A leading local lawyer has warned Australian business they could face a heavy cost if their electronic usage policy does not detail the extent they log employees' technology habits.

Phillip Hourigan, a partner at the law firm Deacons, said Australian businesses who failed to draft comprehensive electronic usage policies could find themselves unable to use the information to back their position in an employee dismissal case.

Hourigan issued the warning amidst indications of increasing tension between privacy advocates and business over the intensifying monitoring of employees' electronic work habits. Corporate IT departments, which have a prominent role in undertaking electronic monitoring, are heavily affected by the debate.

Hourigan said companies had to be careful about the activity they monitored and the information being collected. He added that IT departments had to ensure their activities complied with corporate policies and employment contracts with staff.

"The message is that IT departments need to work closely with HR departments to make sure the activity they're logging is contemplated in the employment agreement and the technology use policies," he said.

He also advised IT departments to work closely with privacy compliance officers to ensure their activities fell within guidelines specified in recently-enacted privacy legislation.

Hourigan's remarks follow questioning by civil liberties advocates as to whether monitoring technologies invade the personal privacy of employees. At the time Cameron Murphy, president of the NSW Council of Civil Liberties, argued that companies should not be entitled to view e-mail that's marked private to an employee, without their permission or consent.

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