Would I be correct to say that some laws had been broken in the case of the OP ?
In any civilised "western" country, the likely answer is yes.
(although there could be further questions to ask you first, such as whether you consented to more in-depth monitoring by signing paperwork etc.).
nobody should have the ability to look over someone's shoulder literally and figuratively without court orders. Or am I being naiive
No, you are not being naive.
System administrators have a lot of power, and are in a great position of trust, and it's an unwritten law of IT (sort of unwritten Hippocratic Oath) that such power shall not be abused.
Obviously there are genuine reasons why power is needed. This is generally either to comply with legislation (i.e. if the Police come with a warrant and request certain communications to be intercepted). It is also needed for genuine diagnostic purposes.
However, infringing on someone's privacy, without their consent (Police warrant excluded), is a big no-no. And should really be discreetly reported where possible to someone more senior (or HR department if a big enough organisation).