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October 2016 Corporate & Commercial > Data Security >
Advertising & Marketing > Employment >
Corporate & Commercial Electronic Signatures and Trust Services The Department for Business, Energy and Industrial Strategy (BEIS) has published new guidance on what electronic signatures are; how to use them; and the role of trust services. In particular, the guidance sets out how the UK’s Trust-Service Status List should be checked and authenticated. The guidance can be found on the government’s website.
Corporate law: guidance on the confirmation statement published On the 30th June this year the Small Business, Enterprise and Employment Act 2015 (SBEE) replaced the requirement to file an annual return with a new duty to submit a confirmation statement. Companies House has now published a guide on how to complete the confirmation statement covering: •
People with significant control
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Share capital
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Company registers
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Legacy filings (annual return)
•
The PROOF scheme
The SBEE on corporate directors Another key part of the SBEE and part of the government’s transparency agenda has been a provision to prohibit the appointment of corporate directors, subject to some limited exemptions. This provision was due to be implemented from the
Competition >
1st October, but a new notice has been put on the government’s website to say that this provision is delayed and to “watch this space” for updates.
Duty to report on Payment Practices due in April 2017 We have previously reported on section 3 of the SBEE which allows the Secretary of State to require large companies to report on their payment practices including average payment days, payment terms and availability of e-invoicing. BEIS has now confirmed that this duty is expected to come into force on the 6th April 2017, applying to financial years starting from that date onwards.
The right to affirm in the face of repudiatory breach The case of MSC Mediterranean Shipping Co SA v Cottonex Anstalt considered a party’s rights when a contract has become frustrated. In this case, MSC agreed to ship 35 containers of Cottonex’s cotton to Bangladesh. Due to a dispute with the port authorities, it was not possible to return the containers to MSC as required by the contract. Instead of terminating the contract and claiming damages, MSC sought to continue with the contract and apply continuing daily charges (demurrage charges). The Court of Appeal determined that the dispute with the port authorities meant that it was no longer possible for Cottonex to comply with its obligation to return the containers and accordingly the contract was frustrated. In such circumstances where an innocent party, such as MSC in this case, has no legitimate interest in continuing with the contract and damages would be an adequate remedy then it is not possible for that party to continue with the contract as MSC had sought to do here. Whilst the facts of this case are unusual, the same principles could be applied to more common situations particularly cases where a party seeks to keep a contract alive solely for the purpose of claiming liquidated damages. 1
BEIS Committee inquiry into corporate governance On the 16th September, the BEIS Committee launched its inquiry into corporate governance. The inquiry focuses on some difficult issues including: •
hether the duty of a company’s directors to promote its W long-term success is clear and enforceable;
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ow remuneration should reflect the value added by H executives relative to more junior employees;
•
hether there is evidence that executive pay it too high and, if W so, what should be done to keep it under control; and
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he composition of Boards, whether there is sufficient T diversity and whether we should consider a European-style worker representation on boards.
Perhaps the most interesting point about this inquiry is that it shows the personal style that Theresa May intends to stamp on her premiership. The BEIS Committee has requested submissions by the 26th October.
the matter within the 24 hours of being notified by the customer because it was conducting its own investigation to establish whether a data breach had in fact occurred. We think this is an interesting case as it gives an insight into ICO’s views about reporting data breaches that will be applicable across all business sectors in less than two years when the General Data Protection Regulation is implemented and fines will be significantly higher than the £1,000 in this case.
Advertising & Marketing Updated guidance on promotional marketing The Committee on Advertising Practice has updated its guidance on promotional marketing, specifically around product availability.
Data Security
This follows changes made to the CAP Code in 2015 that stated promoters must show they are capable of meeting the expected response or that consumers were given appropriate information regarding availability to decide whether to participate. Stating “subject to availability” is unlikely to be sufficient.
Employers handling of a subject access request The case of McWilliams v Citibank concerned an employee who made a subject access request (SAR) to obtain information relevant to the disciplinary proceedings. The employer did not respond to the SAR presumably relying on previous authority that a SAR will not be enforced where it is intended to elicit information to further the requester’s position in existing or prospective litigation.The tribunal, however, decided that the employer’s refusal to respond to the employee’s SAR was unfair and materially affected her ability to defend her actions. Whilst this decision does appear to conflict with previous judgments, it is in line with the ICO’s guidance that states that even if a data controller believes a SAR is made for an improper purpose, it does not relieve the employer of its obligation to respond.
TalkTalk loses appeal against £1,000 ICO penalty TalkTalk has lost its appeal against a £1,000 penalty imposed against it for failing to promptly report a data breach. Current requirements under e-Privacy rules require electronic communication service providers to report personal data breaches to national regulators within 24 hours of detecting the breach where it is feasible for them to do so. It is understood that TalkTalk argued it had not reported
Employment Client must remain the same for a service provision change The recent EAT decision in CT Plus (Yorkshire) CIC v Black has confirmed that in order for a service provision change TUPE transfer to take place, it is essential that the client before the service change remains the same afterwards. In this case, a council subsidised a community interest company (CIC) to provide a bus service from a council-owned car park to the city centre. Another company started a similar service for the same route but without any council subsidy and for its own commercial purposes. The council then terminated its agreement with the CIC and the employees claimed that their employment should transfer under TUPE to the new bus company. The EAT, however, stated that there was no TUPE transfer because the council was no longer the client of the new bus company. 2
Pay protection for disabled employees
Competition
An employer must make reasonable adjustments for a disabled employee if there is a provision, criterion or practice that places the disabled person at a substantial disadvantage compared to those who are not disabled. The recent Employment Appeal Tribunal case of G4S Cash Solutions v Powell has confirmed for the first time that the reasonable adjustment may include pay protection. This does not necessarily mean that this will be applicable to all cases and the facts of this case are slightly unusual. In this case, Mr Powell had been given a lesser role as a result of his disability and he had been doing that role for a year before G4S proposed a pay reduction for it. There did not seem to be any reasonable justification for reducing the pay and the cost was certainly not an issue given that G4S is a large company. The decision does, however, send a clear message that in the view of the EAT pay protection is similar to any other reasonable step to protect the employment of disabled employees.
European Commission’s Preliminary Report on the E-commerce Sector Inquiry On the 15th September, the European Commission published its Preliminary Report on the E-commerce Sector Inquiry. This inquiry is a result of recognition that the European Commission will not achieve its aim of putting Europe at the front of the digital economy unless it has effective laws to combat the barriers that limit cross-border trade. The preliminary report addresses a number of points: •
rice transparency – whilst it is believed that price P transparency has intensified price competition, there is a concern that price transparency could damage competition if it facilitates collusion between retailers;
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ree-riding – the concerns of manufacturers and retailers that F customers free-ride the pre-sales services of the bricks and mortar stores and buy from the on-line retailers;
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ontract restrictions – the fact that most manufacturers C obligate their retailers to have some bricks and mortar stores and apply other online sales restrictions that may not be lawful;
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hat some powerful retailers are obligating the manufacturers T to guarantee margins; and
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eo-blocking – the report notes the Commission is already G investigating geo-blocking – the use of technology to prevent a person from accessing an online service based on the country in which the person is based.
Final warnings The recent case of Trye v UK Mission Enterprise Ltd has confirmed previous case law that providing an employer is acting reasonably it is entitled to treat misconduct and prior final warnings as a sufficient reason to dismiss even where the conduct and the final warning relate to different issues. The EAT stated that if there is a final warning that is current, it is only in exceptional circumstances that further misconduct will not be met with dismissal, regardless of whether that further conduct appeared to be serious enough in itself to warrant dismissal. The EAT added that even an expired final warning can be relevant to whether a dismissal is reasonable.
Byron burger chain staff arrested in immigration raids It has been reported that Byron Hamburgers has been hit with angry protests by some members of the public for cooperating with the Home Office in the arrests of 35 employees for immigration offences. It’s understood that the employees were invited to an unrelated meeting when the officers arrived to make the arrests. Byron Hamburgers has released a statement noting that it carries out rigorous right to work checks but had been notified by the Home Office that a number of its workers had used sophisticated counterfeit documentation.
The publication of the Report starts a two-month public consultation. During this period, stakeholders may comment on the Report and the Commission is expected to publish a Final Report in the first quarter of 2017.
We have previously reported that fines for employing illegal workers can be up to £20,000 per employee and can include criminal sanctions for directors. This case again demonstrates the importance of thorough checks. We recommend that employers use dedicated online checking systems to authenticate ID documents rather than merely relying on visual inspections.
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