Is such a system deemed free of the various data protection/integrity laws in the various countries/jurisdictions?
Yes, as long as the use of the system is included in employee contracts and the controlling / logging PC software is password protected. It would then be under the same exceptions as having employee data in such as a payroll database.
In EU / UK data protection law, It would be covered under any of these legal categories:
"Consent",
"Contract" and
"Legitimate interest".
Home or personal use on your own equipment is generally outside the legal framework.
A centralised server is a very different matter, as it means the operator storing personal data for all the customers that use the system, and storing any other data they enter, on their behalf.
For such as a web site / forum (as with Nigel's reference to ETO), the system fundamentally
cannot function without user access, so the "Consent" and "Public task" exceptions apply, as long as the user registration form requires agreement and explicit consent, and the user database is properly encrypted and secured; any data leaks can still result in massive fines.
But using a central server and requiring customers to create accounts and store login information to use a product that has no fundamental requirement to have a central server is illegal, at least under EU / UK law:
- Most lawful bases require that processing is ‘necessary’ for a specific purpose. If you can reasonably achieve the same purpose without the processing, you won’t have a lawful basis.
Many other countries either already have or are in the process of introducing similar data protection laws, so there is no way anyone should consider any storage of customer data unless there are zero other options.