Update Data Protection No. 138

Unlimited Monitoring of Employees?! – Update on the Judgment of the Administrative Court of Hanover on the Tracking of Employees in a Logistics Center

The press release from the Administrative Court of Hanover made headlines back in February of this year. The court had allowed a company to use hand-held scanners to track the work steps of employees in a logistics center from the receipt of goods to issuance of goods. In the meantime, the full judgment (case no.: 10 A 6199/20) has been published. Time to take a closer look at the facts and the decision.

The case

The suing company, which defended itself against a prohibition order by the Lower Saxony State Commissioner for Data Protection, operates a logistics center with a working area of 64,000 m2 in which between 1,700 and 2,200 people work, depending on the season. Approx. 153 packages are dispatched per minute. Around four hours are allowed to elapse between the receipt of an order and the delivery of a package to the carrier, so that the company can keep its delivery promises to customers.

The employees use hand-held scanners on the various process paths in the logistics center to document each of their work steps. The data collected in real time is stored and evaluated. The company mainly uses the data for the following purposes:

  • evaluation of team and individual performance in order to be able to react to performance fluctuations on the individual process paths when controlling the processes, for example, by shifting employees around;
  • control of individual qualification;
  • creation of objective bases for assessment for individual feedback and personnel decisions

The defendant authority prohibited the plaintiff with its interim decision from (i) the uninterrupted minute-by-minute collection of quantity and quality data on its employees, (ii) the creation of profiles from this data and (iii) the use of this data and the profiles created from it for feedback discussions and process analyses.

The lawsuit was directed against this decision.

The decision

The Administrative Court of Hannover considers the aforementioned data processing by the company to be lawful, upheld the lawsuit and overturned the decision of the data protection authority. In summary, this result is based on the following considerations:

  • The real-time collection of performance data is therefore justified as, without the derivation of immediate measures from this data, goods backlogs can arise and/or peak loads in individual process sections cannot be compensated for by shifting employees around. The smooth process flow in the logistics center therefore justifies the real-time collection and evaluation of the tracking data from the hand-held scanner. Less stringent means of achieving this goal are not available.
  • The collection and processing of the tracking data is necessary for the qualification of the employees. According to the belief of the Administrative Court of Hannover, the employees’ need for additional qualifications can be determined using the real-time data, both in the training phase and in later qualification measures.
  • The use of the data for the continuous implementation of feedback meetings is also justified because fact-based feedback is only possible on the basis of the aforementioned performance data. In the opinion of the company and the Administrative Court of Hannover, feedback discussions based on aggregated data in the present case are neither advantageous for the employees nor for the company. The added value of the feedback would otherwise be lost due to the poorer data situation.
  • Finally, the storage of the performance data for three months is not objectionable, nor is the storage of the feedback history for a maximum of twelve months with a quarterly comparison of the performance level.

As part of the examination of the intensity of the encroachment on the employees’ personal rights, the Administrative Court of Hannover assessed further aspects, such as the formation of performance profiles, the type of data processed (pure performance data) and also checked whether the data collection from the employees triggers a permanent pressure to perform and adapt, which is ultimately dismissed.

It is interesting that the company’s data processing is also supported by its Works Council. The current and former chairs were even called as witnesses in the proceedings and confirmed that it was clear to every employee that the tracking data was required for the work process.

Incidentally, the Court found that the legal basis for the data processing by the company in connection with the monitoring of employees is Sec. 26 of the German Data Protection Act (Bundesdatenschutzgesetz – BDSG). The recourse to the legal basis of Art. 6 GDPR is blocked by Art. 88 (1) GDPR. Section 26 (1) sentence 1 BDSG is a lex specialis to Article 6 (1) (b) and (f) GDPR. This opinion is not undisputed in view of the question submitted by the Administrative Court of Wiesbaden to the European Court of Justice (case no.  23 K 1360/20). As a result, however, the Court found that the processing would (especially) also be covered by Article 6 (1) (f) GDPR.

Classification and conclusion

The Administrative Court of Hannover applies an extremely generous standard when assessing the legality of the monitoring of employees and thus opposes the position of the data protection authorities and the labor courts. The data protection authorities consider permanent video surveillance in the employment relationship to be fundamentally inadmissible because employees have to fear throughout their working hours that their behavior will be recorded, later reconstructed and controlled, so that constant pressure to monitor and adapt is generated (see Orientation Guide Video Surveillance by Non-Public Positions, available here). The German Federal Labor Court, for example, classified the use of “keylogger software”, with which the employer secretly and constantly recorded and evaluated the keyboard movements of employees, as disproportionate and therefore inadmissible (judgment of July 27, 2017, case no. 2 AZR 681/16).
Even if there was no video surveillance in the present case and the employees were informed about the data processing, it is still a question of intrusive, continuous surveillance.

The liberal attitude of the Administrative Court of Hannover does not therefore mean a free pass for the monitoring of employees. On the one hand, it remains to be seen whether the German Higher Administrative Court will confirm the opinion of the Administrative Court of Hanover in any appeal proceedings. On the other hand, the present facts are an individual case in which the special requirements for the logistics processes of the plaintiff company played an important role in the legality check of the data processing. The judgment is therefore by no means simply transferable to other cases.

A thorough legal permissibility check is therefore still required for any type of employee monitoring, whether it is aimed specifically at work performance or behavior or not. In addition, the involvement of the relevant parties (works council and data protection officer) and the requirements for documenting such measures must be observed in every case. In the present case, the plaintiff company was apparently very well positioned in this area.

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