CASE STUDY 4/96 ]
Circulating advertising material to employees
Arising from a complaint from an aggrieved employee, I was required to consider the use of the names and addresses of employees by their employers to advertise third party services. As part of its computerised payroll system, the organisation concerned provided a facility for deductions-at-source from wages in respect of a variety of services. A bank wished to promote its loan services to employees of the organisation and to this end arranged for the inclusion of marketing material in the envelopes containing the employees’ pay slips. Most of the envelopes were addressed to the employees concerned at their work locations, although a small percentage were sent to employees’ homes.
In data protection terms the complainant’s case was that there was a clear distinction to be drawn between the use of personal data (i.e. name and address) which are kept by a data controller (i.e. the employer) for a specified purpose (i.e. payroll/personnel administration) and the use of data for a different purpose (i.e. mail-shots by or on behalf of a bank). The data controller’s case was that informing staff of a new payroll deduction facility was considered to be part of personnel administration, and that the standard method – which had operated for many years – of informing all staff of a new deduction facility was to circulate material supplied by the relevant organisation.
I would clearly distinguish between:
(a) the use of payroll data to provide deduction-at-source facilities, including notification of the availability of such facilities by an employer,
(b) the use of payroll data to issue mail-shots on behalf of a third party such as a bank, and
(c) the disclosure of payroll data by an employer to a third party such as a bank to allow such a third party to issue a mail-shot to the employees.
In my view, use (a) is well within what might be termed the understanding which should be implied as existing between employer and employee about the use of personnel data whereas use (b) and disclosure (c) are outside such an implied understanding and are likely to contravene at least some of the requirements of section 2 of the Act.
In particular, the use of payroll data for host mailing purposes and disclosure of data to the bank (in the form of adhesive labels which for convenience were affixed by the bank before being circulated by the employer), were not compatible with the specified purpose of payroll/personnel administration contrary to section 2 (1) (c) (ii). Given that the purpose of the Act is to protect the privacy interests of individuals, I am inclined to take a relatively restrictive approach in interpreting the requirements of section 2 (1) (c) (ii) — on the lines set out in Case Study 8.
My views were accepted, and a direction was issued to all concerned advising them to desist from their long-standing practice of circulating advertising and reminder literature on behalf of third parties in addressed payroll envelopes. Marketing material may of course be circulated in unaddressed envelopes as this does not involve the use or disclosure of personal data. It is also clearly permissible for employers to use payroll/personnel data to notify their employees of payroll deduction-at-source facilities and that details of special offers are available by contacting the personnel section. Finally, if employees have been asked for consent then of course payroll/personnel data may be used for marketing purposes in accordance with the terms of that consent.
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