Federal privacy legislation generally does not apply to workplaces, but some of the general principles do.
According to recent changes to the privacy laws, and explanatory document published by the Federal Commissioner an Employee record means:
a record of personal information relating to the employment of the employee (section 6(1)). It includes health information about an employee and personal information relating to: the engagement, training, disciplining, resignation or termination of employment of an employee;
the terms and conditions of employment of an employee;
the employee's performance or conduct, hours of employment; salary or wages; personal and emergency contact details;
the employee's membership of a professional or trade association or trade union membership;
the employee's recreation, long service, sick, maternity, paternity or other leave;
the employee's taxation, banking or superannuation affairs.
Employers would not necessarily be able to assume that all the information they hold that relates to an individual employee would be an employee record. For example, emails that an employee has received from third parties outside the organisation may not necessarily be an employee record.
Depending on the circumstances, the exemption may also not cover the content of many other employee emails.
The employers should consider the privacy of employees records when specific circumstances seem to require others to access them.
Employees should have access to their own personal files, but others shouldn't
Information about previous employment relationships and current relationships should not be passed on to third parties
Guidelines to the National Privacy Principles
http://www.privacy.gov.au/publications/nppgl_01.html
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