Can an employer have an employee monitored by a detective?

If an employer suspects that an employee is committing breaches of duty in the employment relationship, such as working time fraud, competitive activity or compliance violations, the question arises as to how the breaches of duty may be investigated. Companies repeatedly seek the support of professional detectives in such cases. Nils Wigger, solicitor and specialist in employment law at the law firm Wittig Ünalp, explains what needs to be considered in such cases.

There are a large number of professional investigators who offer their services and detective surveillance not only in cases of divorce and disputes over maintenance obligations, but also to monitor employees whom their employer suspects of serious breaches of duty. However, this raises the question of whether this is permissible, whether the detectives’ findings can be used in court proceedings at all, and who has to bear the costs of surveillance if a breach of duty can be proven.

Can an employer hire a detective?

In principle, an employer may hire a detective to monitor an employee if there is reasonable suspicion that the employee has committed a criminal offence. This is particularly the case when it comes to theft within the company. However, even then, monitoring is only permissible if there is a clear suspicion as to who the perpetrator might be. General surveillance of all employees is not permitted across the board.

However, the use of a detective is also permissible when it comes to investigating serious breaches of duty, such as competitive activity during an employee’s sick leave. In its ruling of 29 July 2017 (Ref. 2 AZR 597/16), the Federal Labour Court ruled that hiring a detective agency may be permissible if there are urgent grounds for suspicion.

Since the surveillance of an employee by a detective always constitutes a serious infringement of the personal rights of the person concerned, the proportionality of the surveillance must be examined in addition to the specific suspicion of a serious breach of duty. In this respect, the employer must first use all milder means (such as questioning the employees or the employee himself) to substantiate his suspicion.

Employers should therefore first document thoroughly the basis for their suspicion of a specific serious breach of duty by the employee. If this is successful, employers must then examine whether the use of a detective is proportionate. Only then may the detective agency be commissioned.

What about data protection?

According to Section 26 (1) sentence 2 BDSG, personal data of employees may be processed for employment purposes if documented factual evidence gives rise to the suspicion that the data subject has committed a criminal offence in the course of their employment, processing is necessary for detection, and the employee’s legitimate interest in excluding processing does not outweigh this, in particular if the nature and extent are not disproportionate in relation to the occasion. This may be the case, for example, if there is concrete suspicion of working time fraud.

However, even without a criminal offence, monitoring of employees may be permissible under Section 26(1) sentence 1 BDSG if it is necessary for the performance or termination of the employment relationship.

However, the detective’s investigations must comply with the principle of data minimisation. Information that does not serve to clarify suspicions may not be collected and processed. If it becomes clear that the surveillance is not yielding any useful results, it must be terminated immediately.

Can the results of surveillance be used in court proceedings?

The findings obtained by a detective through surveillance may then be used in court proceedings, provided that the surveillance was carried out lawfully.

Even if the surveillance of an employee by a detective agency were inadmissible, this would not necessarily result in a prohibition of evidence. A prohibition of presenting facts or using evidence can only be considered if the non-consideration of submissions or evidence is mandatory due to the legal position of the employee protected by Union law or Section 2 (1) in conjunction with Section 1 (1) of the German Basic Law (GG) (Federal Labour Court, judgment of 29 June 2023 – 1 B 6/23 – 11). 2 (1) in conjunction with Art. 1 (1) of the German Basic Law (GG) (Federal Labour Court, judgment of 29 June 2023 – 2 AZR 297/22).

Surveillance by detectives, through observation, photography and documentation, as well as the installation of a GPS transmitter on a company vehicle, do constitute an infringement of personal rights and the right to informational self-determination.

However, this intrusion is minor if it only takes place during working hours, in public spaces and over a period of a few days, and the detective only documents what any passer-by could also have observed. In such a case, even if the surveillance was inadmissible, the evidence would still be admissible in court.

Who bears the costs of the detective?

In its ruling of 11 February 2025 (7 Sa 635/23), the Cologne Regional Labour Court ruled that a ticket inspector who engaged in other activities during his working hours (including visiting a bakery and visiting his girlfriend) could be dismissed without notice.

However, the Cologne Regional Labour Court further ruled that the employer was entitled to hire a private detective to investigate the working time fraud and that the employee must pay the employer the detective’s fees of €21,608.90 as compensation.

In this respect, the employee must reimburse the employer for the necessary costs incurred by hiring a detective due to a breach of employment contract obligations (Section 280(1) of the German Civil Code (BGB)), if the employer commissions a detective to monitor the employee on the basis of concrete suspicion and the employee is found guilty of an intentional breach of contractual obligations.

The obligation to pay damages extends to all expenses incurred by the employer, insofar as these are deemed necessary under the circumstances of the case. In addition, the employer is only entitled to reimbursement for measures which a reasonable, economically minded employer would have taken in the circumstances of the individual case not only as appropriate but also as necessary to remedy the disruption or prevent damage (Federal Labour Court, judgment of 26 September 2013 – 8 AZR 1026/12).

Does the works council need to be informed?

The works council does not appear to have a right of co-determination in the surveillance of individual employees due to the lack of collective circumstances. However, any violation of the works council’s co-determination rights or insufficient compliance with a works constitution procedure would not in any case constitute an independent prohibition of use (Federal Labour Court, ruling of 29 June 2023 – 2 AZR 296/22). Therefore, no information is required.

Conclusion

In certain situations, employers are permitted to hire a detective, and the results can be used in court proceedings. In addition, reimbursement of costs may even be considered as part of a claim for damages against the employee. However, it should be noted that this only applies if the employer has sufficient concrete grounds for suspicion in advance.

Reimbursement of costs will only be considered if the employee is actually found guilty of intentional breach of duty as a result of the detective’s investigation; otherwise, the employer will be left to bear the costs. Hiring a detective should be well prepared in order to avoid high costs in terms of the detective’s bill. In addition, excessive surveillance measures may result in claims for compensation and damages from the employee concerned.