Microsoft is developing Big Brother-style software capable of remotely monitoring a worker's productivity, physical well-being and competence.
The Times has seen a patent application filed by the company for a computer system that links workers to their computers via wireless sensors that measure their metabolisms.
The system would allow managers to monitor employees' performance by measuring their heart rates, body temperatures, movements, facial expressions and blood pressure.
Labor unions said they fear that employees could be dismissed on the basis of a computer's assessment of their physiological state.
Technology allowing constant monitoring of workers was previously limited to pilots, firefighters and NASA astronauts. This is believed to be the first time a company has proposed developing such software for mainstream workplaces.
Microsoft submitted a patent application in the U.S. for a "unique monitoring system" that could link workers to their computers.
Wireless sensors could read "heart rate, galvanic skin response, EMG, brain signals, respiration rate, body temperature, movement facial movements, facial expressions and blood pressure," the application states.
The system could also "automatically detect frustration or stress in the user" and "offer and provide assistance accordingly."
Physical changes to an employee would be matched to an individual psychological profile based on a worker's weight, age and health.
If the system picked up an increase in heart rate or facial expressions suggestive of stress or frustration, it would tell management that he needed help.
Britain's Information Commissioner, civil-liberties groups and privacy lawyers strongly criticized the potential of the system for "taking the idea of monitoring people at work to a new level."
"This system involves intrusion into every single aspect of the lives of the employees," Hugh Tomlinson, an expert on data protection law at the London law firm Matrix Chambers, said. "It raises very serious privacy issues."
The U.S. Patent Office confirmed Tuesday that the application had been published last month, 18 months after being filed. Patent lawyers said that it could be granted within a year.
"This system takes the idea of monitoring people at work to a new level with a new level of invasiveness but in a very old-fashioned way because it monitors what is going in rather than the results," said Peter Skyte, a national officer for the British union Unite.
Britain's Information Commissioner's Office, a governmental agency that reports directly to Parliament, was no less alarmed.
"Imposing this level of intrusion on employees could only be justified in exceptional circumstances," a spokesman said.
Microsoft refused to comment on the application.
"We have over 7,000 patents worldwide and we are proud of the quality of these patents and the innovations they represent," a spokesman said. "As a general practice, we do not typically comment on pending patent applications because claims made in the application may be modified through the approval process."