The Zellstoff Trilogy- Privacy v. Technology

December 2017

Article by: Gavin Marshall

In the age of technology and data collection, there is, or can be, a digital footprint and record of virtually all employee activity.

How will arbitrators balance the right of employers to manage the workplace using the new tools they have in place, and the asserted privacy rights of employees? The Zellstoff trilogy of cases provides a useful “data point”. These cases illustrate the developing battle-line between the use of management technology and personal privacy.

The cases were decided under B.C. and Alberta law, which is relevant because both provinces have almost identical private sector privacy laws that purport to protect “employee personal information.” In the first case, Zelstoff Celgar Ltd. v. Public and Private Workers of Canada, Local 1 (Negreiff Grievance), the union grieved the dismissal of an employee for time theft.  The employer had compared the grievor’s self-reported hours of work against the data collected by a newly-installed swipe-card system. The system was inaccurately described to employees as having been implemented to protect “safety and security”.  Employees were not told that it would be used as a time-policing tool.

Arbitrator Blasina determined that the data collected from the swipe-card system was inadmissible at arbitration. The data was “personal employee information” and the employer collected it without providing notice of the purpose of the collection in violation of the relevant privacy legislation (PIPA).  Arbitrator Blasina declined to exercise his discretion under the B.C. Labour Relations Code, R.S.B.C. 1996, c. 244, to admit this evidence.

In the course of the hearing, the employer sought to admit not just further swipe-card data, but also admissions against interest made by the employee when the employer questioned him about the discrepancies it had discovered in the system. In Negreiff No.2, the employer argued that relevance is the determining standard of admissibility and there should be no automatic exclusion of evidence based on privacy breaches. Failing that, the employer argued that the right to investigate time theft (a serious offence) outweighed the grievor’s right to privacy, where the privacy intrusion was minimal.

Arbitrator Blasina disagreed and once again held that the data collected by the swipe-card system was inadmissible. But, the employee’s verbal admissions, made when confronted with discrepancies based on the data, were admissible. There was no automatic exclusion based on the origin of the facts that supported the questions. Rather, Arbitrator Blasina held that:

64     A breach of statutory law may be a cogent reason to not admit evidence emanating from the breach, but arbitrators in British Columbia nevertheless retain discretion whether or not to admit the evidence. There is no “fruit of the poison tree” or automatic exclusionary rule.

A third Zellstoff Celgar case (re: Frauley Grievance) involved a different grievor but very similar facts. Arbitrator Sims agreed that swipe-card evidence was inadmissible, but also that: “The question of admissibility is a challenging one, with views ranging from total exclusion in all events to unrestrained admissibility…the approach in most cases is to engage in a principled balancing process given the interests and options involved.” (paras 69-70).

Employer Takeaways

  1. Employers can avoid admissibility issues by making sure that they collect swipe card data in compliance with PIPA. PIPA requires that employers provide prior notification to employees regarding the collection and use of personal information and the purposes for which the information will be collected and used (PIPA, s. 13(3); s. 16(3)). A well-drafted notice of collection and use which explains the purposes for the collection and use of personal information is crucial.
  2. If the employer does find itself having to persuade an arbitrator to admit evidence collected in breach of PIPA, it may be wise to argue that the evidence should be admitted on both the reasonableness and relevancy standards, and also that automatic exclusion does not apply. While reasonableness is ultimately favoured in the Zellstoff trilogy, the law does not yet appear settled in B.C. on admissibility.
  3. The battle-lines between privacy interests and management rights will probably become drawn most finely in the unionized work environment, where organized labour has the will and resources to strive to protect members from privacy intrusions, both real and perceived, that are caused by new technological tools.

This article was co-authored by Andrew Eyer