Secret workplace recordings – legally in or out?

Secret workplace recordings can sometimes be used as evidence in employment cases – and sometimes not – depending on the specific context, as highlighted by a recent case.

To ensure an accurate record of the meeting is kept, we would usually expect that in most important meetings with employees (such as disciplinary meetings) the audio of the meeting is recorded by agreement. Interesting legal issues arise, however, where recordings are made covertly.

In Downer v. LM Architectural Builders Ltd, [2024] NZERA 204, the Employment Relations Authority considered the admissibility of two covert recordings made in two different contexts by an employee.

The case highlights the importance of seeking legal advice about whether conversations can be made without prejudice.

Without prejudice conversation

The first recording was of a conversation between employee Ms Downer and Mr Meredith, Managing director of LM Architectural Builders Ltd (LMA). LMA sought to have the recordings excluded as evidence on the basis that the first recording was a without prejudice discussion.

Where a communication is classified as without prejudice, the communication cannot be relied upon later in court as evidence.

The Authority found that the first recording was not actually on a without prejudice basis and therefore was admissible as evidence in the investigation of Downer’s employment relationship problem.

According to the New Zealand Court of Appeal in Kenneth Morgan v. Whanganui College Board of Trustees, [2014] NZCA 340, for written or verbal communication to have the protection of being classified as “without prejudice,” three criteria must be established:

• There must be a dispute between the parties. In the employment context, there will be a dispute if there is an employment relationship problem that may give rise to litigation.
• The communication was intended to be private.
• The communication must include an offer attempting to settle the dispute.

The Authority found that the conversation fell down at the first hurdle because no dispute had been raised by either party.

The conversation that LMA sought to characterise as without prejudice followed on from a discussion between Meredith and Downer in which an allegation was made that Downer was updating her CV during work time. It was suggested by Meredith that this would constitute serious misconduct, and Downer was offered two weeks’ pay should she wish to leave immediately.

The Authority held that this was not sufficient to constitute a dispute.

Covert recording

The second recording was of Meredith speaking on the telephone to a third party, with LMA arguing this was obtained illegally and improperly.

Where an individual covertly records a conversation they were not party to, this can amount to a crime under s. 216B of the Crimes Act 1961 and upon conviction result in a term of imprisonment of up to two years.

Given Meredith did not consent to the recording and Downer was not a party to the conversation, the Authority held that the recording was improperly obtained.

The Authority’s role as an investigative body means the Authority Member may take into account evidence which is not strictly legal or is improperly obtained. Accordingly, the fact that the evidence was obtained improperly is not the end of the story.

In determining the admissibility of evidence, Member van Keulen suggested the Authority is required to balance the investigatory obligation of the Authority against ensuring the rules of natural justice are met, that good faith behaviour is promoted and that the principles of equity and good conscience are met.

In this matter, the balance fell in favour of not admitting the evidence, in part due to the significant prejudicial impact admitting the recording would have. Member van Keulen also specifically highlighted that “allowing improperly obtained recordings to be admitted as evidence does not promote good faith behaviour in the workplace.”

What can employers learn from this?

If you are considering having an off-the-record conversation with an employee, particularly if that discussion involves conversations about that employee’s exit, it is best to seek advice about whether such a conversation can be without prejudice, and how best to go about such a conversation.

Secondly, this case demonstrates that covert recordings improperly obtained can be admitted as evidence in the Authority, but only in limited circumstances. If you have concerns that an employee is undertaking covert recordings in the workplace, it is imperative that a full and proper disciplinary process is undertaken.

Tamsin Woolf is a Senior Solicitor in the Employment Law Team at Lane Neave in Wellington. Maria Green is a Special Counsel specialising in employment law at Lane Neave in Christchurch.