Commercial news update March 2019: New Trade Mark law, equal pay, holiday and influencer marketing

 

 

We bring you updates across Brexit, Corporate & Commercial, Data Security, Advertising & Marketing, Employment, Consumer law - in association with Iain Larkins from Radius Law.

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

This month, we cover the following.

Brexit Watch

No-deal risks

A no-deal Brexit will impose tariffs for goods and services passing between the EU and the UK. It’s also likely to mean that goods take longer and cost more to deliver. We recommend relevant contracts are reviewed to understand which party bears these obligations. Unless the contract states otherwise the customer will usually have the responsibility to pay tariffs.

Turn uncertainty to your advantage

The LexisNexis Brexit guide created for in-house lawyers identifies five key priorities for Brexit risk management, to support you to prepare your organisation for inevitable change. 

Action lists detailed for each priority empower you to create practical strategies and record your organisation’s level of compliance – all written by experts and based on thorough market insight.

 This is part of our comprehensive Brexit content to support in-house lawyers including:

-       Brexit toolkit including practical guidance, checklists and flowcharts

-       Brexit alerts, news analysis, legal updates and expert Q&A

-       Legislation tracker, Brexit timeline and horizon scanners

-       Dedicated practice area Brexit updates

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Corporate and Commercial

Agreement to agree?

The Supreme Court recently considered a dispute between Mr Wells and Mr Devani. Wells had instructed Devani to sell some flats, but later refused to pay his invoice stating there was no contract because it had not been agreed when commission would be payable. Devani argued that the payment date should be implied into the contract. The first court and the Court of Appeal had opposing views on the topic, but the Supreme Court ruled that implied terms were irrelevant here. A contract can be formed by words and conduct: it was clear that by the words and conduct that the parties had agreed the commission would be paid on the completion of the sale.

For further guidance see:

-       Forming enforceable contracts – intention to create legal relations

-       Forming enforceable contracts—the court's general approach

-       Contract interpretation—terms implied by fact

-       2019: Corporate case tracker

-       Wells v Devani [2019] UKSC 4

Shareholder settlement agreement – did not discharge a non-compete

Another recent case is a cautionary tale about the risks of overlooking detailed points.

An employee shareholder wrongly assumed that a settlement agreement with his employer stating that neither party had any further obligations to each other would release him from his noncompete obligations.

Unfortunately for him the non-compete obligations were owed to his employer company and its group companies whereas the settlement agreement only bound him and his employer company.

For further guidance see:

-       Ideal Standard International v Anthony Herbert [2018] EWHC 3326 (Comm)

Data Security

EU and Japan data adequacy – the world’s largest area of safe data flows.

On 23 January 2019, the European Commission adopted an adequacy decision in relation to Japan. As a result, personal data may flow safely from the EU to Japan, without being subject to any further safeguards. This decision came just days before the EU-Japan Economic Partnership Agreement.

For further guidance see:

-       International transfers of personal data—adequacy decisions—tracker

-       Data sharing and transactions—overview

Advertising and Marketing

Influencer marketing

Following the Competition Markets Authority (CMA) clamp down on ‘influencers’ endorsing products without disclosing they have been paid, the CMA has issued new guidance in addition to the guidance published jointly with the Advertising Standards Authority on this topic. The guidance is not rocket science and providing the advert is honest and transparent then it is likely to be compliant.

For further guidance see:

-       Influencing the Influencer—how to be #CMAcompliant

-       Digital and social—overview

No more Big Macs

One of the biggest shock decisions was the recent revocation of McDonald’s European trade mark for Big Mac. Despite evidence that the mark was well known, McDonald’s was not able to provide evidence of use that complied with the EU’s Intellectual Property Office’s detailed rules. Whilst doubtless there will be an appeal, it’s a stark warning that all brand owners must use trademarks or risk losing them.

For further guidance see:

-       Big Mac trade mark action—they’re not lovin’ it (Supermac’s (Holdings) Ltd v McDonald’s International Property Company Limited.)

New Trade Mark Law

In January the Trade Marks Directive came into force amending existing Trade Mark law. The changes provide more freedom for businesses about what they can register as trademarks but could make it more difficult for trade mark owners to stop similar, later-registered trademarks. The government has produced guidance on the new laws.

For further guidance see:

-       Trade Mark Directive 2015—next steps towards implementation

Employment

Gig economy & the Good Work Plan

The so-called gig economy i.e. a labour market of short-term or freelance staff continues to dominate employment law news. Most of the cases in this area have found that the staff have been wrongly classified as independent contractors, when they should have been classified as workers with minimum wage and holiday pay protection. The recent Court of Appeal decision in the Uber case and the Addison Lee Employment Appeal Tribunal have been decided in the same way.

Meanwhile Hermes and the GMB union have found a creative solution where staff have been offered a new ‘self-employed plus’ status with at least, £8.55 p/h and 28 days holiday. The new status is optional and those who wish to remain on existing arrangements with the ability to earn premium pay, but without the new entitlements may continue to do so. The Government in response mostly to issues arising from the Gig Economy has published its Good Work Plan – which is a package of proposed reforms. There are some legislative changes already in progress – mostly for April 2020 which are included in our In-house Regulatory Tracker. There’s no sign yet however of how the government will tackle the more complex issue of stopping businesses misclassifying their staff.

For further guidance see:

-       Private hire drivers were workers and not self-employed (Addison Lee v Lange, Morahan and Olszewski)

-       Government’s Good Work Plan to take forward Taylor Review recommendations

-       Addison Lee v Lange and ors (UKEAT/0037/18/BA)

-       Practice Note: Employee Status

-       Practice Note: Worker Status

Police force discriminated against white heterosexual male

Whilst it may be admirable that some employers are taking positive steps to redress underrepresentation in their workplace, it should only be applied in a tiebreak situation i.e. between candidates who are equally well qualified for a role. A recent tribunal decision ruled that a Police Authority had breached this principle.

For further guidance see:

-       Employer takes diversity aim a step too far (Furlong v The Chief Constable of Cheshire Police)

-       Furlong v The Chief Constable of Cheshire Police, 13 February 2019, Case No. 2405577/18

Equal Pay

The large supermarkets have pending equal pay claims concerning whether the mostly female store staff should have equal pay to the mostly male distribution centre workers. The Court of Appeal in the Asda case has decided that the groups are comparable because the employer observed broadly common terms of employment. Aside from possible appeals it must still be decided whether the work is equal and whether the difference in pay constitutes unlawful sex discrimination.

For further guidance see:

-       Supermarket and distribution depot employees may be equal pay comparators: confirmed (Asda Stores v Brierley)

-       Practice Note: Equality of terms: equal work and comparators

Carrying over holiday

Two recent European Court of Justice decisions have held that employers should actively encourage workers to take their leave and inform them, in good time, that the leave will be lost if it is not taken. If the employment terminates and the employer cannot show that they have taken these actions, the right to payment in lieu must include the total accrued but untaken entitlement.

For further guidance see:

-       Holiday pay entitlement can only expire if worker given sufficient information and opportunity to take paid leave (Max-Planck Gesellschaft zur Förderung der Wissenschaften v Shimizu; Kreuziger v Land Berlin)

-       Practice Note: Holiday

-       Max-Planck Gesellschaft zur Förderung der Wissenschaften v Shimizu C-684/16

-       Kreuziger v Land Berlin C-619/16

New guidance issued

The Government Equalities Office published two sets of guidance to help employers close their gender pay gaps.

ACAS has issued new guidance to help prevent age discrimination. This followed a recent tribunal case where an 86-year old secretary was dismissed for capability reasons. The case provides a good lesson on how not to handle age related matters. The employer’s errors included deciding, without any discussion, that training would not be helpful because she was ‘stuck in old secretarial ways’ and that the decision letter did not specifically exclude discriminatory comments that had been made in the course of the investigation.

The Home Office has also updated its Code of Practice on Preventing Illegal Working.

Consumer

Hotel booking

Following a Competition and Markets Authority (‘CMA’) investigation, several hotel booking websites have now undertaken to change their practices to ensure compliance with consumer laws. The changes include:

  • making it clearer how hotels are ranked including whether it’s affected by commission;
  • not giving false impressions on hotel availability;
  • not making comparisons with deals that are not available;
  • displaying all compulsory charges such as taxes in the headline pric

For further guidance see:

CMA publishes guidance for online hotel booking companies

Super complaint

At the end last year, the Competition and Markets Authority (CMA) announced the publication of its response to the super-complaint it received from Citizens Advice. This concerned the issue that loyal customers may pay higher prices than those who actively shop around and switch. The CMA has stated that it will seek changes in the law if practices are not changed. These include:

  • it should be as easy to exit a contract as it is to enter it;
  • auto-renewals should generally be on an “opt-in” basis;
  • exit fees should not be applied after any initial minimum term;
  • auto-renewals should generally not lead to a fresh fixed term;
  • customers must be sufficiently informed about the renewal and any price changes in good 
  • time; and
  • switching should generally be managed by the supplier who is winning the consumer.
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