Insights

In this age of smartphones, practically everyone has a recording device in their pocket. As an employer, have you ever wondered where you stand with regard to a recording made by an employee without your knowledge? Would such a recording be admissible in a dispute with that employee?

With the ease of recording afforded by cellphones, the issue of admissibility of such recordings in the Employment Authority and Court comes up often. Usually, the party who made the recording seeks to rely on it as evidence before the Authority and the other party, who was unaware the recording was being made, objects.

The Court of Appeal has held that it is neither unlawful nor necessarily unfair to record a conversation without the knowledge of the other party to that conversation. (Harder v Proceedings Commissioner [2000] 3 NZLR 80).

Notwithstanding the Harder case, in general, it will be difficult for an employer to justify a covert recording of an employee except in very exceptional circumstances. However, for employees making recordings, it is a different story.

Legislation

The Employment Relations Authority has very broad powers under the Act. It can take into account "such evidence and information as in equity and good conscience it thinks fit, whether strictly legal evidence or not".

In reliance on this "equity and good conscience" phrase, in deciding whether a recording is admissible into evidence, the Authority and the Court look to see how fair or unfair the circumstances of the recording are.

Court Decisions

Talbot v Air New Zealand Limited [1996] 1 NZLR 414

The HR Manager for Air New Zealand, Mr Turner, had a phone conversation with an employee, Captain Talbot who was also a director of the Airline Pilots' Association. With all parties' knowledge, two other people were listening in on a speakerphone. There was no discussion about recording the conversation; however, Captain Talbot did indeed record the conversation.

Just to show how difficult these cases are, the Employment Court said the recording was inadmissible, but the Court of Appeal held it was admissible. The three Court of Appeal judges were unanimous that recording a call in these circumstances, despite the lack of disclosure of the recording, was not a breach of goodwill or trust and confidence.​​​

1. The Court saw three matters as supporting its conclusion being:
   1. There was no suggestion that the telephone conversation was of a private nature, intended to be confidential or "off the record". The parties were free to make comprehensive written notes of the conversation if they wished.
       
   2. Mr Taylor knew that in addition to Captain Talbot, two other people had been invited to and were listening in on the conversation.
       
   3. Mr Taylor himself had not been called to give evidence and so there was no indication that he had complained of the recording or regarded it as unfair or inaccurate.
2. All three Judges held that, in these circumstances, there was no basis on which the Employment Court could properly have found that the recording of the discussion was unfair.
    
3. The Court did say that there may well be cases where covert audio recording is a breach of the obligations to deal in good faith but as the Court said "the subject does not lend itself to generalisations".
    
4. This quote from the judgment will give you its flavour:

"Where the conversation was being played with Mr Taylor's concurrence by speaker to others present in Captain Talbot's office, and where it was proper for notes of the conversation to be taken by way of record and for later use, and there was no challenge by Mr Taylor to the propriety of the taping of the conversation, I cannot see any basis in the evidence for a finding of unfairness. Whether a record is in the form of notes or a verbatim electronic recording may affect its comprehensiveness and accuracy but in these particular circumstances a purportedly verbatim record is not so different from agreed note taking as to warrant the conclusion that it was unfairly obtained".

5. While Talbot is the authoritative decision, other cases have gone further. A key basis for the Talbot decision was that the conversation there was not what might be called a “private” one, it was not intended to be confidential or off the record and nor was it between two people in circumstances where one or both intended it to be kept between them. In the Employment Authority, such a private conversation has been held to be admissible.

1. Both parties and the Authority agreed that the question of fairness was central to whether or not the recordings were admissible.
    
2. The circumstances of the recordings were as follows.
   1. Mr Simms was the head chef of the Santos Restaurant, he had an accident and was required to take time off work. He said that the long hours of work contributed to his accident.
       
   2. His evidence was that shortly after the accident, Mr Escalante told him he would like him to resign.
       
   3. Shortly after that discussion, there was a telephone conversation between Mr Simms and Mr Escalante during which, according to Mr Simms, Mr Escalante said something like "I can't legally fire you but if you come back things will be difficult for you". Mr Simms recorded that conversation without telling Mr Escalante he was doing so.
       
   4. Several weeks later on receiving a medical clearance to return to work, Mr Escalante invited Mr Simms to a meeting. At this meeting, according to Mr Simms, Mr Escalante said: "If you were an honourable man you would resign and if you do return I will make things very difficult for you." No one else was present at the meeting, which Mr Simms recorded without Mr Escalante’s knowledge.
3. Mr Escalante disputed that he said those things. Accordingly Mr Simms wanted to introduce the audio recording in support of his version.
    
4. The Authority reviewed the law on the issue as set out in the Talbot case.
    
5. In terms of the Privacy Act, the Authority concluded from Talbot and from the Harder case that the recording of a private conversation without the knowledge of the other party does not breach the Privacy Act.
    
6. There was no evidence before the Authority that either party had suggested the conversation would be off the record, “without prejudice” or in confidence. The Authority did note that it was highly unlikely that Mr Escalante expected the conversations to be recorded.
    
7. In the decision, the Authority said that on the one hand Mr Simms' subterfuge in making the recordings could not be regarded as being fair to Mr Escalante. But, on the other hand, to deny Mr Simms the opportunity of supporting his evidence of the conversations with the recordings he had made at the time would be unfair to him.
    
8. The Authority noted that if Mr Simms had during or immediately after the conversations made extensive notes, there would be no question that those notes would be admissible. So the only unfairness was the failure to tell Mr Escalante that he was making the recordings.
    
9. In considering the Authority's ability to take into account such evidence and information it thinks fit whether strictly legal or not, after carefully weighing up both sides, and taking into account Talbot, the Authority came to the conclusion that in this case fairness was best served by allowing the tapes to be admitted as evidence.
    
10. The Employment Authority last year looked at the admissibility of audio recordings of various conversations in relation to an employer investigation in Firman v Insyn Limited [2016] NZ ERA Christchurch 156. The first transcript was of a conversation between the employee and the company's general manager. The manager was not aware that the conversation was being recorded. During the conversation, the employee was given a letter with regard to a disciplinary process, there was a discussion and she was suspended.
     
11. The Authority held that what happened at the meeting was very relevant and although the recording was without the permission of the general manager, it was ruled as admissible.
     
12. The second recording was at different times, with the employee placing her cellphone near other staff members while they were having conversations and she was not present. She wished to use the recordings as evidence that she had been bullied.
     
13. While the Authority said that secretly recording a conversation in which the person recording it was not a participant was generally not advisable and was a breach of good faith, in this case a transcript of those recordings was held to be admissible as to evidence of how the applicant had been treated in a workplace.
     
14. The third recording was one the applicant said she made accidentally between the general manager and another staff member. This recording was ruled to be inadmissible. It was not intentional and the conversation was a private one and therefore fell outside the Talbot rules.

So, what can we learn from the case law?

1. It appears extremely likely that covert recordings made by employees will be admissible if the content is relevant to the issue in dispute.
    
2. The clear lesson for employers is to treat any meeting with an employee as if it is being recorded. While that may have the unfortunate effect of constraining open discussions, a risk averse employer might certainly take that position.
    
3. An alternative might be for the employer to state that he/she does not consent to recording of the interview and ask the employee to confirm he/she is not doing so. While that won’t necessarily mean any recording will be inadmissible it will make for a higher hurdle for the employee to overcome in terms of whether the recording was fair.