Take a look at the Information Commissioner's Code of Practice for employers relating to the monitoring of staff at work. Or failing that, take legal advice. The Code is quite detailed, but the general principle is that you must make employees aware of how they will be monitored in the workplace (for example, by looking at their telephone, email or internet usage, or monitoring their movements by CCTV or vehicle tracking systems) and use the least intrusive methods of monitoring available to achieve your goals. This principle has recently been confirmed by the European Court of Human Rights, which found that a college which monitored an employee's use of the telephone without informing her, breached her right to respect for her private life and correspondence.
Covert surveillance is allowed only in very limited circumstances, such as where there is suspected criminal activity. You will also have to take steps to ensure that you do not fall foul of associated legislation relating to the interception of communications.
