They’ve probably got little right to a private conversation, especially of that nature, in work time and in work offices though. Racism is crime, and so could be sexism (I think), especially if others could take offence and nobody could guarantee their “mates” wouldn’t take offence.
As for the bugging of private conversations, I’m not that fussed, no matter where it is, even in private places. If people are suspected of committing crimes, inciting hate then they deserve everything they get.
For me, I would even go one further, but a lot wouldn’t. I would prefer it if everyone was tracked, had an i.d card and had e-mails and texts scanned. I think it would cut down crime and hate, and the intrusion would be next to nothing for law abiding and good people.