

Will the benefits outweigh the potential issues of employing 'Big Brother'? 

Understandably many employers, especially in the current economic climate, will be fixated on the bottom line and employee productivity. 

But employers should holistically consider the impact of such surveillance techniques before implementing the software. 

Does the software even work? 

While the software may map activity (eg time spent online, time spent in documents or certain websites, etc), does that accurately correlate to valuable productivity? And are such 'productivity' statistics conducive for efficiency? 

For example, an employee who is logged in for 10 hours is not necessarily more productive than another employee who is only logged in for seven hours. 

Whether the software works will depend in part on how the data is extracted and interpreted.

Won't employees just cheat? 

As the New York Times explored in their recent article, when employees know they are being monitored remotely, they may alter their working habits to manipulate the productivity statistics, eg logging on earlier, leaving documents open on-screen when away, etc. 

It is perhaps only natural that employees will react in this way, but these potentially artificial changes may distort the data collected by the software and therefore nullify its value.

Won't monitoring destroy trust? 

Introducing draconian monitoring measures is in stark contrast to the approach taken by Richard Semler in respect of the Brazilian industrial conglomerate SEMCO, where a greater emphasis on trust allowed employees to hire their own managers and set their own hours (as discussed in this recent blog post). 

Surveillance may lead to the erosion of trust among employees, denting employee motivation and morale, and ultimately damaging the business’ financial performance and potential.

Will employees accept the change? 

Employee activism is on the rise, particularly in the tech sector and among the younger workforce (as discussed in this recent blog post).

While millennials may take such a change in their stride (having grown up with technology and possibly being more desensitised to the use of software in this way), there is a potential risk that the younger generation of workers, who are generally more likely to voice their views, will take a stand to protest against the use of intrusive software. 

This could damage an employer's reputation and therefore its ability to recruit and retain talent. To mitigate these risks, an employer may want to introduce the software only after consultation with the workforce, even where such consultation is not strictly required.  

Tips for a successful implementation 

The legal analysis and success of employee surveillance software will largely depend on what information is collected and how it is used. 

However, where an employer, after careful consideration, decides that proceeding with monitoring technology is appropriate and lawful, it will need to carefully handle the implementation process and employee communications: this will be critical to how employees respond to the change. 

Stepping back from the technology itself, it will also be important for employers to ensure all other related policies and procedures are up to date, eg policies on data privacy policies, working from home, disciplinary matters etc. 

While the digital line manager will compile a report of the statistical data, it will still ultimately come down to a human manager to decide how information is used and interpreted, including in a disciplinary context. 

Therefore, careful consideration will also be needed from the outset about how the data will be used and the appropriate sanctions that may be imposed for certain behaviours or violations. 

Looking to the future 

While the widespread use of sophisticated employer surveillance to monitor an employee’s every move feels for now like an Orwellian prediction for the future, the use of such technology may just be the next step in the digitisation of the workforce and the 21st century’s answer to the punch card and CCTV. 

The increased use of technology to keep tabs on employees may also become the accepted safeguard that employers adopt to address some of their concerns with more frequent and sustained remote working, ironically leading to potentially less flexibility for employees and giving employers greater oversight and control.


global, employment, covid-19