The CCTV film came to light following reports late last year that the employee in question was filing a lawsuit against Hemmes over the incident.
In the video, a security guard can be seen to be blocking the exit while Hemmes orders the employee to strip and another guard conducts the search.
But is there ever a situation wherein strip searching an employee is appropriate?
HC spoke to Michael Michalandos, partner at Baker & McKenzie, about the legal context of Hemmes’ actions.
“An employer can require an employee to comply with a direction which is lawful and reasonable and also has a right to take steps to prevent its property from being illegally removed from the workplace,” he explained.
“Reasonable directions may extend to basic and non-invasive searches of an employee or an employee's property, where there the employer has good grounds to believe that the employee is concealing stolen property.”
Michalandos added that an employer may also require an employee to answer reasonable questions about their conduct.
“It is very unlikely that these rights would ever extend to strip searches without the express agreement of an employee,” Michalandos continued.
“The Australian Courts have been quite conservative when it comes to invasive searches or testing. For example, drug testing is only permitted in limited cases – such as where the employee's work involves clear health and safety risks.
“Prudent employers obtain agreement from their employees (and their Unions) on these types of matter in advance.”
Michalandos also told HC that in these cases, an employee who refuses to comply with a search or testing may be subject to termination or other disciplinary action.
“Forcing an employee to undergo a strip search could get an employer into a whole lot of trouble,” he said. “If necessary, the employer should just call the police.”
Danny Luu – the employee in question – was reportedly suspected of stealing thousands of dollars from the Establishment hotel in Sydney.
“Do you know who the f*** I am?” Hemmes allegedly demanded, according to court documents.
One of the security staff was alleged to have yelled at Luu: “where is Justin’s money?”
Following the search, which found no money in Luu’s possession, Hemmes and his security staff took Luu to his home to continue the search.
The case ended with both parties agreeing to an out-of-court settlement.
HC also spoke to Lucienne Gleeson, associate at PCC Lawyers, who weighed in on the case.
“Surveillance and investigation of employees in the workplace must be very cautiously carried out,” she said.
“If an employer wrongfully searches an employee’s bags, locker or person they could not only compromise any potential lawful termination of employment, if an employee is suspected of theft, but they could potentially also be liable for criminal or tortious acts.”
Gleeson also pointed out that theft is not only a disciplinary matter for which an employee can be terminated, but is also a serious criminal matter.
“If an employer suspects that theft has occurred and that an employee is concealing money or items they should contact the police to handle the matter,” she explained.
“An employer is not required to show absolutely that an employee has stolen from them in order to terminate their employment. Rather, an employer should carefully consider the matter, put the issue to the employee for their response (with a support person present) and finally if they are still reasonably suspect of having stolen terminate their employment.
“Termination for stealing is considered serious misconduct an employee is not required to pay notice in such a situation.”
She added that if an employer does obtain evidence of theft illegally or improperly and subsequently terminates an employee they could be considered to have unfairly dismissed them regardless of the employee’s actions.
“This could include covert surveillance, checking bags or lockers of employees without their presence or consent, or potentially breaching employee privacy in some other way such as searching a person,” Gleeson told HC.
“An employee could as a result of this be entitled to reinstatement or compensation.”
Footage has emerged of Merivale CEO Justin Hemmes ordering a strip search of one of his employees, who was expected of stealing money from the company.