Do Employees Who Have Access To The Company E-mail Expect Privacy and
what are the ethical issues?

I would say it depends on the company.  For example I work as a system
administrator for a university, and the university email policy
states:

"Business and Finance Bulletin RMP-8, Legal Requirements on Privacy of
and Access to Information, prohibits University employees and others
from "seeking out, using, or disclosing" without authorization
"personal or confidential" information, and requires employees to take
necessary precautions to protect the confidentiality of personal or
confidential information encountered in the performance of their
duties or otherwise. This prohibition applies to email records. In
this Policy the terms "inspect, monitor, or disclose" are used within
the meaning of "seek, use, or disclose" as defined in RMP-8."

This above meaning that an employee of the university does have some
expectation of privacy.  However the policy also acknowledges that
network and system administrators have access to and may read employee
email during the course of the duties (this is true).

Other companies monitor all email transmissions stating that they own
the equipment, pay for the bandwidth, and pay for the time the
employee has access to the system.

I believe both scenarios are fair, just as long as the company is up
front about it.  All companies should have a defined email policy
which states what the company does with email and what expectations of
privacy the employees have.

I would say the only real ethical issue would be a company saying they
didn't monitor email, and then doing so secretly.

INHO, if the business owns the equipement, then the business has a
legitimate right to monitor to any extent any use of its equipment.
So, No - the user should have zero expectation of privacy. However, I
think the ethical obligations are:

1. The business be honest and clear about its policy on using business
equipment for personal use.
2. The business not release the contents of any personal email to
anyone other than when/where required by law, and only then to the
appropriate authorities.
3. The end-user understand that this is not their personal equipment
and thus, should keep to a minimum the personal use of such equipment.
4. The end-user not use the equipment for anything illegal or unethical.

I wonder why in the world a person would be doing anything on the
company computers that is so personal they wouldn't want to world to
know? Keep in mind that many businesses backup their systems.
Sometimes backups are made to many different locations, thus
increasing the number of instances of this personal stuff. If it's
anything that a person is interested in keeping secret:
1. Do it at home on your own machine.
2. Don't ever expect privacy, even at home. The Internet is not the
Privacy Eutopia people seem to think it is.

Whether or not your employer reads your email should be the least of
your concerns. I'd be concerned about the ethics involved in all those
snooping the Internet who I don't know are there doing so.

JtB()