New technology could allow employees to be tracked by their bosses at any time and place during the working day.
The tracking device can be fitted into a standard mobile phone
Scottish company Trisent have developed a tracking device which can be installed in a standard mobile phone.
Trisent said a code of practice would protect workers' privacy, as the person with the phone would be "fully aware" that their location could be tracked.
However, public sector union Unison said the devices could damage trust and confidence between employers and staff.
A spokesman for Unison in Scotland said: "There are a large range of adverse impacts of this sort of technology including damage to staff's privacy and to the trust and confidence between staff and employer, whether proposals are demeaning to staff and who has access to the information."
Trisent said a test launch had been successful and that it had many applications for the new technology.
The company said existing tracking alternatives, which include the global satellite positioning system (GPS), were limited and "uneconomical for most businesses".
"Until now, tracking the location of people and vehicles has been an expensive, slow and inaccurate business," said Dr Gordon Povey, Trisent's founder and managing director.
"Trisent's system works passively on everyday mobile phones, so it's always-on, is affordable, and works anywhere in the UK that has mobile coverage."
The new technology would mean an individual, rather than a vehicle, being tracked.
The system is always aware of the phone location, and when the person moves, it updates the location automatically and keeps a record of where they were at any time.
The new services are mainly being targeted at business users who need to locate their employees in real-time.
The company said the technology could be used by a health authority that wanted to locate lone workers in the event of an emergency.
Trisent claimed that the UK market is worth more than £120m, with about half a million phones being located regularly and 200,000 vehicles being tracked by GPS.
Unison has raised concerns over the invasion of staff privacy.
A spokesman said: "As the company indicates, there is a code of practice on monitoring at work, and any employer employing covert surveillance is likely to be breaching the law.
"We advise our representatives and branches to negotiate agreements covering the whole range of privacy-related monitoring and stress the need for employers to adhere to the law and only use techniques like this when absolutely needed, with the free consent of the worker and with the appropriate safeguards."
However Trisent insisted employers would not be able to secretly track their workers because the phone "informed" individuals that the tracking device had been enabled.