Monitoring employees is generally prohibited.
An employer must not monitor employees to an extent not necessary by its duties. That means for instance that the employer cannot monitor the internet pages someone visits, even when he's using a company computer. The employer might set up rules on internet usage (e.g. that private browsing during work hours is not allowed or that certain pages are not to be visited), but supervision of this cannot be done using automated tools but instead must be based on the social level or on trust (e.g. if every time the boss walks past one's desk some youtube clip is being played, he may ask for an explanation).
I know from an employer who once tried to install a firewall that was capable of acting as an SSL proxy, deciphering all traffic for "security reasons". Even though they assured the measure was for network security only, they had to shut it down again after being pointed at the relevant law.
This does not mean that employeremployee surveillance is generally prohibitednever allowed, but there must be a business reason for that. And just "safety reasons" is not enough, neither is a general suspicion against all employees.
Here's more information on this. (german)