Wearable technology is becoming ever more popular, with particularly take up in the financial services sector. The growth of wearable technology is enabling employers to access more information about their workforce than ever before. Employers are increasingly using monitoring devices to track how much sleep employees have had, how well they work with other colleagues and even to monitor their body language, tone of voice or emotions – often 24 hours a day.

The increased use of this technology in the workplace brings both opportunities and challenges for employers. Used in the right way, the data collected from wearable technology can enable employers to seek to increase employee wellbeing, thereby increasing productivity and, ultimately, profit. The growing use of wearables does, however, pose some employment law issues of which employers should be mindful.

Considering consent 

At the outset, it is vital to obtain employees’ explicit and informed consent to use the technology and collect the data generated. For the consent to be valid, employers must be clear about exactly which data they will be collecting and what they intend to do with that data. They should also take care that they are not seen to be pressuring employees to agree. The simple inclusion of a clause in the employment contract consenting to the employer monitoring employees’ data in general terms would likely be insufficient to amount to valid consent and so separate consent for this level of monitoring is likely to be necessary. Ensuring security of the data will be key to obtaining agreement, as employees will want to be confident that their personal data are being processed appropriately and stored securely.

Enforcement challenges

Employers should carefully consider how to enforce any policy regarding the use of wearable technology. It is unlikely use could be made mandatory without considerable disruption. Any dismissal on the basis of an employee objecting to wearing the technology would likely be found to be unfair, unless the employer can establish a strong business reason for insisting on the use of the technology to track e.g. fitness levels. It is not straightforward to conceive of roles in the financial services sector where it could be said to be critical to the operation of the business to ensure employees attain a certain level of fitness, or a certain number of hours sleep. There are other businesses where such an argument may carry more weight, such as those with safety critical roles such as airlines, air traffic controllers, train operating companies and the armed forces. Even then, clear objective evidence of the link between the data generated and the safety of the operation would be required.

Employers in the financial services sector are therefore increasingly having to think of ways in which to incentivise their workforce to use the wearable technology, for example by making the provision of certain employee benefits (such as private medical insurance) contingent on agreeing to use the technology. Many employers have introduced employee wellness programmes which reward employees with good health practices (such as non-smoking or attaining certain exercise levels) with cheaper levels of insurance cover or enhanced employee benefits.

Liability: The flipside of knowledge 

As employers collect an increasing amount of information in relation to their employees from the wearable technology, their exposure to certain legal liabilities could also increase. For example, some forms of discrimination depend on employer’s knowledge in order to establish liability. An employer cannot be liable for discrimination arising from disability or failure to make reasonable adjustments unless it knew, or should have known, about the employee's disability. It is not difficult to imagine situations in which an employee does not inform the employer of an underlying medical condition but the employer would be deemed to be aware of it on the basis of health data collected from wearable technology.

When an employer has data from which a reasonable person could conclude that the employees has a serious health concern, a court or tribunal may be more likely to find that the employer had knowledge of the disability at the relevant time and ought to have taken reasonable steps to accommodate this. Even where the relevant business unit was not expressly aware of the disability, if the organisation collected information regarding employee stress levels a Tribunal would be likely to find imputed knowledge. Equally, if a sleep-deprived employee who had been working consistently long hours was to injure someone, and his/her employer was aware via the use of wearable technology of the employees’ hours worked and levels of fatigue, that employer may find it harder to avoid liability for the employees’ actions.

Employers wanting to take advantage of the growth of wearable technology, will need to navigate these legal challenges in order to maximise the benefits this technology can bring and ultimately change the way they interact with their workforce.  A focus on the measurable business benefits of data will be vital in justifying (and normalising) its collection.

Tom Kerr Williams is an Employment Law and Industrial Relations expert at PwC in London.