Privacy Law and Policy Reporter
One aspect of a decision of the Industrial Relations Commission (IRC) of New South Wales in 2001 highlights an area that both employers and employees may need to consider more carefully in the future: specifically, the overt recording of counselling and exit interviews, in either audio or video format, may become a far more common feature of counselling or exit processes. The likely admissibility of such recordings in any post termination proceedings means that those involved, prudent employers particularly, may wish to use audio or video recording ,as a standard method of proving the fairness of the termination process, and of the substantive factors relied upon ,in deciding to terminate.
Duffy v Lake Macquarie City Council  NSWIRComm 118 (25 May 2001) involved an application under ,s 106 of the Industrial Relations Act 1996 (NSW) in relation to an ‘unfair contract’. The successful applicant was the Information Technology Manager of Lake Macquarie City Council (LMCC) at the time of an organisational restructure in 1998. The applicant was treated unfairly in that her employment was terminated before the expiration of a three year fixed term of employment without the opportunity of being interviewed for an appropriate new position, being offered any re-deployment alternatives or being given any reason for the termination.
As is common in these cases, there was a factual dispute concerning the circumstances of termination and the factors taken into account when the decision to terminate was made. The Court preferred the evidence of the applicant to that of the principal witness for the respondent (the general manager of LMCC) but was able to make a finding in favour of the applicant on alternate grounds. No appeal from the decision was filed.
One of the more interesting aspects of the case is that the applicant secretly filmed her own dismissal. The video was created on 10 September 1998. It records a private conversation between the applicant and two officers of LMCC (Mr G and Mr M). On the previous evening another senior council officer (Mr F) telephoned the applicant and informed her that her employment was to be terminated forthwith. The applicant was informed that LMCC officers would visit her at home the following day to deliver a termination cheque and to recover a council vehicle and other items that were included in the applicant’s remuneration package.
No reason for termination was given by Mr F, and according to the applicant there had been no prior notice to her that her employment was at risk, despite several interviews with senior managers of LMCC, including the general manager.
In evidence, the applicant said she was concerned, because of the absence of reasons, that there might be allegations of misconduct pending, and that there might be further allegations made against her if she could not establish that she had returned all property belonging to LMCC. This was of particular concern to the applicant in view of an earlier threat made by the general manager to terminate the applicant’s access to the LMCC computer network.
The applicant secreted and activated a video tape recorder in a washing basket shortly before LMCC officers attended her home on 10 September 1998. The LMCC officers were not aware the video was being made.
The contents of the video were important in the context of the case because, on the applicant’s account, the video corroborated her claim that as late as the date when the termination cheque was delivered, she had never been provided with a reason for her termination.
LMCC, on the other hand, asserted that the applicant knew the reason for her dismissal and had actively sought ,a redundancy.
LMCC was provided with a copy ,of the video and, after examining it, objected to its admission into evidence. The Court heard argument, which centred on provisions of the Listening Devices Act 1984 (NSW) (LDA) and of the Evidence Act 1995 (NSW). LMCC contended the video amounted to a breach of ss 5, 7 and 13 of the LDA and/or that it had been improperly obtained and therefore should be excluded by virtue of s 138 of the Evidence Act.
Section 5 of the LDA prohibits the recording of private conversations (whether or not the recorder is a party) unless certain conditions apply. These include, relevantly, that all of the parties (or alternatively a ‘principal party’) consent to the recording and:
... the recording of the conversation is reasonably necessary for the protection of the lawful interests of that principal party or that the recording of the conversation is not made for the purpose of communicating or publishing the conversation, or ,a report of the conversation, to persons who are not parties to the conversation ,[s 5(3)(b)(i)and(ii)].
In Duffy the applicant clearly fell within the definition of ‘principal party’, being a person by or to whom words were spoken in the course of ,the relevant conversation. There was implied consent to the recording arising from the mere fact that the applicant herself set up the videotape for the purpose of the recording. The critical matter was whether there was a lawful interest to protect.
It was the applicant’s primary contention that there was a lawful interest, namely her interest in protecting herself against possible allegations of misconduct.
Two cases were cited by the applicant as to the meaning of the phrase ‘lawful interests’. In Estate of Nicola Alvaro, deceased, Public Trustee v Alvaro (1995) 182 LSJS 383, a tape recording was made of a conversation between a son of the deceased and the deceased, without the knowledge of the deceased. The evidence in the case disclosed that the son was concerned to confront his father with allegations that he had made about the alleged sexual misconduct of his mother with ,one of his brothers-in-law.
The Court concluded, in the circumstances of the case, that the recording was for the protection of the son’s lawful interests — being an attempt to restore ‘family peace and harmony’ by clearing up misconceptions or unjustified allegations against his mother.
In an interlocutory judgment in Scanruby Pty Ltd v Caltex Petroleum Pty Ltd  NSWIRComm 89 ,(7 June 2000), the Court commented that the observations of the Court in Alvaro illustrated the ‘potential breadth of the phrase “lawful interest” in the exclusion from the prohibition on relevant use of a listening device’. Without dealing with the facts of Scanruby, it was held that the lawful interest in that case was protection against an unfair termination of lawful interests in property.
Alternatively, the applicant contended she fell within the exemption in ,s 5(3)(b)(ii) (because the recording ,was not made for the purpose of communicating or publishing to non-parties).
The evidence relating to this was that, at the time the video was made, the applicant had no intention of using the video at all unless it became necessary to protect her interests. As it transpired, the only persons who ultimately saw the video were employees of LMCC, its legal team, the Court, and any witnesses in court on the day it was shown. The LMCC did not object to the presence of witnesses in court when the video was shown.
In Duffy, the Court determined that the video was made to protect the lawful interests of the applicant, and should not be excluded under s 5 of ,the LDA.
While the arguments under ss 7 ,and 13 of the LDA were not pressed strongly by LMCC, they are dealt ,with here for completeness.
It was argued by LMCC that the video was also in breach of s 7, either because, independently of s 5, it prohibited the publication of a private conversation generally, or alternatively because the applicant had shown the video to her husband.
The effect of s 7 of the LDA is that ,if a private conversation is recorded, ,the recorder may not communicate ,the recording except in specified circumstances. These include disclosure in the course of legal proceedings, disclosure which is ‘not more than is reasonably necessary’ to protect the lawful interests of the person making disclosure, and disclosure to a person reasonably believed to have an interest in the recording such that disclosure ,to him or her was reasonable in the circumstances.
The applicant’s contention was that the exemption relating to disclosure in the course of legal proceedings was generally applicable; and in addition that any disclosure to the applicant’s husband was separately protected by the third exemption referred to above. The applicant’s husband was a person whom she reasonably believed had an interest in the private conversation (since the termination to which the conversation related impacted on both the applicant and her spouse).
Section 13 of the LDA effectively provides that if a private conversation was recorded in breach of s 5 then neither evidence of the conversation, ,or evidence obtained as a consequence of the conversation, could be admitted into evidence.
LMCC submitted that if the applicant was found to have breached s 5 of the LDA, then s 13 was a further basis upon which the video evidence should be excluded. Given the finding on the s 5 argument, this submission was not pressed.
LMCC adopted a similar stance in relation to s 138 of the Evidence Act which provides that evidence obtained ‘improperly or in contravention of Australian law’ should not be admitted into evidence unless the desirability of admission outweighs the undesirability. The section further sets out the factors ,a court should consider in weighing the competing considerations.
It was the applicant’s contention, in view of the submissions concerning the LDA, that the evidence had not been improperly obtained within the meaning of s 138 of the Evidence Act but that if that view was wrong, the Court should exercise its undoubted discretion because of the clear probative value of the video’s content, and the fact that various of the LMCC witnesses had been cross-examined about the events that took place at the applicant’s house but had no recollection of them.
Ultimately, the video and the images it contained were not critical to the Court’s substantive decision, and indeed there is no reference to the video in the final judgment. The Court held against LMCC on the basis either that it took account ,of trivia in deciding to terminate the applicant’s employment, or alternatively that it failed to take into account the applicant’s emotional reaction to an ‘obviously ... unexpected and potentially traumatic experience in the context of her career and family circumstances’. The video was simply one piece of evidence that assisted the Court to assess the merits of the competing cases, and ,the credit of specific witnesses.
However, the decision to admit ,the video into evidence indicates a recognition by the IRC that the protection of one’s interest in relation to an unfair termination of employment is a ‘lawful interest’, such that videos or other forms of information recording may well be capable of admission into evidence in the future. This may be so even though the information was, prima facie, secretly recorded.
This case focused on the lawful interest of an applicant. However, ,there is no reason to suppose that an employer is any different in having a lawful interest in protecting themselves from an unjustified allegation that employment was unfairly terminated.
It may well be that in appropriate matters — for instance, where either an employee or employer anticipates that ,a termination may be contentious — video or audio recording of ‘counselling’ sessions or of the termination interview, could be made and ultimately used in evidence in any litigation arising from the termination.
In the same way that arguments concerning ‘police verbals’ have largely disappeared from criminal cases since the recording of interviews was made mandatory, disputes concerning termination interviews can also be minimised by recordings. Common disputes such as whether the employer had already made the decision to terminate prior to interview; whether the employee was given a proper opportunity to respond to allegations; whether undue pressure was exerted such that a ‘resignation’ was not voluntary; the actual matters that were taken into account when deciding to terminate — all these can potentially ,be avoided, or at least significantly reduced, by use of recordings.
In the writer’s experience, the majority of employers baulk at conducting ‘counselling’ sessions if an employee wishes record them (although, perhaps surprisingly, few employers object to a witness or ‘support person’ being present). In view of the decision in Duffy, it may well be that employers, ,in particular, should reconsider that attitude. If the process of termination ,is otherwise correctly handled, the recording may in fact be an added protection to the employer, rather ,than a potential threat. l
Tony Cavanagh is a partner at Mullane and Lindsay Solicitors in Newcastle and Conjoint Lecturer in Employment Law at Newcastle University Law School. ,He was the solicitor for the applicant in Duffy v LMCC. Ms Kylie Nomchong of counsel appeared for the applicant and her assistance in the preparation of the article is gratefully acknowledged.
This article was previously published ,in the Law Society Journal (NSW, Australia), March 2002, page 70. It ,is reprinted by kind permission of the LSJ and the author.