My accounting professor used to say the mirrors and security cameras in stores were to monitor the employees more than the customers.
The threat model in the two areas is a bit different, so different tactics are used. It doesn't mean that some people are trusted more than others, just that as groups they behave differently.
Is this legal?
Sounds like a lawsuit waiting to happen.
Like you can record corridors and such, but you can't record him programming at his desk.
With that prior police authorisation it's legal to record more or less anywhere without those recorded knowing.
The police knowing you were authorised means when Sandra finds a camera in the employee locker room and freaks out, the cops who attend can verify that yes, Sandra's manager's boss got that OK'd two weeks ago when six £700 graphics cards "vanished" versus no this is some camera planted by an unknown creep and if the cops figure out who it was they'll be arrested.
If the "unknown creep" turns out to be the boss, the existence of this authorisation mechanism means they have no excuse - if they'd asked "Hey, can I secretly film my employees to get evidence of theft?" the answer would be "First, go to a police station to get guidance" not "Sure, act exactly like a pervert and just hide a camera".