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Understanding when privacy laws apply to your business’ handling of employee information will make you better placed to avoid any complaints. Businesses often face complaints about unlawfully collecting or mishandling sensitive information. Therefore, if you are collecting sensitive information from your employees, you must be aware of how Australian privacy laws function. This article explains how you should handle sensitive information about your employees.

What is Sensitive Information?

Under the Privacy Act, sensitive information comes under the broader banner of personal information. Here, personal information is any information which you can use to identify someone. It includes a person’s:

  • name;
  • email; 
  • telephone number; and 
  • address. 

In contrast, sensitive information is personal information which is more likely to pose a risk to someone if it is shared. 

For example, sensitive information is more serious because it could be used to discriminate against someone. 

Sensitive information includes a person’s: 

  • religion;
  • ethnicity; or 
  • sexual orientation.

How Does the Employee Exemption Work?

The Privacy Act excludes employee personal information that is directly related to their employment. However, this exemption is only applicable to private sector businesses.

For example, this means that if you collect an employee’s bank details because you need these to be able to process their salary, you do not need to comply with the Privacy Act when doing so.

However, if you collect personal information from your employee for a purpose not directly related to their employment, then the Privacy Act will apply.

Further, it is important to note that where the Privacy Act does not apply, workplace laws may dictate how records must be kept and made available for access.

Therefore, if you wish to collect sensitive information about your employees, you should consider whether this is a requirement of their employment with you. If not, you should look at how the Privacy Act will impact on the collection of this information.

Case Example: Fingerprints

A recent case provides an example of where the collection of sensitive information falls outside of the employee exemption.

In this case, the employer made employees use a fingerprint scanner to record the time they entered and left the office. This was a collection of sensitive information as the Privacy Act considers a fingerprint to be biometric data. This means it is information about a person’s features and requires a higher level of protection.

The employee refused to provide his fingerprint to his employer. His employer then fired him for not following a reasonable direction. Accordingly, the employee brought a case for unfair dismissal against his employer.

The Fair Work Commission found that the fingerprint collection was not allowed, for two reasons:

  1. personal information can only be collected if it is reasonably necessary. In this case, the type of business did not justify high-security processes. Instead, a swipe card could be sufficient; and
  2. as fingerprints are sensitive information, the employee had to consent to its collection. Here, the employee was not able to give true consent as he did not have the option to say no.

This case demonstrates that you need to carefully consider whether the employee exemption covers the information you collect. If not, you will need to consider then whether the Privacy Act allows the collection. 

What Should I Do Based on the Finger Print Case?

In this case, the employee exemption would have applied if:

  • the requirement to use a fingerprint scanner had been in the employee’s contract; or
  • if his employment contract stated that he would automatically accept all future workplace policies as a condition of his employment.

This means that you should ensure your employment contracts are drafted to close off privacy loopholes. They should also state that, as a requirement of their employment, your employee must consent to:

  • any future policies and 
  • the collection of sensitive information.

Key Takeaways

It is important to understand how the Privacy Act applies to collecting sensitive information about your employees. Make sure that exemptions in your employment contracts include the personal information that you collect from employees. If you have any questions about employee privacy and collecting sensitive information, contact LegalVision’s privacy lawyers on 1300 544 755 or fill out the form on this page.


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