1. Wearable technology makes for a great headline

“Worker fired for disabling GPS app that tracked her 24 hours a day” 

“Man infects himself with a computer virus” 

“Office implants [electronic] chips in employees’ hands”

2. Does this affect you?

Wearable technology will affect the way in which employers interact with their employees in the future.

There are currently four key groups affected by wearable technology:the technology designers / developers / retailers

  • the consumers of wearable technology
  • employers; and 
  • employees.
  • There are cross-overs between these groups of course, but we’ve focussed below on employers and employees.

3. What is wearable technology?

Wearable technology is an electronic device that can be worn on the body. It may be incorporated into clothing or it may be a standalone accessory (like a smart watch). The wearable is typically connected to the Internet – so that data can be uploaded, exchanged and analysed.

Because of their prevalence, many people regard smart phones as wearable technology – and we will too in this article.

In the workplace, wearable technology may be supplied by the employer or already owned by the employee in his/her personal capacity.

4. What are the benefits of wearables for you as an employer?

You can easily collect and analyse employee data using wearable technology. This may allow you to monitor your employees’ performance or figure out how you can improve the services you offer to your clients.

GPS trackers fitted to workers and products in distribution centres can help employers to track the efficiency with which products are being collected, manage stock levels and improve accuracy. This may allow you to streamline your operations – it has been reported that some distribution centres have been able to reduce their headcount by up to 20% by the careful use of wearable GPS devices.

It could make your business more efficient in other ways too. In early 2015, workers at an office in Sweden exchanged their building passes for a chip in their hand; access to facilities, the operation of equipment and sharing contact details could suddenly be done with the swipe of a hand. This will not eradicate inefficiencies in itself, but one can see the potential for this sort of technology being used more broadly in a way that might. Of course, this raises all sorts of questions:

  • Are such implants permissible at all in the jurisdictions in which you operate? 
  • What if an employee refused to be implanted? 
  • Who is responsible if there were a medical complication with an implanted chip? 
  • How secure is the chip: can it be hacked? Is confidential information stored on it?

5. What rights do your employees have?

Policies and collective bargaining

You should check your existing policies on monitoring employees and data privacy. Many employers find that they’re no longer fit for purpose because they don’t cater for wearable technology. They should cover both the use of devices provided by the employer and also an employee’s personal device. For example:

  • Can you require an employee to hand over his/her personal device if you suspect wrongdoing (such as stealing confidential information)? 
  • Do you allow personal or work devices to be used to record meetings? 
  • Can you track an employee’s location when he/she’s at work? What about when he/she’s not at work? Does it make a difference if the employee is using a company car? 
  • Can you require an employee to install a particular app on his/her work smart phone? What if it is a personal smart phone but the app is for business use? What if he/she refuses? 
  • What will you use the data that you collect for? Can you use it for the purposes of deciding whether an employee will be promoted (or dismissed)? 
  • Is informed explicit consent required in any particular jurisdictions for any action you want to take? 
  • Who is liable if the private device is damaged while being used for work purposes?

In many EU countries, you may not be able to introduce wearable technology – or monitor an employee’s own wearable device – if you have not informed and/or consulted the applicable works council.

Data protection

Data privacy is an obvious concern. In the UK, the data privacy regulator (the Information Commissioner’s Office) has been clear: wearable technology is as much subject to data protection laws as any other data sharing platform. As in the rest of the EU, this means that data must be processed fairly, for a legitimate purpose and should not be transferred outside the EU where the receiving country does not have adequate data protection safeguards (in many cases, this means transfers to the USA are difficult).

Although current EU law has failed to keep track of technological developments, it muddles along as well as it can for now. However, the new EU data protection regulation, which officials say is expected to be finalised by the end of 2015 (and possibly in force from 2017), is likely to bring in some radical changes. These include:

  • Extra-territorial effect (i.e. you don’t need to be based in the EU for the law to apply) 
  • Higher fines of potentially up to 2% of worldwide turnover (or even 5% should the EU Parliament’s position be adopted) 
  • No need for the individual to have suffered material financial damage for them to bring a successful claim for compensation 
  • A broader obligation to self-report data protection breaches

You need to ensure that your internal policies make it clear to your employees what you may use their data for; how long that data may be kept; and how it will be kept secure during that time. In certain countries there may also be legislation on telecommunications and correspondence secrecy to consider.

6. What other risks do you face?

Losing confidential information

How easy is it to record and store your commercial confidential information on a wearable device? If data is uploaded via the cloud, it may be more difficult to track. The loss of confidential information may damage your business, incur fines with regulators and lose you customers.

A strong and stable security system is essential. This is even more important in relation to personal wearable devices where, in practice, it may be difficult to prevent employees from covertly accessing, storing and transmitting information.

Employment contracts and policies should make it clear that the use of personal devices to store confidential information is not permitted – and that after employment terminates any such information must be deleted. Your policies may be out of date and only cover hard copy materials.

Industrial relations, fines and reputation management

You may damage your brand if you do not think about the issues of wearables in advance. Some large organisations have had negative publicity in recent years after accusations that they monitored employees’ movements (including their trips to the bathroom) and terminated those who weren’t working quickly enough. The BBC has reported that excessive monitoring can damage workers’ health. These topics are almost always newsworthy and can be used by the press and unions to create negative publicity for employers.

Other employers in Germany have been accused of covertly monitoring their employees, while another was fined by the data protection authority for tracking an employee’s car after he’d left work (he was caught out having an affair with a colleague as a result!).

Disciplinary proceedings and covert recording

You should expect that wearable devices will increasingly be used (i) as evidence in disciplinary hearings; and (ii) to record disciplinary hearings. For example, an employee may secretly film or photograph behaviour that they say is victimising or discriminatory. Or they may record other colleagues' performance or behaviour as a basis for blowing the whistle. You need to think about whether you are happy with this and what steps could be taken now to manage the implications.

You should consider setting clear guidelines on whether covert recording is admissible evidence in disciplinary hearings (in most countries disciplinary hearings do not have the same evidence requirements as a court – it may not be necessary to see covertly recorded information to make a determination).

You may also wish to consider recording disciplinary hearings yourself so that employees cannot manipulate their recording or produce an unverifiable version at a later date (for example in an employment tribunal). However, in some countries – including Germany – it is a criminal offence to secretly record a hearing without the consent of the attendees. You should get local advice if this is something you want to introduce.

Productivity

We’ve said that there is an opportunity for wearables to improve efficiencies. The flip side is that technology can be a distraction: think how often you may be tempted to browse Facebook or buy something on Amazon when you’re at work. You may need sophisticated policies that make it clear when and how much employees can use their devices.