Legal framework for wearables: Complete monitoring or useful tools?

 How to make the introduction of data glasses, smart hands, etc. a win-win situation.

Legal framework for wearables: Complete monitoring or useful tools?

Digital assistants such as data glasses, gloves with sensors and scanners or exoskeletons can increase efficiency and assist employees. Yet at the same time, they are also a potential source of work intensification and permanent monitoring. What legal pitfalls do HR managers need to avoid when companies introduce wearables?

Employees are relatively open to the use of digital assistants if the benefits are obvious and misuse is ruled out. This was the conclusion reached by recent study by the Hans Böckler Foundation, an organization with close ties to the trade unions. According to the study, reliable, transparent rules and limits to their use are essential in order to ensure that the introduction of these technologies is accepted. The survey looked at employees at logistics and manufacturing companies with works councils who had experience with wearables: for example, with data glasses, gloves with sensors and scanners, or “pick-by-voice systems” which provide employees with step-by-step guidance during picking and handle the planning.

Greater efficiency and yet still less stress

According to the managers who participated in the study, digital assistants help to eliminate unnecessary work with paper lists to speed up work processes, improve ergonomics, and also prevent errors and malfunctions. One of the reasons why employees rated the technology positively was that efficiency increases had not led to job cuts or more demanding performance requirements. Alongside fewer errors, work intensity and stress also decreased. What legal pitfalls need to be avoided to create a win-win situation like this for employers and employees?

  1. Observe employee data protection
    Wearables generate personal data that requires special protection pursuant to the General Data Protection Regulation and the Federal Data Protection Act. Depending on the specific application, comprehensive performance and behavior monitoring or even constant monitoring of employees is conceivable by using the digital assistants to measure the speed at work, and document deviations from specifications or errors, for example. That is why employee consent or a legal basis for the data processing is necessary.
  2. Data protection takes priority over the employer’s right to issue instructions
    The employer’s right to issue instructions pursuant to Section 106 of the Trade, Commerce and Industry Regulation Act (GewO) and Section 611(1) of the German Civil Code (BGB) does not offer a corresponding legal basis. Rather, the issue is subject to data protection law due to the fact that the employees’ right of self-determination with regard to information also applies in the employment relationship.
  3. When is the use of wearables appropriate?
    When utilizing data glasses or smart hands, Section 26 of the Federal Data Protection Act comes into play. However, only in cases where there is no equally suitable alternative capable of simplifying the work or protecting health which does not infringe on the employees’ informational self-determination to a lesser extent. As such, the interests of the company must be weighed against the personal rights of the employees. Data processing with the help of wearables must be limited to the absolutely necessary scope required to perform the work. Exceptions apply if the job involves special health hazards such as sensors in the protective equipment of rescue workers or when working with hazardous substances. The law always sets limits when employees’ private or even intimate sphere is involved or when complete monitoring becomes the possibility.
  4. Company agreements provide the ideal solution
    Against this background, a company agreement is often advisable as a legal basis. Ultimately, the works council has a right to co-determination pursuant to Section 87(1)(6) of the Works Constitution Act (BetrVG) when it comes to technical devices such as wearables. Moreover, Section 80 of the Works Constitution Act (BetrVG) states that the works council also assumes a monitoring role for data protection.
    Companies without a works council can also benefit from company agreements governing the introduction of wearables to boost acceptance of the new technology: According to the study by the Hans Böckler Foundation, reliable and transparent rules and limits on use are key factors when it comes to the success of the new technology. The researchers reached this conclusion after examining 16 case studies in which managers, works councils and employees from the logistics and manufacturing sectors in the automotive, electrical engineering and automation industries were interviewed. Despite extensive efforts, the researchers were unable to obtain access to companies without works councils. They have concluded that the case studies tend to represent best practices.
  5. Caution with wearables for company health management
    Companies are also increasingly utilizing wearables such as fitness trackers, smartwatches or apps on work smartphones as digital assistants for company health management. These devices measure calorie content, stress management and exercise, for example. HR managers are then confronted with the fact these devices collect sensitive health data which requires special protection in accordance with Art. 9 GDPR. These wearables are only permissible subject to explicit employee consent, which must be granted voluntarily. Furthermore, strict IT security requirements also apply. If an employer violates the employees’ right to informational self-determination by using fitness trackers, employees can be entitled to refuse to work until the company ceases to unlawfully use the wearables. Under certain circumstances, companies face the risk of claims for damages and compensation for pain and suffering.

To create a win-win situation for employers and employees when using wearables, we recommend implementing company agreements which establish reliable and transparent rules for the use of data glasses, smart hands, etc. and define the limits for the data usage. This applies regardless of whether a company is subject to co-determination or not. If employees are permitted to make their own decisions regarding the recording and use of data, the study by the Hans Böckler Foundation has found that, in Germany, they are even essentially open to the measurement of emotions while working: Only 32 percent expressed reservations. 23 percent expressed reservations about recording body signals such as the pulse rate and 25 percent about recording movements.