Staff are watched by many different means

New rules governing monitoring of employees say that covert surveillance is rarely justified and instead firms should inform workers of the extent they are being watched.

The rules form a code of practice that employers will be expected to follow.

Firms that fail to follow the rules could find themselves in court if they trample on the privacy rights of their workers.

Court threat

The code has been published by the UK's Information Commissioner to give businesses a clearer idea of their obligations under data protection and human rights legislation.

Many firms carry out monitoring of the online activities of staff to watch for spam, viruses, to filter out undesirable material and to stop confidential material travelling outside the company either accidentally or maliciously.

In reality there are few circumstances in which covert monitoring is justified Richard Thomas, Information Commissioner

Some financial firms record phone calls to ensure compliance with industry regulations and as a check on fraud.

Richard Thomas, the UK Information Commissioner, said guidelines covering these situations tried to balance the needs of employers and the rights of employees.

"If any monitoring is to take place it must be open and transparent and with the knowledge of the employee," said Mr Thomas.

The code of practice demands that workers should be told what sort of monitoring is going on and why it is being done. There are also limits on what firms can do with any information they gather.

It also puts conditions on covert surveillance of staff.

"In reality there are few circumstances in which covert monitoring is justified," he said.

The code says that such surveillance would only be justified to prevent malpractice or crime.

Companies that take liberties with employee rights to privacy in electronic communication could find themselves in court.

"Employers may have alternative ways of meeting these requirements," the commissioner's advice said. "But if they do nothing, they risk breaking the law."