GPS in Company Vehicles: An Analysis by the Lisbon Court of Appeal

The use of geolocation (GPS) systems in vehicles assigned to employees is an increasingly common practice, particularly in activities involving external travel, fleet management, technical support or sales functions.
Despite their operational advantages, these systems raise challenges in employment and data protection law, particularly regarding employees' right to privacy and the prohibition on the use of remote surveillance tools to monitor professional performance.
Very recently, the Lisbon Court of Appeal reaffirmed a restrictive interpretation of Article 20 of the Labour Code, concluding that accessing a vehicle's location data in order to verify the accuracy of the activity reported by an employee constitutes unlawful use of a remote surveillance tool.

Legal Framework

Article 20 of the Labour Code prohibits the use of remote surveillance tools where their purpose is to monitor an employee's professional performance, even where such tools also allow information to be obtained on schedules, movements or productivity.
The law does, however, permit the use of such mechanisms for legitimate purposes, namely the protection and safety of people and property, or specific requirements arising from the nature of the activity, provided employees are informed of the existence, purpose and functioning of the system. Breach of this prohibition constitutes a very serious administrative offence.
Because it involves identifiable location data, the use of GPS systems is also subject to the GDPR and to Law No. 58/2019, of 8 August, Article 28 of which provides that the processing of data in an employment context may not be used to circumvent the prohibition set out in Article 20 of the Labour Code.

The Court’s Decision

The proceedings arise from a decision of the Labour Authorities, which sanctioned a company for using data from a GPS device installed in a vehicle assigned to an employee performing sales functions.
The employee used a company vehicle for her business trips and, following customer complaints, the required detailed daily reports on those trips.
It was deemed proved that, upon submission of those reports, the company checked the GPS history and compared the recorded routes with the information provided by the employee.
The Court upheld the ACT's sanctioning decision, finding that the company's conduct amounted to the unlawful use of a remote surveillance tool.
According to the judgment, GPS systems in work vehicles constitute remote surveillance tools, and their lawfulness depends on the specific purpose for which the data is used.
Use is legitimate where intended, for example, for: (i) vehicle management and location; (ii) protection of the company's assets; or (iii) safety of people and property.
Conversely, its use becomes unlawful where intended to: (i) confirm employees' visits; (ii) check working hours; (iii) monitor individual movements; or (iv) control productivity or compliance with professional duties.
In the specific case, the Court found that the GPS history was checked in order to verify whether the employee had actually carried out the activity described in her reports, which amounts to direct monitoring of her professional performance.
The Court rejected the company's defence based on the employee's knowledge and presence when the data was accessed, since the prohibition in Article 20 of the Labour Code is mandatory and cannot be set aside by agreement between the parties, even where prior consent was given.
The Court likewise rejected the argument that the company was unaware of the unlawfulness, since it was shown that the access was deliberate, and the employment contract itself provided that the surveillance tools could only be used for the safety of people and property.

Practical Implications for Companies

This judgment is an important warning for companies using GPS systems in service vehicles. Installing these devices is, in itself, permissible in certain contexts, but the use of the data collected is subject to strict legal limitations. Companies should, in particular, ensure that:
1. The purpose of the GPS system is legitimate and defined in advance, and relates to operational, safety or fleet management needs;
2. Employees are properly informed about the existence of the system and the conditions under which the data is processed;
3. The collection and use of the data comply with the principles of need and proportionality;
4. GPS data is not used to monitor, assess or oversee employees' professional performance, even on an occasional or one-off basis.

Conclusion

The judgment reaffirms that the purpose for which data obtained from GPS systems is used determines the lawfulness of that use, and that employees' knowledge of the system is irrelevant. Whenever the data is used to confirm trips, check activity, or monitor professional performance, this amounts to a prohibited use, which may give rise to serious administrative liability.