The Higher Labour Court of Baden-Württemberg (Landesarbeitsgericht Baden-Württemberg, docket number 4 Sa 61/15) decided on 4 July 2016 that the employer´s instruction of a private detective to investigate its suspicion of unlawful behaviour of its employee infringed German data privacy rules. The detective´s findings must not be used as evidence of the employee´s breach of covenant.

The employer entertained suspicions that one of his long standing employees worked for a competitor during his sickness absence. He instructed a detective to keep the employee under surveillance. The suspicion was borne out by the surveillance. The employer terminated the employment and requested reimbursement of the costs of the detective. The employer lost the Labour Court dispute in the second instance.

The appellate court ruled that the surveillance by the detective was not justified by German data privacy rules. The court stipulated three key principles which are of high importance for employers in Germany.

First, the employee´s surveillance by a detective creates personal data even if the detective does not use any electronic devices. It is sufficient that the observer collects any information regarding the employee and his/her location.

Second, the court denied a legal basis for the data processing in terms of German data privacy regulations. According to the Federal Data Protection Act (Bundesdatenschutzgesetz) data processing is, inter alia, allowed if it is necessary (i) for the performance of the employment relationship or (ii) to clarify suspicion of criminal conduct. The Higher Labour Court of Baden-Württemberg ruled that the surveillance was not necessary to perform the employment relationship, nor was the employee suspected of a criminal act. The employee breached his contractual obligations by working for a competitor, but breach of covenant does not constitute a criminal act.

Finally, the Higher Labour Court of Baden-Württemberg ruled that the results of the surveillance must not be used as evidence, as the creation of this evidence was unlawful. This decision is remarkable as German Civil law does not stipulate a general ban on exploitation of evidence which has been obtained unlawfully. However, the court decided that the processing of personal data was always high sensitive. Therefore, any breach of data privacy principles had to be assessed as a violation of personal rights as set out in Art. 1 of the German Constitution.

As a consequence, employers are highly recommended always to be very careful with the processing of personal data. The recent decision also provides a reason to have regard to the EU General Data Protection Regulation coming into force on 25 May 2018. The GDPR will heavily influence data privacy regulations all over the EU in particular due to its impact on the processing of workforce data.