Commercial news vlog - January 2020

Commercial news vlog - January 2020

 

In association with Iain Larkins from Radius Law, we discuss:

  • Cryptoassets and smart contracts

  • IR35

  • Ethical veganism

  • Bribery and corruption

We focus on the commercial aspects and look at the practical steps for you to consider.

Corporate & Commercial

Cryptoassets and smart contracts

The UK Jurisdiction Taskforce of the LawTech Delivery Panel (which is made up of representatives of barristers, solicitors, the judiciary, the FCA and the Law Commission) issued a statement in November that cryptoassets can be treated, in principle, as property and that smart contracts are capable of being contracts under English law. Whilst the statement has been referred to as a watershed moment for English law, it noted that new legislation will be required to determine how the governing law will be decided and that there are likely to be difficulties identifying the owner of cryptoassets in systems where transactions take place using anonymous addresses.  For smart contracts, there are also unresolved issues including whether coding experts will be needed to explain the intention of the contract and who will bear the risk of coding mistakes.

See LNB News: Cryptoassets to be treated as property, LawTech Delivery Panel statement concludes

Data security

Data transfers

The most common ways to lawfully transfer personal data outside of the EEA is to use standard (European Commission approved) contractual clauses (SCCs) or the Privacy Shield for transfers to the U.S.  The Privacy Shield is a self-certification procedure where organisations commit to certain data protection standards.  The lawfulness of both systems has been challenged but the EU’s Advocate General has, surprisingly, validated SCCs as still being lawful but emphasised that this is conditional on the recipient country having a right of action against the organisation that controls the data and the laws of that country not conflicting with the SCCs.  At the same time the Advocate General expressed doubts about the Privacy Shield’s conformity with European data protection laws. The Advocate General’s opinion is not binding but usually the Court of Justice follows the opinion. The full judgment is likely to come out in the first half of this year.

See LexisPSL News Analysis: Advocate General opines EU standard contractual clauses are valid (Data Protection Commissioner v Facebook Ireland Limited, Maximillian Schrems)

New guidance

The UK Information Commissioner’s Office: has issued new guidance to organisations on how to comply with data protection law when processing ‘special category data’ – that’s data that concerns, amongst other things, health and political opinions; and has updated its guidance on responding to subject access requests – particularly for dealing with ‘manifestly unfounded or excessive requests’.

Employment

TUPE may protect workers!

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provide protection and rights to ‘employees’ who work for a business or on a contract that is transferred to another organisation. The London Central Employment Tribunal has now widened the protection to also include ‘workers’.  Worker status is a ‘half-way house’ between employee and self-employed status and is commonly referred to as a contractor.  The TUPE rights include making the new employer liable for employment breaches of the previous employer – a costly issue in this case as the previous employer had not paid holiday pay.

See LexisPSL News Analysis: TUPE 2006 applies to all workers, not just traditional employees (Dewhurst v (1) Revisecatch Ltd t/a Ecourier (2) City Sprint (UK))

IR35 news – new CEST tool

The HMRC has updated the Check Employment Status for Tax (CEST) tool and added a new section to the Employment Status Manual, which provides guidance on the new tool.

The CEST tool is designed to help individuals and organisations decide if a worker should be treated as employed for income tax and NICs purposes. It has been updated to take into account the changes to IR35, which are due to come into effect on the 6 April. Under the new rules, medium to large sector employers in the private sector will become responsible for deciding the employment status of some contractors and may be liable to pay the income tax and NICs of those contractors.

For further information on IR35, see Practice Note: IR35—off-payroll workers

Veganism

Ethical veganism has been held to be a ‘philosophical belief’ and protected in law, a Tribunal has ruled for the first time . Considering this ruling, we recommend employers consider reviewing how they support ethical vegans in their company (e.g. offering vegan options in any staff canteen or business lunches).

Whistleblowing

Whistle-blowers are, subject to some conditions, protected from unfair treatment. Two recent cases have clarified the law in this area.

The Court of Appeal case of Ibrahim v HCA International Limited concerned the condition that the disclosure must be in the public interest to afford the whistle-blower protection.  The Court of Appeal overturning earlier decisions has sent a reminder that the public interest condition has a low threshold.  The whistle-blower only needs to show that he or she reasonably believed at the time of making a disclosure that it was in the public interest and criticised the tribunal in this case for not asking the unrepresented Mr Ibrahim whether, at the time of his disclosures, he believed he was acting in the public interest.  The case has now been remitted to the tribunal.

See Case: Ibrahim v HCA International Ltd

Separately, in the Supreme Court case of Royal Mail Group v Jhuti, it has been ruled that the 'true reason’ for a dismissal must be identified and an organisation cannot escape liability simply because a dismissal was finally determined by someone who did not have knowledge of the whistle-blowing disclosure. In this case the decision to dismiss had been made by such an independent decision maker who did not have knowledge of the disclosure but who had been provided false information concocted by Ms Juhti’s line manager following a disclosure which was not well received by him.

See News Analysis: Supreme Court looks behind employer’s stated reason for dismissal (Royal Mail v Jhuti)

Covert Surveillance

The European Court of Human Rights overturning an earlier decision has held that there had not been any violation of the European Convention on Human Rights by a Spanish supermarket that installed covert video surveillance where there was a high level of theft.

This decision is not however a green light for employers to carry out as much covert surveillance as they wish. It’s important to note that in this case that the monitoring was limited to an area in a public space and was only carried out for a limited and specific period of time.

See News Analysis: Hidden CCTV to investigate suspicions of serious theft did not breach employees’ right to privacy (López Ribalda and others v Spain)

Holiday entitlement

European Law provides all workers a statutory 4-week annual holiday entitlement.  Some member states have extended the annual statutory holiday entitlement.  In Great Britain it’s 5.6 weeks.

There has been confusion about whether an employee who, due to sickness absence, has not been able to take his or her statutory holiday is only entitled to carry over the 4-week holiday granted by European Law or whether he or she will also be entitled to carry over the additional statutory holiday granted by local law. The European Court of Justice has now confirmed that employers are only required to permit four weeks carry-over.

See News Analysis: ECJ: carrying over of holiday above the minimum four weeks may be restricted (TSN v (1) Hyvinvointialan liitto ry (2) Fimlab Laboratoriot Oy)

Right of substitution

The spate of gig economy cases have usually centred on the employer trying to prove that a person engaged by it is a free-lance contractor rather than a worker.  A critical question in these debates is whether the person has the right to substitute his or her duties to another person.

In a recent Employment Appeal Tribunal (EAT) case the claimant was a delivery courier who undertook fixed time slots for the employer. During the fixed slot, the claimant was confined to his agreed operation zone and undertook deliveries that were offered to him via an app for an agreed hourly wage. He was not allowed to work for another delivery company during this time and was mandated to complete the slot unless another courier agreed to accept the slot.  The EAT ruled that due to the restrictive nature of the right of substitution he was a worker and therefore entitled to certain employment law rights including minimum pay and statutory holiday.

See News Analysis: Worker status: right to release shift into approved pool is not a right of substitution (Stuart Delivery Ltd v Augustine)

Display Screen equipment advice

The Health and Safety Executive has issued advice to employers whose workers use display screen equipment such as laptops, computers, smartphones and tablets.  In order to comply, employers must conduct a workstation assessment, provide training and information for workers, provide an eye test if requested, and ensure workers take regular breaks from such work. 

Competition

CMA interim report into online platforms and digital advertising

In December the Competition and Markets Authority published its interim report into online platforms and digital advertising. The report raises concerns that these markets distort competition.  The concerns are mostly pointed at Facebook and Google and include some proposed changes - particularly that consumers should have the option to use the platforms without having to have their data used for personalised advertising.  Responses to the consultation are sought by 12 February 2020. The final report to the consultation is due in the summer.

See LNB News: CMA market study: CMA consults on interim report in online platforms and digital advertising market study

Bribery & Corruption

SFO Cooperation Guidance

The Serious Fraud Office published its Corporate Cooperation Guidance. The guidance provides a framework for how an investigation should be conducted. Under the Code for Crown Prosecutors in England a company (or individual) should only be prosecuted if the evidence provides a realistic prospect of conviction, and it would be in the public interest to prosecute. If the company conducts a genuinely proactive approach when the offending is brought to its notice, including self-reporting and remedial actions and compensation of victims – then a prosecution is less likely.

See News Analysis: SFO’s co-operation guidance feels like a missed opportunity

 

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About the author:

Louisa leads marketing for the in-house legal community at LexisNexis. She joined the dedicated in-house team at LexisNexis four years ago and has a passion for driving and facilitating initiatives which are customer-focused at their heart. Her vision is to support in-house counsel succeed in their fast-evolving role based on deep insight, data analysis and best practice gathered across the in-house community.

Prior to her in-house focused role, Louisa led the marketing for the bar and mid-market private practice sectors as well as product marketing lead for LexisPSL - LexisNexis' cloud based, practical guidance and legal research software solution.

She brings 20 years' marketing experience both client and agency side, specialising in B2B marketing in the Legal, TMT (Telco, Media and Technology) and Financial Services industries. In both South Africa, Europe and the UK.

Louisa is also an active member on the LexisNexis Gender Equality Matters (GEM) steering committee and is involved with the Families at LexisNexis Group which brings together, supports and lobbies for change those with an interest in balancing the challenges of work and family.