In December of '04, I blogged about a case in which an arbitrator ruled that employees in the provincially regulated private sector in Ontario have no right to privacy. (See PIPEDA and Canadian Privacy Law: Employees in Ontario (and perhaps other Canadian provinces) have no right to privacy.) Since this area is consistently inconsistent, here is a rececent decision of an Ontario arbitrator who has decided, yes Virginia, there is a free-standing non-statutory right to employee privacy in Ontario, at least under "arbitral law": LIUNA, Loc. 625 v. Prestressed Systems Inc.
Employees expect their privacy to be protected. Sometimes a tribunal will side with the employee. Sometimes it will side with the employer. The easiest thing to do is assume that there is a right to privacy, adopt the reasonableness standards adopted by the pro-privacy adjudicators and privacy commissioners, and fight it out only if you need to.