Tuesday, April 29, 2014

Monitoring of an employee may serve as a valid basis for immediate termination by the employee (Hungary).

In a very recent judgment the Curiae of Hungary published its conclusions regarding the illegal monitoring of employees and data collecting by the employer. In the high profile case an executive of a telecom service provider filed their immediate termination against the employer and requested a large amount of “non-material” damages.

The case is considered to be one of the highest profile data protection and employment law cases and could be a precedent decision in any case regarding the illegal monitoring of employees.

Summary of the case

The plaintiff was a sales manager of a telecom company from 2002. He was entitled for using lap top and cell phones both of them was monitored and tracked by the employer via geographic information system from 2005. When he realized the fact of geographical monitoring of his devices immediately wrote an e-mail to the employer requesting that it most switch of the GIS. He did not get reply from the employer and therefore he filed his immediate termination and requested a high amount of termination payment together with so called non-material damages.

 Applicable Hungarian laws

 Hungary has changed its labour code as from 1 January 2012, the case was under the old legislation. However, both under the old and the new legislation there is a legal dispute between courts and authorities whether the employer may “secretly” monitor its employees.

 The Fundamental Law of Hungary contains the right to protection of privacy by each individuals. Moreover Hungary has a separate legislation of Privacy Protection, namely Act No. CXII of 2011 on the self determination of information and freedom of information.

 In a public opinion dated 2006, the date protection commissioner clearly stated that the GIS can be activated only in working hours and solely with the consent of the employees. Further the third data protection commissioner published a more detailed opinion regarding GIS applications and confirmed the following:

(i)                 consent is required from the employees;

(ii)               proper information shall be given on the processing;

(iii)             the device can be activated only in working time and relating to work;

(iv)             the employees must be informed about their basic rights (such as deletion and cancelation);

(v)               a test of proportionality must be applied by the employer before the installation of GIS.

Court procedures

 In the first instance procedure the employer admitted the use of GIS, but argued that it was only for testing and in 2005. The first instance court held that although the fact of using GIS by the employer may serve as a valid reason for termination. In the present case however, the employee terminated the employment relationship in 2008, which may not serve as a valid basis for an alleged infringement committed by the employer in 2005.

 The employee appealed against the decision. The Metropolitan Court of Appeal changed the judgment and found that the employer had violated the Hungarian laws when it installed a GIS without the consent of the employee. The employer violated the human dignity of the employee. The second instance court pointed out that the employee had used the mobile device in his private life, he had therefore the right for the protection of his privacy.

 The second instance court applied the reasonability test: it examined whether the employer should “reasonably” monitor the employee. It noted that the job description of the employee could be a reason for the application of GIS, however, the installation was without the consent of the employee and it was activated after the work hours. The court explicitly referred to the statement of the data protection commissioner.

 The court also took into account that the employer allowed the private use of the device and as a conclusion it found that the monitoring was unlawful. The employer as defendant turned to the Curiae.

 The Curiae came to the conclusion that the consent of the employee was required for the activation of the GIS, moreover the employer did not provide proper and direct information to the employees. On contrary, the employer committed a “secret” monitoring and omitted the fact of applying a GIS on the device used by the employee.

 The Curiae upheld the decision of the second instance court and confirmed that the collection of geographical data without the consent of the employee is a breach of data protection laws and is an illegal data processing. The termination by the employee is therefore valid.

 Learning of the case

 Although the case refers to the old Labour Code it should be considered as a milestone decision.

 Most of the other judgments require that the employee “informs” the employee about the monitoring but the consent is not required. This conclusion is supported by the current Data Protection Authority (NAIH). The NAIH published a general statement on monitoring of employees. In its general statement the data protection authority is of the following conclusion:

(i)                 the employers have the right to monitor the work of employees (accountability);

(ii)               no consent can be valid from the employees since it cannot be assumed that an employee gives “voluntary” consent to the employer;

(iii)             the monitoring based on information can be valid provided that it complies with the purpose limitation principles and does not violate the human dignity of the employees.

The NAIH refers to section 6 of the Privacy Act which provides possibility for controlling data without consent if the data controller has legitimate interest for the controlling.

 In light of the present judgment of the Curiae, the conclusions of the data protection authority shall be revised and it is very likely that the NAIH will revert back to the conclusion of the data protection authority published in 2009.

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