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Introduction
The General Data Protection Regulation (GDPR) has been in effect for seven years, yet many organizations still misunderstand its core principles—particularly regarding employee consent for data processing. This article explores common legal missteps, correct legal bases under GDPR, and best practices for compliance in employment contracts.
Learning Objectives
- Understand why employee consent is often the wrong legal basis for data processing.
- Learn the correct GDPR articles (Art. 6(1)(b) and Art. 88) for lawful employee data handling.
- Identify alternative legal grounds beyond consent for HR data processing.
You Should Know
1. The Myth of Employee Consent Under GDPR
Legal Reference: Art. 6(1)(a) GDPR (Consent) vs. Art. 6(1)(b) (Contractual Necessity)
Many employers wrongly assume they need explicit employee consent to process personal data (e.g., payroll, contact details). However, GDPR Art. 6(1)(b) states that processing is lawful if “necessary for the performance of a contract.”
Key Takeaway:
- Consent must be freely given—employees cannot freely refuse without consequences, making it invalid.
- Instead, rely on contractual necessity (e.g., processing bank details for salary payments).
2. Correct Legal Basis for HR Data Processing
Legal Reference: Art. 88 GDPR (Employee Data in Employment Context)
Many HR departments misuse consent forms when they should instead reference Art. 88, which allows member states to legislate specific employee data rules.
Example:
- Germany’s §26 BDSG (Federal Data Protection Act) permits processing if necessary for employment.
Actionable Step:
Replace:
> “The employee consents to data storage.”
With:
“Data processing is necessary for fulfilling the employment contract under Art. 6(1)(b) GDPR and §26 BDSG.”
3. When Consent Is Required
Scenario: Employee photos for marketing.
Unlike payroll data, publishing employee photos requires explicit consent (Art. 6(1)(a)).
Best Practice:
- Use a separate consent form (not buried in the employment contract).
- Allow opt-out without employment repercussions.
4. Third-Party Data Sharing Risks
Issue: Sharing data with payroll providers.
Solution:
- Include a data processing agreement (DPA) per Art. 28 GDPR.
- Specify in contracts that third-party transfers are necessary for employment.
5. Handling Employee Objections
Problem: What if an employee refuses data processing?
Response:
- If processing is contractually necessary, refusal may breach employment terms.
- If based on consent, the employer must stop processing—but this rarely applies to core HR functions.
What Undercode Say
- Key Takeaway 1: Consent is overused—most employee data processing falls under contractual necessity or legal obligation.
- Key Takeaway 2: Misapplying consent creates compliance risks; audit employment contracts for proper GDPR bases.
Analysis:
Many organizations default to consent due to poor legal advice or misinterpretation of GDPR hierarchy. However, reliance on invalid consent exposes companies to fines (up to €20M or 4% of global revenue). Future enforcement will likely target systemic misuse of consent in employment, making proactive compliance critical.
Prediction
As GDPR awareness grows, regulators will increasingly penalize improper consent clauses in employment contracts. Companies must shift to Art. 6(1)(b) and Art. 88-aligned policies to avoid legal and reputational damage.
Further Reading:
By correcting these misconceptions, businesses can ensure lawful, defensible employee data practices under GDPR.
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