Snooping powers have been exercised hundreds of times by Lancashire County Council over the last five years.
Cleaners who repeatedly failed to show up for work, and a care assistant who claimed too much on travel expenses, were among those caught through surveillance under the Regulation of Investigatory Powers Act (RIPA).
A person in Chorley thought to be selling counterfeit goods via eBay, people pursuing false personal injury claims, and a retailer selling furniture not up to fire safety standards were also among those investigated using powers granted under the Act.
A Freedom of Information request by the Lancashire Evening Post revealed that the council has used RIPA powers on 302 occasions since 2004.
The Act permits local authorities to request phone records or monitor people if it is deemed necessary in the interests of national security or public safety.
Mark Jewell, Liberal Democrat councillor for Preston North West ward, said: "We have promoted telephone tapping for suspected serious and terrorist offences.
"However, the use of RIPA powers should be curtailed for local authorities.
"For example, it is not acceptable for authorities to spy on their own cleaners – as the county council did in 2007 – when good management practice could have dealt with the problem."
Most of the requests that LCC made for phone records under RIPA were to investigate suspected rogue doorstep callers or car traders believed to have sold unroadworthy vehicles.
Sixteen allegations of people selling pornographic videos were also looked into using powers under the Act.
And a bus shelter in Lancaster which had been repeatedly vandalised was kept under surveillance and culprits were arrested as a result.
Jim Potts, chief trading standards officer at LCC, said: "We use surveillance only when absolutely necessary to prevent crime.
"For example, we have used them to gather evidence on doorstop salesmen who use intimidating sales techniques, and people who sell counterfeit goods.
"We certainly do not routinely monitor employees in this way or use technology such as covert cameras.
"We have simply recorded that a member of staff has seen another member of staff do something at work, in the way that managers can and do every day."
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