> And I can also see there being some need to monitor internal chat in case it's used for unacceptable purposes such as sexual harassment.

You don't want simple monitoring. You want data stored in a way it can be checked after a complaint has been filed but only then. Encrypt it with something which requires one or multiple keys so random IT people don't have access to it. Log every access so an audit can be done.

Treat it like medical data should be treated.