The UK’s data protection regulator (the ICO) has announced that it intends to impose a fine of £500,0000 on Facebook for its role in the Cambridge Analytica scandal*. With the recent coverage of the GDPR and the increased fines of up to €20 million or 4% of global annual turnover for the most serious breaches, £500k may seem surprisingly low. However, this is the maximum penalty the ICO is able to issue in respect of breaches occurring before 25 May 2018 and would in fact be the highest fine the ICO has ever issued.

The announcement was made as part of the ICO’s progress report into its investigation of the use of data analytics in political campaigns. The investigation was launched in response to allegations that data obtained from Facebook by Cambridge Analytica was misused by both sides in the UK referendum on membership of the EU and to target voters during the 2016 American Presidential election process.

The breaches relate to the Cambridge Analytica app which scraped data from the profiles of the 320,000 US Facebook users who used the app (a personality quiz) and also from those users’ friends’ accounts (an estimated 87 million users worldwide, including 1 million UK users). Facebook was not sufficiently transparent with users concerning the ability of the app to access profile data and, despite being aware of potential breaches of its terms of service, Facebook did not implement adequate security measures to restrict Cambridge Analytica’s collection and use of Facebook data.

This is the strongest indication yet from the ICO that it is prepared to use the full range of its regulatory powers to deal with the most flagrant data breaches. Facebook has certainly got off lightly with a fine of £500k due to the timing of the breach; a GDPR fine could have easily have been in the tens of millions. Social media platforms and political parties and campaigns are clearly high on the ICO’s current agenda, but other global businesses ought to take note too.

Most businesses are unlikely to ever face fines in the region of €20m or higher. However, practices which show a disregard for data laws and the privacy rights of individuals will attract the ICO’s attention and little leniency will be shown. Businesses operating in the EEA must ensure that they provide sufficient information to individuals about the use of their personal data, that they properly safeguard that personal data and, in the event of a data breach, take prompt and effective measures in response.

*Facebook now have an opportunity to respond to the ICO Notice before the penalty is finalised.

Excerpts from this article were first published on LexisPSL on 11/07/2018

The latest on the right to work for EU nationals post Brexit, a cautionary tale of GDPR breach, plus cases on disability discrimination, employment status and whistleblowing

What’s new This month we look at the timescale for responding to a subject access request, a consultation on health in the workplace, gender discrimination in job adverts, and Labour’s proposals for employment law reform. Read more >

Brexit Update

Immediate end to free movement of EU citizens not possible in the event of ‘no deal’.Read more >

Employer’s unsuccessful attempts to accommodate a disability did not amount to discrimination

The EAT in the case of DWP v Robininson has held that an employer was not guilty of discrimination when it tried but failed to deal with issues concerning an employee’s impaired eyesight.   Read more >

PwC fined €150,000 for GDPR breach PwC, a multi national professional services company, has been fined €150,000 as a result of a breach of GDPR rules relating to the processing of employee data.   Read more >

Whistleblowing – reasonable belief and public interest

In the recent decision of Okwu v Rise Community Action, the EAT held that a tribunal had misapplied the public interest test in a protected disclosure case.  Read more >

Self employed consultant or worker?

A recent NHS case about the employment status of an out of hours GP has relevance for all employers who contract with “self employed” consultants.Read more >

Pannone Academy

News of the fine issued to PwC in this month’s update highlights the importance for employers of understanding their obligations under the GDPR.  As part of its range of employment law and HR courses, Pannone Academy offers an introduction to the GDPR which outlines employer obligations under the GDPR and will assist in training staff to ensure they are aware of these obligations.  More details can be found online at https://www.pannoneacademy.com/

Goldman Sachs International –v- Procession House Trustee Limited, Procession House Trustee 2 Limited [2018] EWHC 1523 (CH)

Introduction

The service of a break notice is often a contentious point in a landlord and tenant relationship.
Break clauses are strictly interpreted and it can be notoriously difficult to serve a break notice correctly. Even a minor breach can invalidate a break notice. Tenants and practitioners alike will remember Avocet Industrial Estates LLP -v- Merol Limited [2011] EWHC 3422 (CH) in which the tenant was found to have not broken its lease on the basis that it had £130 of historic interest which had accrued on late payments, despite the fact that it had not been demanded by the landlord.
The message is, and always has been, exercise an abundance of caution when exercising a break.

The Facts

In this case, Goldman Sachs had a lease of office premises at Procession House in the city of London. The lease was for a term of 25 years from and including 29 September 1999, with a break at the 20th year of the term. The passing rent was £4 million. If therefore Goldman Sachs could exercise the break, it could save itself £20 million. A hefty saving, not least because Goldman Sachs was no longer in occupation of the building.

The parties could not, however, agree on the interpretation of the break clause and so GS very sensibly applied to the Court for a declaration as to the true meaning of the break before exercising the same.
The key text of the break read as follows:

“23.1 Subject to the Tenant being able to yield up Premises with vacant possession as provided in clause 23.2, this Lease shall be terminable by the Tenant at the expiry of the twentieth year of the Term by the Tenant giving to the Landlord not less than 12 months’ and one days’ previous notice in writing.
23.2 On the expiration of such notice, the Term shall cease and determine (and the Tenant shall yield up the Premises in accordance with clause 11 and with full vacant possession). Such determination shall be without prejudice to the respective rights of either party against the other in respect of any antecedent claim or breach of covenant.

23.3 The Tenant shall not be entitled to give such notice while it shall be in arrears in payment of the Rent.”

Clause 11, to which paragraph 23.2 referred, was a reinstatement clause requiring the tenant to remove alterations and additions, make good and reinstate the premises.

The parties had agreed that there were two conditions to the break clause. The first was that the tenant could not give notice whilst it was in arrears of rent. The second was that it should give vacant possession of the property at the break date.

The parties, however, disagreed on the interpretation of 23.2 and whether that imposed a further condition such that the tenant was obliged to comply with the reinstatement obligations contained within clause 11.

The Decision

The tenant successfully argued that natural and ordinary meaning of clause 23.2 was that it did not impose an additional condition on the tenant. Rather, it offered additional clarification. Arguably, the words within the brackets in 23.2 were largely redundant and the Court drew the conclusion that these had been added for emphasis.

The Court also took into account that the yielding up clause included a degree of ambiguity such that the tenant would require the landlord’s input on compliance. Minor breaches could invalidate the break. In considering this point the Court applied the contra proferentum rule which means that if there is doubt about meaning, the clause should be construed against the drafter, in this case the landlord.
The Court noted that if the landlord wished to impose a pre-condition, he should make it clear in the drafting what the tenant has to do, rather than leaving it as a point to be argued.

The message remains clear; break clauses should be considered carefully at drafting stage in order to ensure that both parties can be sure as to the requirements that need to be fulfilled in order to exercise a break. If in doubt, the parties should engage, and well in advance of the break date, in order to agree interpretation of the same.

The case is now the subject of an appeal, the outcome of which is awaited with interest.

For queries please contact:

Gemma Staples, Director
Tel: 0161 393 9075
Mob: 0782 552 8094
Email: gemma.staples@pannonecorporate-com.stackstaging.com

In this edition, we look at the increasing use of statistics in the health and safety sentencing process, examine the impact of underfunding on our health and safety enforcement agencies and look at the potential for a statutory duty of candour.

We also round up the news from across our practice area, taking in developments in environmental, food, fire safety, inquest and trading standards law.  We’d love to hear your feedback on our first issue so please do get in touch with your thoughts!

This is also a great opportunity to remind you of our inaugural seminar, which is taking place on 10 October 2019 at Innside, Manchester.  Covering property safety risk, we have an exciting programme that will equip you with practical ideas and tools to strengthen and shape your property risk management strategy.  Designed for corporate and commercial organisations, the seminar covers everything from risk identification, management and allocation to future predictions for the regulatory landscape post Grenfell.  To secure your place, email Susan Rigg

HEALTH & SAFETY: VIEWPOINT

Statistically are we heading in the right direction?
Statistical evidence is playing an increasing role in determining the likelihood of harm as required by the Definitive Guideline on sentencing health and safety cases. h

A cry for help?
Local authority enforcement is in decline. The vastly reduced capacity of environmental health departments means they cannot target and action breaches as before. And with Whitehall endlessly engaged in Brexit planning, the most forceful cry for help has come from fellow regulator the Health and Safety Executive (HSE), which published a Statement of Commitment in April.

CARE: VIEWPOINT

Duty of candour: a level playing field?
When Andy Burnham, then MP for Leigh, proposed a statutory duty of candour back in 2017, he no doubt hoped progress might now have been made. His draft Bill, prompted by his involvement with the Hillsborough families, required public authorities to admit responsibility following adverse incidents, even before court proceedings began.

HEALTH AND SAFETY: NEWS

Health, safety and environmental inspections in decline
Research by the Unchecked campaign group has revealed a staggering drop in enforcement since 2009/10.

INQUEST: NEWS

Annual Coroner Statistics Published
The Ministry of Justice has published the Annual Coroner Statistics for 2018 in conjunction with the Office for National Statistics.  

FOOD SAFETY: NEWS

New recommendations for the Food Standards Agency
The National Audit Office has published a report, “Ensuring Food Safety and Standards”. 

ENVIRONMENTAL: NEWS

Resources and waste strategy
DEFRA has confirmed that final proposals are being developed for the Government’s Resources and Waste Strategy.  The Strategy forms part of the 25 Year Environment Plan, which commits to leave the environment in a better condition for the next generation.  

FIRE SAFETY: NEWS

Double consultation
As we passed the second anniversary of the tragedy at Grenfell Tower, we could slowly see the seeds of change being sown.

CARE: NEWS

Decrease in CQC enforcement
The Care Quality Commission (‘CQC’) has published its Annual Report for 2018/19. The Report covers the CQC’s operation and performance as a whole, including its use of enforcement powers.

TRADING STANDARDS: NEWS

Government to consult on new powers for the CMA
The Government is to consult on giving the Competition and Markets Authority new powers to directly fine businesses that overcharge or mislead their customers.

Pannone Corporate’s HR Forum is a free regular update for employers and HR professionals, featuring sessions on employment case law, legislation and topics of interest to those involved in managing a workforce or dealing with HR issues.  In our next HR Forum, we will cover: Getting SARious… Dealing with data subject access requests     Data subject access requests are relatively easy for employees to make, but can be problematic, costly and time-consuming for employers. And whilst their main purpose is to allow the individual to check if data is being lawfully processed, they are often used as a fishing expedition, to gain evidence which may then be relied on in bringing a tribunal claim.With a spotlight on data processing following GDPR and eye-watering fines being issued by the ICO, it is now more important than ever that SARs are dealt with properly.   In this session, we will look at the key steps to be followed when dealingwith a SAR as well as highlighting the potential pitfalls to be aware of. We will also consider what information does not need to be provided and discuss practical steps you can take before a request is made to mitigate its impact.   Deal or no deal? Brexit update   With all of the uncertainty surrounding when (and if?) we will leave theEU and what any exit will look like, there are many outstanding questions about how this could impact employers and their staff. In this session, we will bring you up to speed on the current state of play and discuss the potential implications of leaving with or without a deal.   Case Law Update   A summary of some of the more important or interesting decisions coming out of the tribunals and courts in the last few months, including the most recent decisions on shared parental leave, disability discrimination, and holiday pay.

Details

When: Wednesday, 9 October 2019   Where: Innside Manchester, First Street, Manchester Time: 8.30am registration, 9.00am start, 12pm close   Cost: Free

To reserve your place please RSVP by email to: paula.kershaw@pannonecorporate-com.stackstaging.com    Places will be confirmed approximately 14 days before the event.       We look forward to seeing you!

At Pannone Corporate we understand that one of the most emotionally stressful times individuals will experience is when a member of your family or a loved one dies. That time is even more difficult if a dispute arises in relation to the deceased’s estate or their will.

 

Unfortunately, such disputes frequently arise as there are a number of ways to contest a will, which could give rise to a valid claim through the courts.

 

The legal process of contesting a will is often complex, meaning that clients require expert legal advice to assess the merits and validity of a claim. At Pannone Corporate we support clients through the process, both contesting a will and also when defending a claim in respect of a will. The objective is to guide clients to a positive conclusion as quickly and cost-effectively as possible.

 

Grounds for Contesting a Will

For a spouse, child, cohabitee or an individual who may have expected to have an interest in an estate, there are various grounds on which a will may be validly contested. Such claims may be brought by people excluded from a will or someone who has received less than they had been led to believe or had expected. The grounds under which a will can be contested include:

• – the will has not been validly executed (a will must be signed by the individual in the presence of two witnesses who must also sign the will in the presence of each other);

 

• – the deceased lacked the required mental capacity to create a will;

 

• – the deceased was unaware of or did not approve the contents of the will;

 

• – undue influence has been exerted upon the testator when creating the will (that is, what appears to be an otherwise valid will has been executed as a result of undue pressure by another individual, against the testator’s true wishes); or

 

• – the will is forged or otherwise fraudulent.

 

If there is merit to a challenge to the will on one of the above grounds, then a claim against the deceased’s estate can be raised, initially in pre-action correspondence and, if necessary, through the courts. The exact proceedings will depend on the remedy being sought.

 

Other Claims Against an Estate

As well as the above challenges to a will, there are other circumstances where a claim can be brought against an estate. These include:

 

• – a claim under the Inheritance (Provision for Family and Dependants) Act 1975, which makes provision for a court to vary the distribution of an estate to a spouse, former spouse, child or other dependants, where the deceased has failed to make reasonable financial provision for that individual. This can apply to any estate, irrespective of whether or not the testator made a will;

 

• – rectification of a will: where a solicitor or will drafter has made an error in drafting the will so the will fails to reflect the express instructions of the testator.

 

Timescales for Claims Concerning Wills

Whilst there is no statutory time limit for contesting a will, any challenge to a will should be made as quickly as possible. The longer a challenge is left the more difficult contesting the will may become. It is important to, therefore, seek legal advice as soon as possible from the date of death, particularly if steps are to be taken to prevent the distribution of the estate pending the determination of the dispute.

 

It should also be noted that there is a time limit to issue court proceedings for an Inheritance Act claim, which is 6 months from the date of the grant of probate.

 

How to Contest

When contesting a will, the courts expect parties to set out their claims in pre-action correspondence. A carefully worded letter of claim should be sent to the executors setting out the basis of the claim. Steps may also be taken quickly to lodge a caveat at the Probate Registry, which will prevent a grant of probate (which is required to administer and distribute an estate) being obtained until a resolution of the dispute is reached. The restriction under a caveat lasts six months but may be extended where needed and if the situation calls for it. Seeking early legal advice will assist with this process and maximise your prospects of successfully contesting a will.

 

At any time in the dispute, it is open to the parties to attempt to agree with the settlement terms. Alternative dispute resolution (ADR) is now expected by the courts and parties should attempt to settle claims through correspondence, settlement meetings or formal mediations. Pannone Corporate is experienced in all types of ADR and encourages clients to reach a settlement if at all possible.

 

If an agreement cannot be reached, it may be necessary to seek a determination of the claim through the courts. A formal claim will need to be drafted and issued at the court, following which the other party will have an opportunity to respond to that claim. The court process then involves various stages before a final trial in which a judge will decide the claim.

 

Avoiding a long, drawn out, and expensive legal process when contesting a will is always preferable and we seek to work with our clients to achieve an early resolution if possible. However, this is not always possible and at Pannone Corporate, we aim to offer expert advice and support, guiding you through the dispute, mediation and legal proceedings should they arise. For further information, please call our contentious trust and probate team on 0800 131 3355 or contact them via email.

In the complex and often costly world of property development there are various potential restrictions on the progression of a property developer’s best laid plans. Restrictive covenants can rank right up there in terms of both costs and navigation with potentially severe consequences of breaches. Understanding restrictive covenants and how to tackle them is vital right from the start of any new commercial property venture. 

What is a Restrictive Covenant? 

A restrictive covenant is a control imposed on the use or development of a certain piece of land. They can date from decades and even hundreds of years ago and are meant to ensure the continued enjoyment of the neighbouring land. In modern times restrictive covenants have morphed into a many faceted tool for the crafty, and a barb for the unwary. 

As indicated by the word “restrictive”, restrictive covenants have a negative rather than a positive implication. They will state what cannot be done rather than what a land owner should do. 

For commercial real estate, restrictive covenants can be implemented in many ways. They can restrict the activity of tenants by the landlord or a lender can use a covenant to restrict activity on the property while the owner owes money. These covenants can be written into a property deed, either for a set amount of years or on an indefinite basis. 

Restrictive covenants can also operate in ways that you might not expect. They can restrict opening times, stop certain types of business from operating on the land (prohibitions on selling alcohol, for example), or prevent parking of commercial vehicles on the property. All of which can be potentially damaging for the smooth running of a business, not to mention the possible implications of preventing healthy commercial competition.  

Challenging Restrictive Covenants – is it worth it? 

There are a few options available to those wishing to challenge a restrictive covenant.  Challenges may be based on the premise that the restrictive covenants are not valid, that they are not enforceable or that they are contrary to the law or updated legal policies. For example, restrictive covenants against competing businesses opening in nearby premises may fall foul of competition laws.

A variation of the covenant could be negotiated by an express release between the parties. Alternatively, the subjected party may apply to the Upper Tribunal for modification or removal of a restrictive covenant, though this can take much longer and be much more expensive to resolve. 

Another option for those with less time, and shallower pockets, is obtaining indemnity insurance for the intended breach. Policies can be obtained for a one off fee and can provide cover for landowners, lenders and tenants under one policy. A key point to note here is the cost saving property developers will make if they obtain their insurance prior to the commencement of any planning application. Once planning has been granted the cost of a policy is invariably much higher than a pre-planning policy would have been. 

For more information about restrictive covenants and its impact on your commercial real estate, get in touch with the Pannone Corporate team. Either call on 0800 131 3355 or by filling out the contact form.

What’s new

This month we look at the HMRC guidance on the new tax treatment of termination payments, the requirement to provide itemised payslips for all workers, and proposals for a new European whistleblowing directive. Read More

Case law review

Shared parental leave

In last month’s newsletter we reported on the first EAT decision about enhanced pay for shared parental leave, which concluded that it is not direct discrimination to enhance maternity pay but not shared parental pay.  In the case of Hextall v Chief Constable of Leicestershire Police, the EAT looked at whether this might amount to indirect discrimination. Read more

Constructive dismissal – what can be relied upon?

In Kaur v Leeds Teaching Hospitals NHS Trust, the Court of Appeal has provided useful guidance on how to approach constructive dismissal cases and in particular, what acts can be relied upon when there is a course of conduct lasting over a lengthy period of time. Read more

All work related travel constitutes “working time”

Work-related travel beyond a worker’s normal workplace counts as working time according to a ruling by the European Free Trade Association Court in Thorbjorn Selstad Thue v Norway. Read more

When does notice take effect?

In the recent case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood the Supreme Court has settled the question of when notice delivered by post takes effect for once and for all. Read more

Constructive dismissal – breach of an express term relating to pay can never be reasonable…

In Mostyn v S and P Casuals Ltd the EAT allowed an appeal against an employment tribunal’s finding that an employee had not been constructively unfairly dismissed when his employer threatened to impose a significant cut in his basic pay. Read more

GDPR update

The GDPR is now in force, supported by a new Data Protection Act. As the ICO is keen to point out, compliance is an ongoing challenge. “Read more” link to https://ico.org.uk/about-the-ico/news-and-events/news-and-blogs/2018/05/beyond-2018-data-protection-laws-built-to-last

JACK HARRINGTON

HEAD OF EMPLOYMENT

0161 393 9050

What’s new This month we look at the annual report from the arbitration and conciliation service, ACAS, and consultations on sexual harassment in the workplace, health at work, and proposals for a single enforcement body for employment rights. Read more >

When does an employer have constructive knowledge of disability?

The Employment Appeal Tribunal has considered whether an employer will be considered to have known an employee was disabled in two recent cases with different factual backgrounds: the first when the employee has not informed the employer of her impairments, and the second when the employee has not consented to an occupational health provider passing information on to his employer. Read more >

Who is responsible for the production of national minimum wage records after a TUPE transfer?

In Mears Homecare Limited v Bradburn the EAT decided that a previous employer was no longer responsible under national minimum wage legislation for providing pay information to former employees after a TUPE transfer. Read more >

Are agency workers entitled to work the same number of hours as directly recruited colleagues?

The Agency Workers Regulations 2010 provide that an agency worker who has worked for the same hirer for 12 weeks is entitled to the same basic terms and conditions as a directly recruited worker doing the same role when it comes to pay, annual leave, rest periods and breaks, night work, and duration of working time.  In the recent case of Kocur v Angard Staffing Solutions, the Court of Appeal considered whether this means an agency worker is entitled to be provided with the same contractual working hours as a directly-recruited comparator. Read more >

Holiday pay for part year workers

We all know that workers are entitled to 5.6 weeks annual paid holiday under the Working Time Regulations but how does an employer calculate holiday pay for an employee who only works for part of the year?  That was the issue considered by the Court of Appeal in the case of Harpur Trust v Brazel. Read more >

Who to contact:

JACK HARRINGTON HEAD OF EMPLOYMENT 0161 393 9050 Email Jack

On 12 June 2018 the Court of Justice of the European Union (CJEU) ruled on a question referred from the Dutch court regarding the Louboutin ‘red soles’ trade mark.

As we explained in an earlier blog regarding this case, Louboutin registered the red soles of its high heels as a trade mark. The registration was challenged in the Dutch courts by a Dutch high street chain, Van Haren, who had been sued by Louboutin for selling high heeled shoes with red soles. During the proceedings a question arose as to the type of trade mark Louboutin had registered and specifically whether it could be classed as a “shape mark”.

The distinction is important because a trade mark cannot be registered if it consists exclusively of a shape which “gives substantial value” to the goods covered by the registration. If Louboutin’s trade mark was found to consist exclusively of a shape giving substantial value to the shoes then its trade mark would be deemed invalid.

The Dutch court asked for guidance from the CJEU as to what “shape” means and specifically whether it could include other properties such as colour.

The CJEU has ruled that the shape of a product or of part of a product plays a role in creating an outline for colour. However, where the registration of the trade mark does not seek to protect that shape but solely to protect the application of a colour to a specific part of that product, this would not be a “shape mark”.

The court found that the main element of Louboutin’s trade mark is the colour red. In light of the fact that the trade mark does not seek to protect the shape of the sole of a shoe but instead the application of the colour to that specific part of the shoe, the CJEU held that Louboutin’s trade mark is not a shape mark.

This is in contrast to the advocate general’s view that Louboutin’s trade mark was a shape mark.

This will be seen by Louboutin as a significant win. The ruling confirms that Louboutin’s trade mark is not a shape mark and therefore is not invalid on the basis that it does not consist exclusively of a shape.

The case will now be passed back to the Dutch court for a final ruling following the CJEU’s clarification of the law.

One of the UK’s leading providers of specialist education and therapeutic care, Amberleigh Care, has been bought by its management team, advised by the corporate team at Pannone Corporate.
Amberleigh Care provides services for young males between the ages of 11 and 18 years old at residential centres located in Welshpool and Telford.
Amberleigh Care is a member of The Consortium for Therapeutic Communities and the Royal College of Psychiatrists’ quality improvement network for therapeutic communities. It is a preferred provider across Wales and it is on several regional frameworks across England.
Managing Director Kevin Gallagher and who led the management buy-out team, said, “We are very excited to have this opportunity to take the service forwards and to build on the very solid foundations which have evolved over the twelve years of operation.
In the last two years, we have built the management team and operating systems to position the service as a centre of excellence in this highly specialist area of practice”.
Mark Winthorpe and Katie Ward of Pannone Corporate provided legal advice to the management team.
Mark said: “The deal provides an excellent platform for the management team at Amberleigh Care to further enhance the company’s services and cement its reputation for providing excellent care and education services in this specialist niche area. We wish them all the very best for the future.”

‘Originally published on LexisLibrary and LexisPSL’

http://pannonecorporate-com.stackstaging.com/wp-content/uploads/2019/08/London-Mayor-says-using-facial-recognition-technology-raises-real-concerns-about-legal-framework-5.pdf

What’s new
This month we look at the latest statistics from the Employment Tribunal and Acas, a consultation on paid bereavement leave, and the new rates for national minimum wage and tribunal awards. Read more
We also cover some other key changes which came into force in April including changes to the Tax treatment of termination payments. Read more
Case law review
Shared parental leave
In the case of Mirab v Mentor Graphics (UK) Ltd the EAT considered the topic of ‘bumping’ in a redundancy situation and specifically whether an employee must specifically raise the option of ‘bumping’ before an employer is under a duty to consider it. Read more
Redundancy ‘bumping’
In the case of Mirab v Mentor Graphics (UK) Ltd the EAT considered the topic of ‘bumping’ in a redundancy situation and specifically whether an employee must specifically raise the option of ‘bumping’ before an employer is under a duty to consider it. Read more
Holiday pay for casual workers
It is a truth universally acknowledged that workers are entitled to 5.6 weeks paid holiday under the Working Time Regulations. In most cases, the maths is straightforward. A worker on a 5 day week is entitled to 28 days paid holiday and this is pro rated for part timers. However when it comes to workers on zero hours or other more irregular contracts, the position is less clear. In the recent case of Brazel v Harpur Trust, the EAT looked at the calculation of holiday pay for a music teacher on a term time zero hours contract. Read more
References
In the case of Hincks v Sense Network Ltd, the High Court dismissed a claim that an employer had been negligent when providing a reference for a former employee. Read more
GDPR update
The ICO has now published detailed guidance on the “legitimate interests” basis for processing personal data, which provides an explanation of this legal basis for processing, when it can be used, and a suggested approach for implementation. Read more
The ICO has also published draft guidance on data protection impact assessments and provided a draft template for a data protection impact assessment. These documents were produced in draft form for a consultation which has now closed, so may be amended in their final form. Nonetheless, they provide useful guidance for organisations who will be obliged to carry out assessments under the GDPR. Read more
Who to Contact
Jack Harrington
Head of Employment
0161 393 9050
jack.harrington@pannonecorporate-com.stackstaging.com

The Mayor of London has recently written to the owners of a 67 acre site in Kings Cross London regarding their use of facial recognition technology.

Live facial recognition (LFR) involves the processing of personal data; the biometric data of a large number of people is captured and screened against a database to identify people of interest.  It has significant data protection and privacy implications. This is a high priority area for the ICO; it is currently investigating its use by the police and has intervened in the case of R (Bridges) v Chief Constable of South Wales Police relating to whether the use of LFR by the police is lawful. The ICO has indicated that once judgment in this case is given it will report on the findings of its investigation and set out what action needs to be taken. This will also have implications for private companies.

It’s not just the police that are the subject of the ICO’s focus; it is also considering the use of LFR in public spaces by private companies, just as in Kings Cross. The Information Commissioner has given guidance for police forces considering LFR which includes carrying out data protection impact assessments and ensuring the algorithms within the software do not treat the race or sex of individuals unfairly. The same considerations apply to private companies who will also have to identify the lawful basis upon which they rely to process the personal data.  The ICO has stated that it will consider regulatory action where it finds non-compliance. With the ICO having power to fine companies up to 4% of their worldwide annual turnover and given that this is an area which is under scrutiny, private companies using LFR or considering its use must ensure that they meet their data protection compliance obligations.

GDPR Update
Two months to go until the introduction of the GDPR!
Click here to see the latest ICO resources and guidance
Changes to the Tax Treatment of Termination Payments
The Finance (No.2) Act 2017 makes significant alterations to the law applying to termination payments which are intended to “clarify and tighten” their tax treatment. Read more
Case law review
Dismissing pregnant employees
Two recent appellate decisions have provided reassurance for employers who find themselves having to dismiss an employee who also happens to be pregnant. Read complete article online
Can ‘stand by duty’ constitute working time?
In the case of Ville de Nivelles v Matzak, the European Court of Justice considered whether stand-by time spent by a firefighter was “working time” under the Working Time Directive. Read complete article online
Special circumstances defence in collective consultation
In the case of Keeping Kids Company v Smith and others, the Employment Appeal Tribunal considered when the duty to consult arose when a charity went into compulsory liquidation and whether the ‘special circumstances’ defence could be made out as a result of events which occurred after the redundancy proposals were initially made. Read complete article online.
‘Mere expectation’ that an employee works long hours can amount to a PCP
In United First Partners Research v Carreras the Court of Appeal upheld the EAT’s decision that Tribunals should not take a restrictive approach in identifying ‘PCP’s’ for the purposes of a disability discrimination claim. Read complete article online
Holiday pay for ‘term-time’ workers unlawful
In Brazel v Harpur Trust the EAT considered whether an employer could use a flat rate when calculating holiday pay based on the commonly used calculation of 12.07% of their annual earnings, or whether holiday pay should be calculated solely under section 224 of the ERA 1996. Read complete article online
Agency worker entitlement to basic employment conditions to be assessed individually and not as a package
In Kocur v Angard Staffing Solutions Ltd the EAT held that when an agency employees’ entitlement to the same terms as permanent staff is considered, each term must be considered individually and cannot be offset by other more favourable terms. Read complete article online
Who to contact
Jack Harrington
Head of Employment
0161 393 9050
jack.harrington@pannonecorporate-com.stackstaging.com

Pannone Corporate’s HR Forum is a free regular update for employers and HR professionals, featuring sessions on employment case law, legislation and topics of interest to those involved in managing a workforce or dealing with HR issues.
In our next HR Forum, we will cover:
The GDPR and HR
This seminar will take you through the key changes to your data protection obligations regarding employees, workers and consultants as a consequence of the new EU General Data Protection Regulation and the steps you should be taking now to ensure you are GDPR compliant in readiness for the 25th of May 2018. We will share practical guidance and tips on how you can implement the necessary changes to your HR systems, policies and procedures and there will also be a question and answer session which will provide an opportunity to address any particular concerns you may have.
Case Law Update
A summary of some of the more important or interesting decisions coming out of the tribunals and courts in the last few months, including the most recent decisions on holiday pay, dismissing an employee who may not have the right to work in the UK, the European Court of Human Rights decision on covert surveillance, and employment status in the gig economy.
Details
When: Tuesday 24 April 2018
Where: Innside Manchester, First Street, Manchester
Time: 8.30am registration, 9.00am start, 12pm ends
Cost: Free
To reserve your place
To express your interest in attending, please RSVP by email to:
paula.kershaw@pannonecorporate-com.stackstaging.com
Places will be confirmed approximately 14 days before the event.
We look forward to seeing you.

Covert recordings of meetings not usually gross misconduct

In the case of Phoenix House Ltd v Stockman the Employment Appeal Tribunal discussed the relevant issues to be considered when an employee covertly records a meeting and whether this will always fundamentally undermine the trust and confidence between employer and employee. Read more >

Employer not vicariously liable for a Facebook post shown to a work colleague
In the recent EAT case of Forbes v LHR Airport Ltd, the court held that an employer was not liable for harassment when an employee posted a racially offensive image on Facebook which was then shown to a colleague. Read more >

Whistleblowing – Alleged breach of company policy can be a protected disclosure

In the recent decision of Elysium Healthcare No 2 Ltd v Oguniami the EAT found that a complaint made by an employee about his manager’s breach of a company policy amounted to a “protected disclosure”. Read more >

Discrimination on the basis of perceived disability

In the case of Chief Constable of Norfolk v Coffey the Court of Appeal found that a police constable with minor hearing loss had been subject to direct discrimination because of a stereotypical assumption about the impact of her condition in the future. Read more >

Pannone Academy

The case of Forbes v LHR Airport Ltd in this month’s update highlights the crucial importance of equality and diversity training for all your staff. This is a vital step in employers avoiding vicarious liability for discriminatory acts undertaken by employees. This is one of the many courses offered as part of the Pannone Academy.

Pannone Academy offers a range of employment law and HR courses designed to help companies ensure they operate within the law, with a clear focus on prevention rather than cure. More details can be found online at https://www.pannoneacademy.com/

Who to contact:
JACK HARRINGTON
HEAD OF EMPLOYMENT
0161 393 9050
Email Jack

What’s new
This month we look at the new online DBS system, the Government’s response to the Taylor Review of modern working practices, the increases in statutory pay due to take effect in April 2018 and the requirement to provide itemised payslips from April 2019. Read more
Case law review
Covert Surveillance
In the case of Lopez Ribalda v Spain, the European Court of Human Rights has concluded that installing and relying on evidence from CCTV cameras without notifying employees amounted to a breach of their right to privacy. Read complete article online
Can an employee claim unfair dismissal after the last in a series of fixed term contracts was not renewed?
In the case of Royal Surrey County NHS Foundation Trust v Drzymala, the Employment Appeal Tribunal considered whether an employee had been unfairly dismissed in relation to the expiry of a fixed term contract. Read complete article online
Knowledge of a disability
In Donelien v Liberata UK Ltd, the Court of Appeal has given useful guidance as to when an employer will be considered to be aware of an employee’s status as a disabled person, particularly in circumstances where an employee is refusing to co-operate with an employer’s occupational health provider. Read complete article online
Effective date of termination
In Cosmeceuticals Ltd v Parkin the EAT has again made it clear that if a summary dismissal has occurred, then it is not open to the parties to agree a different date of termination. Read complete article online
Compensation for injury to feelings can be awarded for working time detriment…
In the case of South Yorkshire Fire & Rescue Service v Mr D Mansell & Others, the EAT confirmed that all claims of detriment under Part V of the Employment Rights Act 1996 (including claims of being subjected to a detriment in connection with working time) were akin to claims of discrimination and as such could attract injury to feelings awards. Read complete article online
Who to contact
JACK HARRINGTON
HEAD OF EMPLOYMENT
0161 393 9050
jack.harrington@pannonecorporate-com.stackstaging.com

A recent select committee report on the hot topic of non-disclosure agreements could lead to employers who use settlement agreements having to pay all of the fees for an employee’s legal advice; board level executives having to sign off confidentiality clauses; and employees who sign settlement agreements being able to raise concerns about harassment and discrimination.
So what does this mean for you?

Introduction
Settlement agreements are a valuable tool for employers and employees alike. They allow both parties to move forward from a difficult situation whilst giving employers the security of protection from future tribunal claims and employees a guaranteed and quick resolution as opposed to a potentially drawn out and distressing litigation process.

Recently however, there has been a lot of media attention on the confidentiality aspect of settlement agreements, sometimes referred to as non-disclosure agreements or NDAs, and on 11 June 2019 the Women and Equalities Select Committee published its report (https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/1720/1720.pdf) on the use of NDAs in discrimination and harassment cases. The report found that NDAs are routinely being used to silence employees about allegations of unlawful harassment and discrimination and it expressed concern that the imbalance of power between employers and employees means that employees can feel they have no choice but to accept a settlement which stops them speaking out. The report makes a number of recommendations for the government, employers and lawyers to address these concerns. Here we discuss some of the more significant of these recommendations and consider what they may mean for employers going forward.

What is a “non-disclosure agreement”?
By way of background, non-disclosure agreements are commonly used in transactions where trade secrets need to be protected or there is an element of commercial sensitivity and so are signed to protect the parties’ legitimate business interests. However, the Women and Equalities Select Committee report defines an NDA as a contract that contains clauses that restrict what a signatory can say or who they can tell about something, and are commonly referred to as “gagging clauses”. This therefore extends to settlement agreements where such clauses are common, even in non-contentious situations, as the employer will want to ensure that the employee cannot disclose certain facts, such as how much money they received, or make public comments about how their employment came to an end. That means these clauses, which are often used entirely appropriately and without issue, are now under scrutiny and employment lawyers are having to consider when and how they are included in settlement agreements.

Recommendations from the report
The report makes a number of recommendations with a view to moving to a new norm where employers settle disputes without routinely using NDAs in settlement agreements. It recommends that if confidentiality and non-derogatory clauses are to be used, they are drafted in a clear manner which specifically sets out what information can be shared and with whom.

Workplace grievances, investigations and references

Evidence was given to the Committee of employers failing to adequately address grievances about harassment and discrimination, in some cases with no investigation at all if a settlement is reached, and of employees signing agreements to ensure they would get a good reference. The report therefore recommended that the government raises awareness on how to handle grievances appropriately, and it should consider whether to require that employers investigate all complaints of discrimination and harassment, even if a settlement is reached. It also recommended that legislation is brought in within 12 months requiring employers to provide a basic reference for all former employees.

Raising concerns and sharing information

The government is asked to ensure that NDAs do not stop employees raising legitimate issues about allegations of harassment and discrimination, but that they still provide a route for victims to move on from such alleged incidents if they so choose. The report also recommended that legislation should be brought forward to ensure that NDAs cannot prevent employees from sharing information that may support a colleague’s claim for harassment.

Legal advice and fees

The government had previously proposed that the required legal advice for employees on settlement agreements should also include advice on the scope of any confidentiality clause and what the employee could still disclose. The current report asks that the advice also covers the reasonableness and validity of the confidentiality clause, and recommends that the employer should pay for all the associated legal costs, even if the worker wishes to negotiate on the confidentiality terms and even if they don’t sign the agreement.

Further duties on employers

The report seeks to place more responsibility on employers to prevent such issues arising in the first instance, as the government is asked to strengthen corporate governance requirements to ensure that employers provide appropriate protection to their employees from harassment and discrimination. As an extension of this, it recommends that named senior managers at board level (or equivalent) must oversee the use of NDAs in discrimination and harassment claims as well as the relevant policies prohibiting such behaviour.

The Committee repeats its request that the government creates a mandatory duty on employers to protect workers from victimisation and harassment in the workplace, and to increase the compensation that a tribunal can award to successful claimants in such cases, including the power to award punitive damages against an employer.

Can you still use a settlement agreement, and if so, how?

Settlement agreements containing confidentiality clauses can still be used, but it is prudent to ensure that confidentiality provisions are only used where, and to the extent, absolutely necessary, and they do not stop the employee from speaking to the police or other appropriate individuals, or disclosing a concern to a regulatory body. The wording should make it clear that whilst the agreement is confidential, the employee can, for example, speak to their doctor or therapist should they wish.

Settlement agreements often contain exclusions to the confidentiality clause which permit the employee to discuss the agreement as may be legally required, or with their partner or spouse, or to make a protected disclosure. Such wording is likely to differentiate such a settlement agreement from those that are under the spotlight at present, and it is recommended that such exclusions continue to be used.

Conclusion
The Women and Equalities Select Committee report criticises the routine use of NDAs, so serious consideration should be given to situations where a confidentiality clause is required simply because that has always been the way. If an employer wishes to include and rely upon a confidentiality clause in a settlement agreement then the issues of necessity and reasonable scope must be addressed in each individual case, and the wording must be drafted accordingly.

It is worth noting that the report recommends the introduction of a mandatory duty on employers to prevent harassment in the workplace, which is a step beyond the current position that employers must have meaningful and robust anti-discrimination and harassment policies and training in place if they are to be able to defend a claim of harassment or discrimination, even if the claim arises out of the conduct of a rogue employee. The report has also drawn attention to the fact that many employers fail to investigate complaints of discrimination or harassment adequately or at all.

Given that the current focus on this area of harassment and discrimination is likely to lead to an increase in the number of complaints of harassment and discrimination, now is the time to ensure that relevant policies, guidance and training are up to date and fit for purpose.

For many employers, guaranteeing confidentiality is a key part of a settlement agreement, and often forms part of the reason for offering a payment of compensation in the first instance. Whilst confidentiality clauses can still be used, it is important that they are properly drafted to ensure they are enforceable and do not unreasonably or unjustly restrict an employee from discussing their experience at work.

Our team can draft settlement agreements for you, and can also provide training for you and your managers on discrimination and harassment and on handling grievances and investigations – https://www.pannoneacademy.com

On 6 February 2018 the Advocate General (AG) gave the Court of Justice of the European Union (CJEU) his opinion on a question referred from the Dutch court regarding the Louboutin ‘red soles’ trade mark.
Louboutin registered the red soles of its high heels as a trade mark. The registration was challenged in the Dutch courts by a Dutch high street chain, Van Haren, who had been sued by Louboutin for selling high heeled shoes with red soles. During the proceedings a question arose as to the type of trade mark Louboutin had registered and specifically whether it could be classed as a “shape mark”. The distinction is important because a trade mark cannot be registered if it consists exclusively of a shape which “gives substantial value” to the goods covered by the registration.
The Dutch court asked for guidance from the CJEU as to whether “shape” means the 3-D properties of goods or whether it could include other properties such as colour. The AG suggested that the CJEU should conclude that a shape trade mark could comprise the combination of a shape and a colour.
Whilst the CJEU and the AG are not required to determine specifically whether the Louboutin trade mark is a shape mark, the AG did given his view on this point. He stated that he believed that the Louboutin trade mark seeks to protect the application of a colour to a shape (namely the colour red to the shape of a sole of a shoe) and therefore was a shape mark. However, he emphasised that this is ultimately an issue for the Dutch court to determine.
The AG highlighted that it was also for the Dutch court to determine, if the Dutch Court decides that Louboutin’s trade mark is a shape mark, whether that shape trade mark gives “substantial value” to the goods and therefore should not have been registered in the first place. The AG suggests that when making this assessment a court should only consider the intrinsic value of the shape and must not take account of the attractiveness flowing from the reputation of the proprietor of the trade mark. In Louboutin’s case this would mean that the Dutch court should consider whether red soles in and of themselves (ignoring the association with Louboutin) give substantial value to high heels.
We will keep you updated as to what the CJEU decides when its ruling is published and whether Louboutin loses the right to trade mark its red soles when the case returns to the Dutch court.

When Andy Burnham, then MP for Leigh, proposed a statutory duty of candour back in 2017, he no doubt hoped progress might now have been made. His draft Bill, prompted by his involvement with the Hillsborough families, would require public authorities to admit responsibility following adverse incidents, even before court proceedings have been intimated. Put on hold following the snap General Election, the process has been reinvigorated by the tragedy at Grenfell and the drive towards public accountability pressed by regulators including the Care Quality Commission.

What is proposed?

The Bill addressed a groundswell of opinion that there was an uneven playing field, between bereaved families on the one hand and well-resourced public authorities on the other. There was additional disquiet that, despite the extent of investigations prior to the second Hillsborough inquest, neither the coronial nor criminal justice system had been able to reveal the cover-ups which subsequently came to light.

The draft Bill proposes a statutory duty of candour, which would require public authorities, public servants and officials to:

• act at all times in the public interest and with transparency, candour and frankness;
• assist court proceedings, official inquiries and investigations where their own acts or omissions are (or may be) relevant; and
• disclose information which may change the scope of any proceedings, inquiry or investigation.

‘Public authority’ is given an inclusive definition and is proposed to include, “any national or local government department… institution or agency engaged in functions of a public nature… [this] includes entities with a private structure but which are majority owned by public funds.”

What about failure to comply?

Chief Executives of public authorities will commit a criminal offence, punishable by a fine and/or imprisonment if they fail to meet the duty.

Public servants also commit an offence if they intentionally or recklessly mislead the general public, the media or proceedings. They will equally be guilty if they hinder their authority’s compliance with the duty.

Other proposals of note

The Bill also suggests bereaved families and ‘core participants’ at inquiries and inquests be entitled to publicly-funded legal assistance and representation at the same level, or in proportion to, the resources provided to the public authority.
What could this achieve?
When introducing the draft Bill, Any Burnham summarised the motivation as “simple”. “It [is]…to protect other families from going through what the Hillsborough families went through and from a similar miscarriage of justice. It empowers victims to secure disclosure of crucial information and prevent public authorities from lying to them or hiding the truth by making that an imprisonable offence… it creates a level legal playing field at inquests for bereaved families so that finally inquests become what they should always be – a vehicle to get to the truth.”

When can we expect a change?

Introduced in 2017, the Bill’s progress was thwarted by the dissolution of Parliament for the General Election in May of that year.

However, the Law Commission is currently considering reform of the offence of Misconduct in Public Office and anticipates discussing the duty of candour in its final report, due in autumn 2019.

Comment

The Bill does not define “candour” and the precise scope of any new duty remains unclear. Certainly we would not expect any duty to require criminal suspects to make admissions prior to appearing before the Court; that would undermine the criminal justice system.

Interestingly, whilst the emphasis is on public authorities, the proposed duty would also apply to private organisations where their activities are delegated or contracted to them by an organ of the state, or where they have a health and safety obligation to the public.

Questions will also arise as to the tension between the requirement for candour and the right to silence in the criminal process. Where someone reasonably asserts that right, the draft Bill suggests they will not be guilty of lacking candour. However, the idea that any assertion of the right of silence will be subject to third party scrutiny is seismic to say the least.

The proposal to extend legal assistance to bereaved families is likely to receive widespread support. However, the very significant cuts to the legal aid budget in recent years begs the question: where will the money come from?

Interestingly, the Bill also proposes a limit on the legal spend of public authorities in responding to inquests and inquiries, the logic being that the requirement for them to ‘come clean’ at the outset will reduce the length of investigations and thereby ensure costs savings for all. Any such limits may however fetter the ability of public authorities to fully and properly articulate their case when responding to investigations.

In addition, of the organisations which have to date voluntarily accepted responsibility in the immediate aftermath of adverse incidents, there has been little acknowledgement of their acceptance or explicit reduction in fine imposed.
Sentencing Guidelines for health and safety offences are stated to be punitive and designed to send a message to shareholders and can therefore be seen as a ‘stick’ to encourage early admissions.
However, there is no comparable carrot. In the absence of an acknowledged benefit or (financial) incentive for being candid, a potential defendant is likely to consider themselves caught between a rock and a hard place.

Despite the suggestions for improvement which have been highlighted by bereaved families over recent years, the enactment of a statutory duty of candour appears low on the Government’s priorities at the current time. If the duty is to become law then there needs to be careful consideration of the potential, but significant, implications to ensure that there is genuinely fairness to all.

What’s new
This month we look at the new rules for taxation of termination payments, changes to national minimum wage and other statutory rates, and a cautionary tale about data protection Read More
GDPR update
The ICO’s website now provides a number of useful resources to help businesses, both large and small, get ready for the GDPR. These can be accessed via the following links:


Case law review
Holiday pay – when self-employed consultants are found to be workers
The European Court of Justice in the case of King v Sash Window Workshop Ltd has ruled that where a company does not provide its workers with paid holiday, any accrued leave can be carried over indefinitely.
Read complete article online
Employer’s liability for rogue data protection breach
The risk of a disgruntled employee misusing confidential information in order to cause damage to the company’s business is often a concern where an employee is suspended or disciplined. A recent High Court decision has now given employers even more cause for alarm where that information contains personal data.
Read complete article online
Weekly rest periods
In the case of Maio Marques da Rosa v Varzim Sol – Turismo, Jogo e Animação SA the European Court of Justice has ruled that the 24 hour weekly rest period required under the Working Time Directive may be granted on any day within a seven day reference period.
Read complete article online
Employer breached implied term of trust and confidence when it provided a false reason for an employee’s dismissal
In the recent case of Rawlinson v Brightside Group Ltd, the Employment Appeal Tribunal considered whether an employee who had resigned when falsely told that the reason for his dismissal was a reorganisation when the real reason was his poor performance, could bring a claim for breach of contract for his notice pay.
Read complete article online
Can an employer lawfully dismiss an employee who fails to provide documents showing their right to work in the UK?
In the case of Baker v Abellio London Ltd, the Employment Appeal Tribunal considered if an employer could rely on illegality as the fair reason to dismiss an employee for failure to produce documentary evidence of his right to work in the UK.
Read complete article online
Who To Contact
JACK HARRINGTON
HEAD OF EMPLOYMENT
0161 393 9050

The Information Commissioner’s Office (ICO) has recently demonstrated that it will take a hard line on data breaches announcing on 8 and 9 July 2019 that it intends to fine British Airways  £183.39 million and Marriot International £99.2 million.

Both fines relate to cyber incidents. In the British Airways incident the personal and financial details, including contact and payment card details, of approximately 500,000 customers were harvested. The ICO’s subsequent investigation found that information was compromised by poor security arrangements.

In the Marriot incident a variety of personal data, including email addresses, phone numbers, dates of birth and passport numbers, from approximately 339 million guest records globally were exposed. Whilst Marriott notified the breach to the ICO in November 2018, it is thought the vulnerability began in 2014 when the systems of the Starwood hotels group were compromised. The ICO found that Marriott failed to undertake sufficient due diligence when it bought Starwood in 2016 and should have done more to secure its systems.

Fines for a GDPR breach can be up €20 million or 4 per cent of annual global turnover, whichever is higher. The intended fines are two of the largest ever levied by the ICO amounting to 1.5 per cent of British Airway’s turnover and 2.4 per cent of Marriott International’s turnover reflecting the ICO’s view of the gravity of the breaches. Interestingly had Marriott International discovered and disclosed the data breach prior to 25 May 2018, it would have been fined under the previous Data Protection Act, which had an upper fine limit of £500,000.

British Airways and Marriott International now have the opportunity to make representations to the ICO regarding their intended fine before the ICO makes its final decision. However, these intended fines serve as a reminder that GDPR compliance is not optional and is underpinned by strong enforcement powers which the ICO is willing to exercise. Should you wish to discuss data breaches or GDPR compliance generally please contact Amy Chandler or Patricia Jones.

The Court of Appeal yesterday (23 November 2017) confirmed that small businesses that have goodwill in a small locality can prevent the registration of a trade mark nationwide and can also apply to invalidate a brand owner’s trade marks.
In the case of Caspian Pizza [2017] EWCA Civ 1874 the Court of Appeal considered the question of whether two trade marks which had been registered by a pizza business trading in Birmingham called Caspian Pizza should be declared invalid on the basis that a business trading in Worcester had acquired goodwill in the same name in Worcester before the trade marks were registered.
The trade mark owner had sued the Worcester business for passing off and trade mark infringement for use of the name Caspian Pizza. The Worcester business counterclaimed for a declaration of invalidity in respect of the Caspian trade marks. The Court of Appeal held that the Worcester business only had goodwill in Worcester but that this was sufficient to object to the registration of the trade marks on the basis that the trade marks are UK wide and therefore would include Worcester.
This case is likely to be a great concern for brand owners as it gives any business, no matter how small, the power to obtain a declaration of invalidity of another brand’s trade marks as long as they have earlier goodwill in a locality.
It also serves as a salutary reminder to trade mark owners to ensure that their trade marks are in order before issuing proceedings for infringement. In this claim the Claimant had aimed to stop the use of the Caspian name by one restaurant and instead lost both of its trade marks.

What’s new

This month we look at proposals for the extension of gender pay gap reporting, proposed changes to rules on modern slavery reporting, and the issue of discrimination against vegans. Read more >

Case law review

Holiday Pay – two important Appeal Court decisions We report on two recent decisions of the appeal courts in cases concerning holiday pay, neither of which will be welcomed by employers.  Read more >

Failure to pay a male employee enhanced shared parental pay was not discriminatory

In the combined cases of  Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police, the Court of Appeal has confirmed that it is not discriminatory for employers to enhance maternity pay for female employees but not to enhance shared parental pay for male employees. Read more >

Fair dismissal for refusing to stop promoting religious beliefs In the case of Kuteh v Dartford and Gravesham NHS Trust, the Court of Appeal held that it was not unfair for an NHS Trust to dismiss an employee for the inappropriate promotion of her religious beliefs to patients following an instruction by management not to do so. Read more >

Withdrawal of an overseas posting due to disability was not discriminatory

The Court of Appeal considered whether an employer’s decision to withdraw the offer of an overseas posting on medical grounds for an employee with multiple disabilities amounted to disability discrimination. Read more >

Transfer of clients’ investments to a new firm may be a TUPE transfer In Dodič v Banka Koper and Alta Invest, the ECJ considered whether the European Directive which deals with the transfer of undertakings applied in a scenario where a financial services provider ceased those activities and gave its clients the option to transfer their investments to another provider. Read more >

Lawyers from around the globe visited Manchester recently to soak up what the city has on offer and improve international links, at an event hosted by Pannone Corporate.
As a member of the international legal network, PLG International Lawyers, Pannone Corporate hosted this year’s summer conference which saw lawyers enjoy a busy three days in the city.
The conference included presentations by some of the city’s business leaders.
Adrian Mills, the General Manager of BBC North, presented to delegates about the story and success of the corporation’s move to Manchester. Dan Storer, director of Business Development at inward investment agency Midas, took attendees through a history of the city, there were also legal seminars on corporate law, IP, IT & e-commerce and dispute resolution as well as meetings for Pannone Corporate clients with lawyers from the network.
Pannone Corporate managing partner Paul Jonson said: “The conference was hugely well-received by the attendees and everyone was impressed by what Manchester had to offer as well as the seminar programme. “As a member of PLG, we can offer clients direct to access to high quality legal experts on the ground wherever in the world they are doing or want to do business. We were delighted that so many our PLG colleagues and clients were able to joins us here in Manchester for the conference.”

Disputes in partnerships are not uncommon and they can occur for many reasons. Often, disputes of a more serious nature can be as a result of rising tensions that have been building up for years suddenly coming to a head. This may cause one partner to want to end the partnership, or for the other partners to want to expel them. 

So, what can you do when sensitive, high-tension partnership disputes do arise? We set out below useful and practical points on some key issues within partnerships and steps that might help during the process.

Refer to Your Written Agreement

Before you enter into any kind of partnership in a business, you should prepare a written agreement. This is essential so that if any issues were to arise, such as a partner wanting to leave the partnership, there is a clear procedure describing how the exit or retirement should be handled. If you enter into a partnership without a written agreement, then you are putting yourself at risk. 

Your agreement should include, at a minimum, the following terms:

• How much of the business each partner will own and how profit and capital are allocated and shared.
• Each partner’s role, duties and obligations.
• Provisions for partner exit and retirement.
• Under what terms the partnership can be dissolved or varied.

In any instance that a problem does arise, the first step should always be to read over the written agreement. 

Discuss the Issues

If there is a dispute, partners should have an open and honest conversation about their concerns.  It is safe to do this during a without prejudice discussion or meeting. In some partnership disputes, the meeting is likely to be hostile and difficult; however, having a constructive discussion can usually narrow the issues. Focus on finding a solution to your issue rather than the entire problem itself, with both of you working towards a common goal, is more likely to achieve progress.

Discuss the outcome you want and how you believe it is best for the partnership. You should also consider how you might persuade your partner to agree to it. When presenting this outcome, remain calm and diplomatic.

Consider Mediation 

Occasionally, meeting and discussing your problems is not enough to resolve partnership disputes. This is when you may wish to consider appointing a mediator to help you resolve the dispute.

A mediator will act as an experienced neutral third party in your dispute and will help you work towards a negotiated outcome.  A mediator will ensure that emotions are kept out of the discussion. Often, when it comes to high-tension disputes, emotions run high, and can affect the quality of your discussion and the output.  Mediators’ experience with these types of disputes means that they can also draw upon other disputes they have previously helped resolve, where they may have gained helpful and effective strategies that can be used to help tackle your problems.

Consult Specialist Partnership Lawyer

In some cases, the dispute has gone too far to each an agreed solution. If you consider your dispute is escalating towards court proceedings, then it is time to contact a specialist partnership lawyer. At Pannone Corporate, we are experienced in resolving partnership conflicts.  We are nationally ranked by Chambers and Partners for our expertise in partnership disputes. Please contact us on 0800 131 3355. 

The Intellectual Property Enterprise Court (IPEC) finds in favour of a brand owner subjected to online substitute sales and awards significant damages.
Brand owners who sell through online trading platforms (either directly or indirectly) often face “substitute sales”. This involves an online seller advertising products under a popular brand listing to attract customers but thereafter supplies generic, imitation or substitute products to the shopper.
In June 2017, an Amazon seller was held liable for trade mark infringement and passing off for substitute selling through the claimants’ Amazon listing and was ordered to pay £25,359.75 compensation . The decision is a helpful precedent for brand owners, particularly as the judge was prepared to “wield a broad axe” to the assessment of compensation.
BACKGROUND
The claimants relied on a logo trade mark for DESIGN ELEMENTS for the sale of flagpoles made in China, packaged into the claimants’ own branding and sold through eBay and Amazon.
The defendant also sells flagpoles made in China. It “tagged onto” one of the claimants’ Amazon listings, undercutting its price and thereby winning the “buy box” (which awards top rate sellers the most prominent advertisement and the ability for shoppers to buy with one click).
The defendant argued that the listing was generic as it did not include any reference to the DESIGN ELEMENTS trade mark, that it was entitled to use the listing to sell flagpoles that met the listing’s generic description and that Amazon did not allow new listings when there is an existing listing which matches the product concerned. Further, it had not used the claimants’ trade mark because this does not appear in the product description, and the phrase “by Design Elements” in the listing did not amount to use of a trade mark but indicated the seller who created the listing.
The claimants argued that “Design Elements” had been confirmed as being both the brand and the manufacturer, as required by Amazon for listings. It was a matter of fact that the defendant was selling a different flagpole produced with a different specification by a different manufacturer and with a different brand to that advertised in the listing. As such it was not allowed under Amazon’s terms and conditions to “piggyback” onto the claimants’ listing.
WAS THERE USE OF THE TRADE MARK?
The court held there was use of the claimants’ trade mark, in that the defendant had been offering for sale goods under the trade mark. When the trade mark appears in the description “By Design Elements”, this indicates the origin of the goods. The average consumer can easily identify this information as being the manufacturer. The supplier has its own separate place in the listing.
WAS THERE A LIKELIHOOD OF CONFUSION?
The defendant argued that it had used the listing for over 4 years with no instances of actual confusion and that there was no reference to confusion in the customer reviews for the listing.
The judge held that, given that the defendant’s product would have the same qualities of utility, quality and price as the claimants’, even if the average consumer realised the error as regards trade origin on receipt of the product, the product fulfilled that customer’s requirements. He or she may not therefore complain and there was a real possibility of unreported actual confusion. Moreover, there was a likelihood that an average consumer would consider the product came from Design Elements. Trade mark infringement and passing off was therefore found.
COMPENSATION
The claimants elected to be awarded damages, based on their lost profits in respect of each sale made by the defendant which would otherwise have been a sale by the claimants, an estimated 1,755 flagpoles. The judge decided the net profit per unit sold by the claimants was £14.45 per unit. The judge accordingly calculated the claimants’ lost profits as £14.45 x 1,755 = £25,359.75.
SO WHAT?
This case is good news for brand owners. Even though the claimants’ branding did not appear on its product or in the product listing description on Amazon, and even through there were no photographs of the product in branded packaging in the listing itself, the “By Design Elements” statement in the listing was considered sufficient to amount to trade mark use.
The decision is particularly helpful to any brand owner who sells products where the design of the product is equally as important as the brand, meaning that consumers are often not minded to return a substitute product they have been supplied because it has a utility which satisfies their reason for purchasing the product in the first place.
It is further encouraging that even with incomplete and unsatisfactory disclosure from a defendant on the number of sales made (such disclosure typically always being incomplete), the court was prepared to adopt a very pragmatic and broad brush approach to the calculation of compensation.
The case is also a clear signpost to brand owners that ensuring that its brand name appears in a product listing description and in photographs of the product packaging will increase the prospects of a successful claim. This should encourage defendants to come to a quicker and more prompt settlement of a dispute without litigation being necessary.
The Group is grateful to Melanie McGuirk of Pannone Corporate LLP for this Brand Briefing.

Employee surveillance via IT equipment such as webcam access and screen captures, phones, vehicle tracking and even CCTV is not uncommon in the modern workplace as employers take advantage of developing technologies to monitor employee activities and performance, but in doing so, are they breaching employees’ rights?

Reasons for Covert Surveillance in the Workplace 

There are a number of reasons why an employer may wish to track its employees. Productivity concerns, worries about theft, health and safety, and ensuring activity during business hours is business related are all reasons why this may take place. 

Employers are also understandably concerned about bullying and harassment in the workplace and protecting the reputation of the business externally, so conduct when using company devices such as phones, laptops or otherwise may be monitored for this purpose and many companies now have a Social Media Policy in place which sets out rules about conduct on private social media accounts (such as Facebook, Twitter, LinkedIn, etc.).  

UK Laws on Surveillance 

There are a number of UK laws which are applicable when it comes to surveillance in the workplace, in particular the Regulation of Investigatory Powers Act 2000 and the Data Protection Act 2018.

There is also an implied obligation of trust and confidence between an employer and employee. Acting without proper or reasonable cause so as to damage the trust and confidence between the parties may amount to a fundamental breach of the employment contract, entitling an employee to resign and claim that he or she has been constructively dismissed.   

Employers should also be mindful of the Human Rights Act 1998 which provides individuals with the right to privacy, albeit qualified by various public interest considerations.   

Is Covert Surveillance Allowed? 

In light of the various legal protections, covert surveillance is a problematical issue for employers and should only be undertaken in exceptional circumstances where there is a compelling reason to do so.  An employer who embarks on covert surveillance must be able to demonstrate that the surveillance is necessary and proportionate to protect its business so as to justify the potential breach of employees’ privacy. 

First and foremost, the surveillance must be necessary.  If sufficient information or evidence can be obtained in another, less intrusive way, then surveillance should not be used.

The surveillance must also be proportionate. If hidden cameras are used, employers should consider whether there are any safeguards which can be put in place and make sure that the surveillance is limited so that it goes no further than is absolutely necessary to achieve the purpose for which it is being used.  

For example, an employer who suspects that an employee is stealing from a till should only conduct surveillance of the till area where that employee works during the employee’s working hours, and should not set up covert cameras to cover a wider area or to gather footage from a longer time period, particularly where that may involve surveillance of other employees.

Employees should be notified, usually in a staff handbook or privacy policy, that covert surveillance may be undertaken from time to time and where surveillance needs to be undertaken covertly, an employer should undertake and record a risk assessment for data protection purposes before proceeding with the surveillance. 

For further information about this issue and advice on employment law more generally, please don’t hesitate to get in touch with our expert team here at Pannone Corporate. 

Since the introduction of shared parental leave, there has been considerable debate about whether employers are required to match any enhanced maternity pay package with enhanced shared parental pay. In particular, the concern has been that failing to do so could be discriminatory. Most businesses have taken the view that the correct comparator for a man taking shared parental leave is a woman taking shared parental leave, so provided they are both paid the same when it comes to shared parental pay, there is no discrimination.
However in a recent decision, an employment tribunal has taken a different view. In Ali v Capita Customer Management Ltd the tribunal decided that failure to pay enhanced shared parental pay to a male employee when a woman taking maternity leave would receive enhanced maternity pay amounted to sex discrimination because the purpose of both types of leave is to care for the new born child.
This decision is not binding and as such does not set a precedent that future tribunals must follow. However, it is persuasive and gives an indication of how tribunals may consider such claims going forward.
Our advice to employers is to review your policies and consider whether it would be appropriate to pay enhanced shared parental leave in line with maternity pay – or at least prepare for the possibility of being required to do this in future. This decision is being appealed to the Employment Appeal Tribunal and we hope that an appeal will provide clarity one way or the other.

Commercial fraud is a complex but increasingly common issue which often has extremely damaging consequences for the reputation and financial standing of businesses and individuals alike. Once discovered, it is vital to act swiftly in order to protect assets and maximise recovery.  Where you are facing allegations, it is equally important that urgent steps are taken to robustly defend those claims.  

What is Commercial Fraud? 

Commercial fraud is an umbrella term for a wide range of deliberate actions often of a criminal or dishonest nature. Fraud in itself is not recognised as a single cause of action in English law.  Instead, a claim is likely to encompass a number of aspects, such as:

• Bribery;
• Breach of contract;
• Breach of trust;
• Fraudulent trading or other transactions; and
• Conspiracy.

That being said, this area of law is constantly developing with the courts eager to retain flexibility in how these claims are handled.  Early and effective legal advice will help ensure the most appropriate causes of action are identified.  

Practical Considerations

A commercial fraud claim should not be made lightly.  The courts require significant detail in the pleadings and there is often a reluctance to find that a party has acted fraudulently.  Strong evidence, usually in the form of contemporary documentary and witness evidence, is vital in the prosecution and defence of such claims.

It is also important to consider the impact upon any insurance policies.  Many insurers will not provide cover in respect of dishonest and criminal acts, or may void cover upon receipt of details of such acts.  This may well affect a potential claimant’s ability to recover its losses, but also the personal liability of an individual involved in the fraud.

Businesses should develop procedures to ensure they conduct regular due diligence.  This can help to prevent and detect fraud at an early opportunity, whilst also forming important evidence in any defence of a  commercial fraud claim.

As with any piece of litigation, the parties will be encouraged by the courts to engage in settlement discussions.  These can be a highly effective and cost-efficient method of resolving a dispute. This is particularly so in cases of commercial fraud where confidential information and reputations are often at stake.  

Commercial Fraud Outcomes

A claim arising from commercial fraud will usually seek the recovery of all assets or proceeds diverted by the fraud, along with an order preventing further fraudulent activity.  In certain circumstances, damages may also be awarded, though this is very much dependent upon the facts involved. 

Are you concerned that commercial fraud has occurred in your business dealings? Or is a claim of commercial fraud being brought against you? For more information on how the Pannone Corporate team can help, simply get in touch on 0800 131 3355 today. 

The corporate team at Pannone Corporate has advised Manchester digital company Intechnica on securing a £900k investment package to fund its ambitious growth plans.
Intechnica has received backing from Mercia Technologies PLC (parent company of Enterprise Ventures), Greater Manchester Combined Authority through its Investment Fund and three business angels. It is the third major investment by the funds which first backed the company in 2013.
Founded in 2007, Intechnica’s software, TrafficDefender, helps online retailers deal with surges in demand at peak times such as Black Friday sales. The company, which employs 65 people, boasts customers such as ao.com and William Hill.
Tim Hamilton, partner at Pannone Corporate who advised Intechnica, said: “Intechnica is a long-standing client and a fantastic success story. Its innovative software, TrafficDefender, is a market leader in helping retailers and other businesses prevent the loss of sales and subsequent reputational damage from website slowdowns and crashes. We are delighted to advise on the latest round of funding as the company ploughs ahead with its ambitious expansion plans.”
Intechnica managing director Jeremy Gidlow said: “It is exceptionally pleasing that our investors, who first backed the company four years ago, have once again demonstrated their commitment and belief in our innovative software and global ambitions. Our products and services provide solutions to the challenges of managing and optimising human and non-human web traffic, and this latest investment will help us tap into international markets as well as boosting our client base in the UK.
“We would like to thank the team at Pannone Corporate which has played a pivotal part in helping us secure our development funding.”

Litigation avoidance and resolution typically focus on disputes between businesses. However, litigation and disputes within companies, between their shareholders, can also arise in many ways and deserve some consideration before they do. Such disputes can escalate and have a devastating impact on the operation and success of a business. It is therefore important to plan ahead so that businesses and their shareholders are well-placed to prevent and resolve their disputes in ways which minimise their impact.

Prevention is Better Than Cure 

A well drafted shareholders’ agreement can prevent issues arising in the first place. Starting a business is typically a time intensive venture. At the outset, typically we see that the commercial aims of the business are prioritised over its internal mechanisms. In particular, when businesses are set up between friends or even family no trouble is foreseen for the relationship. However, circumstances change over time and a shareholders’ agreement can prevent problems arising in the future. For example, minority shareholders can find decisions made without their input and, vice versa, a majority of shareholders may find the sale of the company blocked. Without an agreement put into place with respect to shareholders’ powers and rights, resentment and tensions can rise quickly.

A shareholders’ agreement can specify in more detail the positions of the parties and regulate the conduct of the business so as to compliment the company’s articles of association. For example, it can address the necessary requirements for decision making, matters requiring shareholder consent, and the dividend policy of the business. Procedures surrounding the transfer of shares, including pre-emption rights and exit obligations, can also be put into place. The agreement can also include restrictions on the shareholders being involved in other competing businesses. 

Ownership of Business

Disputes can arise in relation to the ownership of businesses, particularly start ups, and alleged promises or understandings about the allocation of shares. These issues tend to come to the fore when a business is successful and there is a dispute regarding who should share in that success. Individuals should document and formalise all their dealings in respect of the ownership of shares, so that there is no dispute in the future regarding the basis on which businesses are owned. 

Address The Issue Early and with Independent Advice

Once a shareholder agreement emerges, it is better to obtain early advice, before the issue becomes more corrosive. Early reference to the shareholder obligations, as contained in a bespoke agreement, can help define the ways in which the parties ought to conduct themselves. More time and money tends to be needed when resolving an issue once it has already escalated beyond an initial concern.  

Independent Advice

It would be sensible to instruct a solicitor who does not act for the company. The company may require its own advice in respect of the issue which is the subject of the complaint and the company solicitor may therefore be conflicted from acting for one of the individual shareholders. 

Dispute Resolution and Mediation

In companies with potential deadlock situations (such as a 50:50 business owned by two shareholders), the parties can be assisted by including in their shareholders’ agreement a dispute resolution clause. A solution should be sought which ensures both parties can continue to work together professionally and for their mutual success. A structured mediation or other alternative dispute resolution procedure can help the parties achieve their objectives. 

If you are worried about a shareholder dispute and the potential impact on your business, please contact our team on 0800 131 3355. 

The corporate team at Pannone Corporate advised the management team at a Greater Manchester biscuit maker which bought out the business in a private equity backed deal.
Hill Biscuits, which is based in Ashton-under-Lyne, can trace its roots back to 1855 when John and Sarah Hill opened a grocery shop at Dukenfield in Tameside.
The business now produces more than 30 million biscuits each week for the retail and foodservice markets. Key products include digestives, ginger nuts, custard creams, bourbons, malted milks and gingerbread men.
The management team, which was led by managing director Steven Wetherby and backed by mid-market private equity house LDC, plans to expand production capacity and grow the business through acquisition.
The deal provides an exit for the Bennett family, which originally bought the business out of Rowntree in 1980.
Mr Wetherby said: “Partnering with LDC will enable us to drive significant investment into the business for the benefit of our customers, adding greater production capacity and innovative new ranges, whilst staying focused on our core offering of quality, value for money products.”
Mark Winthorpe, corporate partner at Pannone Corporate who led the team which included Arshnoor Amershi, said: “The buyout will enable Hill Biscuits to expand its production capacity to meet demand from existing and new customers both in the UK and overseas
“The company has an exciting future and we wish the team every success for the future.”

Arbitration is a form of ADR (alternative dispute resolution). It can be used as a way to avoid court proceedings. If someone has infringed your intellectual property or accused you or your business of doing so, you may be wondering what the benefits of arbitration are versus litigation. If so, it is important to understand exactly what arbitration is as a form of ADR and its effectiveness in relation to IP disputes.

IP Disputes

A dispute can arise in many different circumstances involving various different types of intellectual property, including artistic works protected by copyright, registered and unregistered design rights, trade marks and brands, inventions, trade secrets and know how. 

Parties typically end up in dispute where it is alleged that one party has used or misappropriated the intellectual property of the other without permission, with a view to shortcutting the investment which has been made into the development of the relevant IP. Disputes most often arise between competitors or parties who are (or were) in a contractual relationship relating to the IP (such as licensor and licensee or join venture collaborators).

Arbitration vs. Litigation in IP Disputes

Litigation is the process of a dispute being decided upon in a court of law, by a judge who (in the case of IP disputes) typically has experience of the specialist relevant law. There is a specialist IP court, the Intellectual Property Enterprise Court (IPEC), intended to provide a less costly and less complex alternative to the High Court (which is intended for larger and more complex claims).

Arbitration is when the two parties in dispute agree to appoint a third party arbitrator to resolve their dispute. The arbitration can take on a number of different forms, depending on the issues or the complexity of the case. The parties typically have more flexibility to agree where an arbitration will take place and the rules which will govern the procedure of the arbitration. An arbitrator’s decision is final and binding, and is not usually subject to appeal (in contrast to the position in court proceedings). Arbitration can be less costly than court litigation, and there is an extensive international enforcement regime for arbitration awards which is helpful if your opponent is based in another country.

One advantage of arbitration over litigation is that it is possible to keep the dispute completely private. The confidentiality of both parties is kept during the process. This can be very valuable if protecting the reputation of a business is a priority, as claims of IP infringement or theft can be serious and damaging. In contrast, the owner of the IP may wish the outcome of a decision to be public knowledge, as this forms part of a deterrent for stopping future infringers. 

Arbitration Outcomes

The outcomes sought during litigation are often the same as those awarded through the arbitration process. However, if urgent action is required – such as an interim injunction – then litigation will be the better choice.  In IP disputes, the focus is often on getting an infringer to stop what it is doing, and monetary remedies can be a secondary consideration. The objective typically is to explore a commercial resolution of the dispute through an exchange of correspondence and sensible settlement negotiations.

It is perhaps because of this that arbitration is not commonly used in the UK when it comes to IP disputes. Both parties must agree to an arbitration. If the parties to a dispute are not in a pre-existing contractual relationship (in which arbitration may be incorporated into the contract as an alternative to litigation), such agreement can be difficult to secure when parties are in an adversarial situation and are seeking not to give away any tactical advantage from any potential litigation. 

There are nonetheless certain circumstances where arbitration should not be forgotten as an option, including where your opponent and its assets are based abroad or where there is a cross border element to an IP dispute, in which case arbitration may avoid an argument over which country’s courts have jurisdiction. 

Other forms of ADR, and in particular mediation, enable the parties to reach solutions that are not based on winning or losing, and that promote ongoing commercial relationships. The point is that parties to an IP dispute should always consider whether any form of ADR over and above litigation would better suit their commercial objectives in securing a resolution of that dispute.

For more information regarding your IP and any disputes surrounding it, please get in touch with the team here at Pannone Corporate on 0800 131 3355. 

Communications company Intelling has secured a multi-million pound cash injection from NVM to help fund its ambitious growth plans.
Manchester-based Intelling provides customer services support for companies such as Telefonica and Missguided. The business offers a range of inbound and outbound telemarketing and customer care services, specialising in the business to consumer market.
Headquartered in Manchester with additional premises in Belfast and Burnley, the company currently has around 400 staff and has enjoyed year-on-year growth since formation in 2012.
Pannone corporate partner Tim Hamilton advised NVM on funding will accelerate the development of new business streams and help strengthen the growth of Intelling’s core activity.
Tim said: “We were delighted to advise NVM on its latest investment. Intelling has a visionary and entrepreneurial management team and the cash injection will provide an excellent platform from which to achieve its further growth plans.”
Andy Leach, Investment Partner of NVM, added: “Intelling is an exciting and dynamic communications business and we have been very impressed by the management team, who are extremely well-regarded within the sector and bring a wealth of experience and an excellent track record. In Intelling we are backing an ambitious business operating in a market that has significant growth opportunities.”

Pannone Corporate has published its inaugural Care Report, following a recent Freedom of Information request to the Care Quality Commission (‘CQC’). The purpose of the request was to understand the CQC’s use of its enforcement powers to date, and to identify if there were any developing trends.

In summary, whilst the CQC is taking an increasing amount of enforcement action, its preference to date is to use civil, as opposed to criminal, sanctions. That being said, the CQC’s Chief Executive has recently indicated that the organisation is preparing to potentially initiate more prosecutions in the future, with a decision on enforcement pending in around 220 investigations.

In light of this indication it is imperative for care providers to ensure that health and safety is treated as a business priority, and to seek early and expert legal advice should they be investigated by the CQC.”

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The real estate team at Pannone Corporate has advised Viva Blackpool in its bid to transform the former Harry Ramsden’s site into the Viva Vegas Diner on Blackpool’s Golden Mile.
The new venue will see the multi-award winning business expand its offer and creating 25 new jobs.
Development work on the Viva Vegas Diner is already underway with a total investment of £1.2m being poured into the new venue, staff development and the existing business.
Martin Heywood, Managing Director of Viva Blackpool, said: “We’re delighted to be expanding with this new venue and investment which is going to create new high quality jobs for local people.
“We’re all about championing Blackpool and providing an exceptional visitor experience to our customers so to have the chance make our mark on Blackpool’s iconic Golden Mile is fantastic.”
Viva Blackpool was opened in 2012 by Blackpool based entrepreneurs Martin Heywood and Leye D John’s, the venue’s host, Entertainment Director and Lancashire Tourism Superstar 2016, and has since gone from strength to strength employing over 65 local people and hosting shows 365 days of the year.
The new venue has been made possible with support from NatWest Corporate & Commercial and Manchester based Pannone Corporate Solicitors.
Gareth Birch, senior associate at Pannone Corporate said: “I have been working with Martin and Leye since they came up with the concept for Viva Blackpool, and I have been delighted to watch them establish what is now a major attraction in Blackpool.
“I am looking forward to seeing them create another high quality venue which will no doubt benefit both the tourism industry and the local community across Blackpool and the wider Fylde Coast area.”
The Viva Vegas Diner will open this May and more information will be revealed over the coming weeks. For more information or to register for updates visit www.vivavegasdiner.com

FOOD LAW CASE UPDATE:

ALLERGEN MANAGEMENT

Mohammed Abdul Kuddus v The Queen [2019]

Background

Mr Kuddus was the sole director and owner of RS Takeaway Limited, a company that traded in Oswaldtwistle, Lancashire and was known as “Royal Spice”.  He had bought the business in November 2015, from Harun Rashid, who in turn had owned it since December 2014.

As at 30 December 2016, Messrs Kuddus and Rashid worked at Royal Spice together.  Mr Kuddus was the Head Chef, whilst Mr Rashid’s role was unclear in that there was a dispute as to whether he was the restaurant manager or a delivery driver.

Facts

On 30 December 2016, two teenage friends Megan Lee and Katie Bracegirdle, ordered a takeaway from the Royal Spice.  Their order was placed through the third party website, Just Eat.  That order included a Peshwari naan, an onion bhaji and a Seekh kebab.

The Just Eat platform invited customers to leave a note for their chosen restaurant.  In this case, Katie Bracegirdle entered “nuts, prawns”.  This was done on behalf of Megan Lee, who had what she thought was a mild allergy to a number of foods including peanuts.

The website would then have presented a further link, which said “do you have an allergy or other dietary requirements?”.  Clicking on this link would have provided further dietary and allergy advice and presented the customer with three options, the first of which was “we strongly advise you to contact the restaurant directly before you place the order”.  It is not known whether Katie and Megan clicked on this link but no direct contact with Royal Spice was made.

Royal Spice received a print out of the order at its Just Eat terminal.  The order, including the note about nuts and prawns, was seen by Mr Rashid.  There was no evidence that Mr Kuddus who was working in the kitchen, ever saw it.

The food delivered to Katie and Megan contained peanut protein despite the comment entered at the point of order.  Upon eating the kebab, Megan suffered an allergic reaction that was initially mild.  She took an antihistamine and, having begun to feel better, continued to eat the meal albeit avoiding the kebab.

For a while Megan suffered no further reaction and did not appear to be in any discomfort when collected from Katie’s house by her Mother.  However, shortly afterwards, she became distressed, more severe allergic symptoms became apparent and she was struggling to breathe.  An ambulance was summonsed but despite the best efforts of her Mother and the medical professionals, Megan suffered irreversible brain damage and her life support was withdrawn a few days later.  The Post Mortem concluded that the cause of death was a fatal asthma attack precipitated by an allergic reaction to nuts.

Megan’s allergy

Megan was generally healthy but suffered with asthma, which was described as “quite bad”.  She had been aware of her nut allergy for several years but having undergone testing and on medical advice had thought it to be mild.  A doctor had advised she take antihistamines but she had never been prescribed an EpiPen nor had she been referred to a specialist.  She had never had a severe reaction before and there was nothing in her medical history to suggest the advice given on allergy management was wrong.  Both she and her parents understood her allergies to be mild and had never been aware that they might lead to her death.

In evidence at the trial, an expert witness confirmed that the tests Megan had undergone would not actually diagnose allergies and laid bare the uncertainties that surround this area of medical practice.  In particular, doctors still do not fully understand how the test results relate to the severity of any likely reaction.  In short, a positive test result is a warning but it is difficult to predict how each individual patient will react when presented with the problem allergen.

When ordering the takeaway in December 2016, Katie Bracegirdle gave evidence that Megan had not initially wanted to add any notes to the Royal Spice.  Katie gave evidence that Megan said, “it doesn’t matter, it’s not a big deal, I don’t have an issue”.  When pressed by Katie to enter a note on the Just Eat system, Megan suggested adding “nuts and prawns”, which her friend did. 

Food safety management at the Royal Spice

The evidence showed that no Hazard Analysis and Critical Control Point (HACCP) procedures were in place or implemented at the Royal Spice.  Whilst the restaurant had implemented the “Safe Food, Better Business” system, it had not done so fully.  There were no written procedures for allergen management and staff had a limited understanding of the issue.  There appeared to be no understanding of the risks presented by cross-contamination or by allergen warnings on pre-packaged ingredients.

The Local Authority had previously written to all food businesses in the area advising of approaching changes in the law and giving advice as to the need to communicate the presence of allergens within dishes to customers.  Despite this the Royal Spice menu contained no information regarding ingredients, simply stating “think allergy” and “please ask a member of staff”.

The criminal case

Following an extensive investigation by the Police and Hyndburn Borough Council, charges were laid against Royal Spice, Harun Rashid and Mohammed Abdul Kuddus:- 

• Royal Spice, Mr Rashid and Mr Kuddus were charged with breaches of the Health and Safety at Work etc. Act 1974 and under the Food Safety and Hygiene (England) Regulations 2013 (the Regulatory Offences); and

• Messrs Rashid and Kuddus were alleged to have committed gross negligence manslaughter.

Royal Spice and Mr Kuddus pleaded guilty to the Regulatory Offences before trial, whilst the jury convicted Mr Rashid in respect of those matters.  Both men were convicted of manslaughter by a jury at Manchester Crown Court and both received custodial sentences in relation to their manslaughter convictions but also in respect of their part in the Regulatory Offences. The Royal Spice was fined £550, which probably reflected an inability to pay a higher financial penalty.

The appeal

Mr Kuddus launched an appeal against his manslaughter conviction and sentence.  He said that he had never seen the “nuts and prawns” note attached to the order and that whilst he accepted he was ultimately responsible for ensuring that the Royal Spice operated in accordance with food safety legislation, this was not sufficient for a manslaughter conviction.

Gross negligence manslaughter is committed when an individual negligently breaches an existing duty of care in circumstances in which it was reasonably foreseeable that the act or omission would give rise to a serious and obvious risk of death.  The breach must cause the death and must be “truly exceptionally bad and so reprehensible” that it justifies the conclusion of gross negligence and the resulting criminal sanctions.

Counsel for Mr Kuddus argued that whilst his client was responsible for food safety management at the Royal Spice, inadequacies in that regard were not enough to convict him of the more serious manslaughter offence.  Whilst limited companies such as Royal Spice are often considered to have imputed knowledge in respect of regulatory matters, it would be wrong to approach a manslaughter case against an individual in this way.

The Court of Appeal agreed, noting that “the fact [Mr Kuddus] was the sole director of [Royal Spice] placed on him the duty of ensuring that appropriate systems were in place to avoid the risk that a customer with a declared allergy was not served food which contained the allergen”.  The risk was that a customer would place and be served an order, which the system should have been designed to prevent.  This is not the same as there being an obvious and serious risk of death.

There was no evidence Mr Kuddus had seen the note about nuts and prawns and so could not have foreseen an obvious and serious risk of death might result from the food he prepared.  The Court of Appeal therefore determined that the conviction for manslaughter could not stand.

Impact for the retail catering industry

In its judgment, the Court of Appeal made a number of important points that should be considered by all those in the sector:-

• The breach of duty in this case was the service of food containing a specific allergen to a customer who had flagged that allergen at the point of ordering.  Much was made of Megan’s medical history and the apparent understanding that her allergies were “mild”.  However, the Court said that cases should be judged based on what was known at the time of the breach.  What Mr Kuddus and his lawyers later understood about Megan’s medical history was therefore not relevant.  The duty was owed to allergy sufferers as a class.

• A possibility that a set of circumstances may be life threatening is not the same as an obvious risk of death.  An obvious risk is a clear and present danger, which is unambiguous.  The Court concluded that Mr Kuddus could not have foreseen such a risk in this case as he had not seen the note.

• The requirements of general food law are material to the steps that a restaurant or other food service provider could be expected to take in a given situation.  However, that alone does not define the duty owed to each individual customer.  That is determined by the circumstances of each case.

• In relation to allergens that might harm particular groups of customers, the scope of the duty “may well extend to identifying by warning in a menu or otherwise the presence of such allergens in food, with the request that notice be given to the restaurant if, in a particular case, such an allergen is likely to cause harm”.

• Whether a business chooses to issue such a warning or not, if a customer tells a restaurant about a harmful allergy, the scope of the duty may extend to operating a system either to ensure that the identified allergens are not provided or to warning the customer that food meeting their requirements cannot be provided.

• Importantly, if the customer does not alert the business to the harmful allergy, it is difficult to see how the duty could be extended to require the exclusion of all potential allergens in the food provided.

• Whilst Mr Kuddus was acquitted of manslaughter, his convictions for the Regulatory Offences remained.  The Court was very clear that the manslaughter acquittal did not mean that restauranteurs could ignore their responsibilities simply by ensuring that they were not armed with information regarding individual orders or customers with specific allergies.  Unless there is a system in place, criminal convictions for regulatory offences can and will result.

• Equally, the acquittal does not mean that individuals cannot be convicted for a failure to introduce proper systems that protect customers.  Mr Kuddus’ lack of knowledge in this particular case cannot be used by those managing food service businesses to avoid liability at the expense of customer facing employees.

The Court concluded by noting the increased awareness around the potential risks to allergy sufferers in the context of food service, saying, “it should be understood that the courts will rigorously scrutinise the way in which restaurants discharge the duty of care that they owe to such customers”.

Comment

This case is just the latest in a line of sobering reminders of the importance of effectively implemented controls for allergen management.  As we continue to learn more about the impact of such conditions, regulatory scrutiny in this area will only increase.  And whilst the Court was sympathetic to the limits of Mr Kuddus as an individual given the particular facts of this case, the judgment makes it clear that the manner in which food businesses manage safety and hygiene will be closely scrutinised and that significant criminal penalties can and will follow where regulatory failings are exposed.

The expert evidence at the trial showed that teenagers and young adults predominate in studies of fatal allergic reactions.  The majority of severe non-fatal allergic reactions also occur in this age group, perhaps because they are young people transitioning to independent living and learning to manage allergies without parental oversight.  Megan Lee was just 15 years old when she died.  If your business typically targets or serves people within this demographic, additional controls may be required. Businesses in the food service sector should regularly review their allergen management strategy to ensure it remains current, both in respect of the organisation itself and current guidance.  Regular refresher training for customer facing employees is vital as is ongoing due diligence in respect of the supply chain. Remaining abreast of changes in the law and available guidance is also key.

What’s new

This month we look at new European legislation on the horizon to protect whistle-blowers and gig economy workers, HMRC guidance on the new off-payroll working rules, and proposals for the extension of redundancy protection for new mothers. Read more

Case law review

Discrimination on appeal In a recent decision, the Employment Appeal Tribunal has made it clear that the appeal stage is part and parcel of a dismissal when it comes to assessing whether that dismissal is discriminatory.  Read more

Keeping records of working hours In a potentially important decision, the Court of Justice of the European Union has held in Federación de Servicios de Comisiones Obreras v Deutsche Bank SAE that employers must keep records of all time actually worked by staff each day. Read more

Discretionary bonus payments

The EAT in the case of Bluestones Medical Recruitment Ltd v Swinnerton has provided a useful reminder of the limitations on seeking to insist contractual bonus schemes are discretionary when they have been in place for a prolonged period. Read more >

Compensatory rest In the case of Crawford v Network Rail Infrastructure Ltd, the Court of Appeal confirmed that an employer has complied with its obligation to provide a 20 minute rest break to workers by adding together two or more rest breaks of shorter durations. Read more >

Who to contact:

JACK HARRINGTON HEAD OF EMPLOYMENT 0161 393 9050 Email Jack

The corporate team at Pannone Corporate has advised tool hire company Supply UK Group on its acquisition by Dutch counterpart, Boels Rental.
Stockport-based Supply UK, which was founded in 1998 and operates from 25 locations across the UK, was bought by Boels for an undisclosed sum.
Supply UK Group managing director Chris Haycocks will continue to lead company which will be rebranded as Boels.
He said: “Boels investment will enable us to offer an ever-increasing selection of new equipment during our next phases of growth.”
Corporate partner Mark Winthorpe led the Pannone Corporate team which advised the shareholders of Supply UK. He was assisted by Andrew Walsh and Brogan Pani.
Mark said: “The dynamic management team at Supply UK has grown the business into a leader in the tool hire industry and the acquisition by Boels will enable it to further develop its services and reputation for providing the highest level of customer service in the sector.”
Ed Brentnall of Dow Schofield Watts carried out financial due diligence and Mike Blood and Sara Bluston of JMW provided legal advice to Boels.
Media Enquiries
Sheryl Moore
Email: sheryl.moore@pannonecorporate-com.stackstaging.com
Tel: 07990 805311

Issues surrounding individual service users’ rights to liberty and security, and the extent to which these may conflict with their care needs, have been a source of ongoing concern for care providers for a number of years.

Although the last decade has already seen legislative changes, court rulings and judicial commentary, further revisions have recently been enacted as a result of the Mental Capacity (Amendment) Act 2019, which received Royal Assent on 16 May.

Development of the Deprivation of Liberty Safeguards

Article 5 of the European Convention on Human Rights (ECHR) confirms the right of every person to liberty and security of their person, and prevents their unlawful detention. Deprivation of an individual’s liberty is however permitted in specified circumstances, including where the detainee is of an ‘unsound mind’ (Article 5(1)(e)). Any such detention must be undertaken, “in accordance with a procedure prescribed by the law.”

This right was incorporated into English law by (amongst other legislation) the Mental Capacity Act 2005, which permits the deprivation of an individual’s liberty if that person lacks capacity. The relevant test being whether, “at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.” The Act required any measures imposed to be in the best interests of the person who lacks capacity.

Despite the provisions of the Mental Capacity Act, the European Court of Human Rights considered in the Bournewood case that there remained a lack of procedural safeguards for those deprived of their liberty, as required by Article 5. For example, it considered that there was a lack of clarity as to who was able to authorise deprivations, and where responsibility rested for undertaking continuing clinical reviews and assessments once someone had been deprived of their liberty.

To address the ‘Bournewood gap’ the Deprivation of Liberty Safeguards (‘DOLS’) were introduced in 2009 as an amendment to the Mental Capacity Act, and prescribed the procedure by which impositions on liberty were to be authorised by the state. The Safeguards however only applied to deprivations occurring in hospital or registered care/ nursing homes, with any deprivation outside of these settings only capable of being authorised by the Court of Protection.

Further changes came in 2014 when the Supreme Court widened the interpretation and scope as to what may amount to a deprivation of liberty and decided in the case of P v Cheshire West that all those who were:

1. under continual supervision and control; and
2. lacked freedom to leave the place where they lived

were being deprived of their liberty. This wide definition conceivably included any measures taken which adversely affected an individual’s freedom, but which were otherwise deemed to be in that individual’s best interests. The potential for routine residential or nursing care to fall within this definition was therefore significant.

Practical Implications
Any deprivation imposed outside the prescribed DOLS procedure ran the risk of amounting to an unlawful deprivation of liberty, with all the consequential financial and legal implications flowing from this. The incentive for care providers on a day to day basis therefore was to err on the side of caution and apply for authorisation in every instance that restrictions were required, in order to avoid being accused of an unlawful deprivation. This cautious approach (which had been expressly endorsed by the Court in P v Cheshire West) resulted in an exponential increase in the number of DOLS applications submitted. The sudden increase in the number of submissions created a significant backlog of pending decisions within local authorities which often took many months, if not longer, to be considered and returned.

In addition to the increased turnaround time for submitted applications, criticisms were also raised that the authorisation process itself was overly bureaucratic and convoluted. For example, the 2013- 14 report of the House of Lords Select Committee on the Mental Capacity Act 2005 was critical of the procedure and considered that vulnerable adults were being failed by an Act which had been designed to protect and empower them, with many individuals likely being deprived of their liberty outside the protection of the law. The report considered that the existing legislation was, “not fit for purpose.”

As a result of the above criticisms and increasing delays within the authorisation system the Law Commission was requested to review arrangements, its report being published in March 2017. In summary the Commission recommended that the DOLS system be replaced as it was, “overly technical and legalistic, and too often failed to achieve any positive outcomes for the person concerned or their family.” It also considered that the best interests assessment often merely rubber stamped the decision already taken by the relevant care team, with the implication that the DOLS process was, “not really a safeguard.”

The Commission concluded that Article 5, “must be practical and effective. It is not acceptable to continue with the current system where many people’s rights have become theoretical and illusory,” and recommended that the DOLS scheme be replaced with a new regime – the Liberty Protection Safeguards (‘LPS’). The LPS were proposed as a system of ‘protective care’ to sit alongside and compliment the existing health and social care system and to streamline the process of obtaining authorisations, as opposed to imposing an additional layer of bureaucracy.

The Commission proposed that the LPS include: enhanced rights to advocacy; periodic checks on the care arrangements of those affected; greater and more express consideration of an individual’s human rights; and whether a deprivation of their liberty is necessary and proportionate.

Mental Capacity (Amendment) Act 2019
Following the Government’s positive response to the Commission’s report in March 2018, in July 2018 the Mental Capacity (Amendment) Bill was published which broadly sought to implement the Commission’s recommendations and proceed towards a system of Liberty Protection Safeguards. It should be noted however that the Act now in force does not refer to the phrase ‘liberty protection safeguards.’

Despite having now received Royal Assent, the draft Bill was subject to a number of revisions prior to its commencement. For example, the Law Commission suggested that responsibility for securing the authorisation (and treatment) which deprived individuals of their liberty in private care should rest with the relevant registered care manager. Concerns were however raised within the sector in terms not only that managers may lack the necessary training to determine such issues, but also that this process could place home managers into a conflict situation, having to consider granting an application for an individual in a home for which they were responsible.

Whilst revisions have reduced the role of home managers from the Commission’s initial suggestions, the Act still requires home managers to identify those who may lack capacity and whose care requires them to be restricted. As such the potential for a conflict of interest to arise remains.

Likewise, the Act replaces the Law Commission’s initial suggestion that deprivations required someone to be of ‘unsound mind’ with the requirement that they have a ‘mental disorder.’ Pending introduction of codes of practice and guidance, this change could easily lead to satellite litigation as courts attempt to interpret the provision in a manner which is compliant with Article 5 (which itself refers to ‘unsound mind’).

The Act also introduces other changes which mark a departure from both the previous Deprivation of Liberty Safeguard regime and the Law Commission’s initial proposals. For example:

• The distinction between deprivations within a care setting and elsewhere has been abandoned, with one process applicable across all providers (private and public);
• Applications can now be submitted in respect of anyone aged over 16 years, as opposed to the previous minimum age of 18;
• An express requirement that service users be consulted in relation to any proposed restrictions. The extent to which a service user with advanced dementia is capable of expressing an informed view is however questionable;
• Removal of the requirement that an authorisation must be in an individual’s best interests. The Act requires that arrangements are necessary to prevent harm to the cared-for person and are proportionate in relation to the likelihood and seriousness of harm to that person; and
• Authorisations are to last for an initial period of 12 months. Subsequent renewals thereafter may last for up to three years before further review is required, therefore tripling the current amount of time that people can be deprived of their liberty without re-assessment.

Conclusion
The changes contained within the Mental Capacity (Amendment) Act 2019 are on the whole to be welcomed, on the basis that they attempt to simplify and clarify a regime which had evolved as a result of numerous legislative provisions and discrete decided cases.

It is also to be hoped that the new Liberty Protection Safeguards not only assist care providers with the practical day-to-day administration of deprivations, but ensure that any such restrictions also serve the needs and requirements of those most affected – the service users.

It is International Women’s Day………and only four weeks until the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 come into force, introducing an obligation on all voluntary and private-sector employers with 250 or more employees to record and publish their relevant gender pay gap statistics.
The deadline for publication of the first gender pay gap reports is not until 4 April 2018, however the first “snapshot date” – the reference date for measurement of the relevant statistics – is only 4 weeks away, on 5 April 2017.
Will your business employ 250 plus employees on 5 April 2017? If so, read on!
Given the scope for reputational damage or even for staff to use their employer’s gender pay gap figures to support claims of sex discrimination or equal pay, it is crucial to consider how you present your statistics. Remember, gender pay gap reports must be published on the company’s website in a manner which is accessible to all employees and the public in general, and kept online for three years.
The Regulations allow employers to publish a voluntary narrative to accompany their figures, which means there is an opportunity for you to provide an explanation for any pay gap, publish further statistical evidence to support that explanation, and set out the steps you intend to take or have already taken to address that pay gap.
The sooner you start to analyse your pay gap data, the better placed you will be to address any major issues in advance of publication and to provide a positive narrative in your first gender pay gap report.
If you have any questions about the new gender pay gap reporting duty or how to present your figures in the best possible light, please contact
Fiona Hamor
Partner
0161 393 9049
fiona.hamor@pannonecorporate-com.stackstaging.com

The first quarter of 2019 saw an inspection blitz by the Health and Safety Executive (HSE) on the food manufacturing sector.  As the industry recovers from this increased intervention we have also seen, quite coincidentally, a number of high profile prosecutions culminating in yet more seven figure fines. 

Associate Partner Rhian Greaves looks behind the headlines at the common risks the industry must manage and the reality behind the press reports.

The industry

Defra’s most recent national statistics demonstrate the importance of the food sector to the national economy.  Employing 12% of the workforce at the last count, it has seen a 1% increase in employee numbers over the year to the first quarter of 2018.

More specifically in food manufacturing, the proliferation of SMEs is striking comprising 97% of businesses in the industry covering 28% of employment and 19% of turnover.

Whilst the scope for growth in the sector is limited by consumer intake capacity, its economic and social impacts cannot be underestimated.

What are the risks?

As many food manufacturers know, there is a well rehearsed list of 12 risks that between them are responsible for 96% of injuries to those working in the sector.  They are:-

1. Interactions with machinery, particularly the absence of guarding.
2. Workplace transport.
3. Work at height.
4. Entry into silos and confined spaces.
5. Slips and trips on wet and contaminated floors.
6. Being struck by objects and knives.
7. Manual handling.
8. Work related upper limb disorders.
9. Occupational dermatitis.
10. Occupational asthma.
11. Noise induced hearing loss.
12. Work related stress.

The HSE’s document, “A Recipe for Safety” (http://www.hse.gov.uk/pubns/priced/hsg252.pdf), states quite simply, “managing these 12 issues in your company will significantly reduce injuries, ill health and the associated costs”.

What does the enforcement picture look like?

Perhaps mindful of the continuing push to put the “health” back into health and safety, the recent HSE inspection initiative concentrated on occupational asthma caused by exposure to flour dust, along with musculo-skeletal disorders.  And whilst the published outcomes from that initiative are awaited, there will no doubt also have been an increased incidence of enforcement action relating to the more familiar safety issues listed above.

Looking at the prosecution picture, we see this theme continuing. Of the six cases involving fines exceeding £1m:-

• three involved falls from height;
• two stemmed from guarding issues; and
• one was a fatality caused by falling objects.

When we look further into other reported cases, we see a litany of accidents around vehicle movements, absent or inadequate guards and moving machine parts, justifying the focus on the “list of 12”.

What is the cost?

As an industry, food manufacturing comprises a wide range of sectors and activities with many common themes but also each with its own risks and concerns.  The prevalence and profile of these businesses and the brands they have to protect give the impression, at least, of a target industry perhaps more prosecuted than others.  However, an analysis of the very highest fines handed down across all industries shows that construction, general manufacturing and retail and logistics businesses appear with a greater frequency.

Where food manufacturers are prosecuted, we generally see the highest penalties imposed on the familiar consumer brands but even so, the fines do not come close to representing 1% of turnover for those household names.

For those in the SME space, we see them faring far better than their counterparts in construction and care, for example, where the new sentencing guidelines created a squeezed middle in which smaller businesses were deprived of a far greater proportion of turnover in the punishments imposed.  In food however, that does not appear to be the case, with our analysis suggesting that fines have broadly occupied 0.01% through to 1% of turnover (when compared to 1.5% – 3.75% for construction SMEs in the year to February 2017).

What next?

We await the outcome of the HSE’s New Year inspection blitz with interest; quite how much enforcement centred on the health aims identified at its inception as opposed to focussing on the more obvious safety concerns will be telling.

For the sector as a whole, the signs are encouraging.  Since the introduction of “Recipe for Safety” in 1990, the industry has seen a 55% reduction in its combined injury rate and a 40% drop in major injuries.  With continuing active industry participation and special health and safety interest groups, the direction of travel is positive.  The challenge ahead for this industry (as for all others) is to improve upon safety performance whilst also meeting the challenges presented by adverse health impacts, not least work related stress and asthma and other long-term conditions.

A report by the All Party Parliamentary Group (APPG) on intellectual property was released at the end of February 2017. The report considered the emerging threats in the field of intellectual property (IP).
The APPG recognised that technology is continuing to increase the opportunities for infringement which is making enforcing IP rights more challenging for IP owners. The threats the APPG identified included stream ripping (where individual creates a permanent download of a song or video played on a streaming service) and substitute selling.
Substitute selling is the process by which individuals or companies advertise products under existing listings on online sales platforms such as Amazon or eBay. Instead however of supplying the branded product which is advertised in the listing, infringers supply an alternative, substitute branded product or generic unbranded product.
This results in a loss of sales for the brand owner and a loss of control over the brand, and is unlawful.
We have been working closely with the British Brands Group to bring this issue to the attention of brand owners and the government. It is encouraging that this problem (which is experienced by many of our brand owner clients) has been recognised by the APPG and we hope that this recognition will result in effective solutions at government level.
If substitute selling is a problem faced by your business please do not hesitate to contact us to discuss how we might be able to assist.

What’s new

This month we look at changes to the apprenticeship levy, new legislation under the Good Work Plan, the updated Home Office Code of Practice on the prevention of illegal working, and the latest ET statistics. Read more

Case law review

Discrimination by mistake? In the recent case of iForce Ltd v Wood, the EAT considered a claim of disability related discrimination arising out of the claimant’s mistaken belief that her working conditions were damaging her health. Read more

Disciplinary hearings and police investigations In North West Anglia NHS Trust v Gregg the Court of Appeal found that an employer does not need to wait for a police investigation to conclude before chairing a disciplinary hearing. Read more

Reasonable adjustments In the recent case of Linsley v HMRC the EAT considered the issue of reasonable adjustments with reference to the provision of a dedicated parking space for a disabled employee. Read more

Dismissing an employee on long term disability benefit In ICTS (UK) Limited v Visram the EAT decided that accordingly to the wording of the relevant policy an employee was entitled to compensation for loss of entitlement to benefits under a permanent health insurance policy despite the fact he might be fit to carry out other full-time duties. Read more

Explaining away discrimination In Iwuchukwu v City Hospitals Sunderland NHS Foundation Trust the Court of Appeal rejected an argument that a complete, non-discriminatory explanation for the Trust’s actions excluded the possibility of a successful discrimination claim. Read more

Katie Hopkins has been ordered to pay £24,000 in damages and £107,000 on account of Jack Monroe’s legal costs following a libel case relating to comments published on twitter.
The case concerned online comments made by journalist, Laurie Penny that she did not have a problem with the vandalising of a Memorial to the Women of WWII in Whitehall which occurred when an anti-austerity demonstration in London turned violent.
On 18 May 2015, Hopkins mixed up Penny with blogger, Jack Monroe when she tweeted: “@MsJackMonroe scrawled on any memorials recently? Vandalised the memory of those who fought for your freedom. Grandma got any more medals?” The tweet was deleted around 2 hours and 25 minutes later. However, Hopkins then went on to post a second tweet later that evening to ask “Can someone explain to me – in 10 words or less – the difference between irritant @PennyRed and social anthrax @Jack Monroe”.
In the court decision handed down on 10 March 2017, the judge found that both tweets were defamatory of Monroe and caused serious harm to her reputation. The judge held that Monroe was entitled to fair and reasonable compensation and ordered Hopkins to pay damages of £16,000 for the first tweet and £8,000 for the first tweet.
Hopkins, like many others, appears to believe that there is an unfettered freedom of speech across interactive social media platforms, such as twitter. She describes herself in the case as “confrontational, outspoken, forthright, often outrageous and frequently flippant in her journalism and social media activity, and very known as such”, perhaps to make the point that people are accustomed to her journalistic style and that her social media postings would not in fact have caused any real harm to Monroe’s reputation.
In its decision, the court recognised the conversational nature of twitter as a social media platform. However, it also recognised that the publication of a tweet has a far greater reach than a private conversation between two people, and that a tweet may be no less transient than a print newspaper article and no less powerful than a live television broadcast. In this case, the court accepted that Hopkins’ tweets were likely to have been seen by at least 20,000 internet users, before even taking into account the reposting of the tweets by other twitter users and media outlets.
In all the circumstances, the court was satisfied that the tweets had caused Monroe real and substantial distress and had caused sufficient harm to her reputation to satisfy the statutory threshold for serious harm.
This is the first time that the court has been asked to consider the “serious harm” test under the Defamation Act 2013 in the context of twitter postings. The decision provides an important and timely reminder of the court’s willingness to treat defamatory postings across social media as seriously as publications in more traditional print mediums. As this case shows, tweeting (or even retweeting) a defamatory statement can have very serious and costly consequences, both for the publisher and for the target of the tweet.

The corporate teams at Pannone Corporate and KJG Chartered Accountants have advised entrepreneurs Rob Garbutt and Paddy Doyle on the sale of their company, LDeX, which operates data centres in Manchester and London.
LDeX has been bought by Glasgow-based AIM-listed Iomart Group for an undisclosed sum.
The deal comes eight years after the pair sold their first data centre business, UK Grid, which was founded at Manchester Science Park in 2004, to Telecity Group for £11.7m.
Pannone Corporate partner Tom Hall and KJG partner Steven Lindsay advised Rob and Paddy on the latest sale.
They also advised the pair on the sale of UK Grid in 2011.
The Pannone team for the sale to Iomart also included Amy Chandler and Miranda Foy.

Rob and Paddy founded LDeX in 2012 following the Telecity Group buyout and provides data centre services.
Iomart Group is one of the UK’s leading providers of managed cloud services.
Tom said: “It has been a real pleasure to have advised Rob and Paddy on another fantastic deal. Once again, the pair has built up a leading data centre business which has proven to be an attractive target to a leading plc.
“Their track record of successful exits is a true testament to their hard work and ability, and we were delighted to work with them again.”
Steven added: “This is another example of an owner-managed business run by excellent entrepreneurs. To do what Rob and Paddy have done once is excellent, to do it twice is exceptional.”
Rob said: “Tom, Steven and their teams have worked with Paddy and me for many years. They have helped us achieve growth that led to the successful sales of both UK Grid and LDeX.”

Pannone Corporate’s HR Forum is a free regular update for employers and HR professionals, featuring sessions on employment case law, legislation and topics of interest to those involved in managing a workforce or dealing with HR issues.  In our next HR Forum, we will cover:
Protecting your Business
Building and maintaining a successful business involves time and effort so the last thing you want is for a rogue employee to damage or even destroy any part of that business, whether by enticing away customers, interfering with suppliers or referrers, or stealing confidential information or intellectual property. Unless however you think about the protection you might need right at the start of a relationship with a new staff member you may find that when the relationship comes to an end your ability to protect the business is limited.  In this HR Forum, we will discuss how you can protect your business from wrongdoing on the part of your current staff and unfair competition from staff who have moved on, including a look at the latest cases involving LinkedIn and other social media.  This session will be of particular interest to HR professionals, senior managers, and business owners.
Case Law Update
A summary of some of the more important or interesting decisions coming out of the tribunals and courts in the last few months, including decisions dealing with the employment status of people working in the “gig economy”, when work related stress is not a disability, and the latest decision on commission and holiday pay.
Legislation Update
An overview of the legislation on the horizon for 2017, including gender pay reporting, the apprenticeship levy, and changes to the rules on business immigration.

Event details:

When: Wednesday 1 March 2017
Where: Innside Manchester, First Street, Manchester
Click here for further details
Time: 8.30am registration, 9.00am start,12pm ends
Cost: Free
To express your interest in attending, please RSVP by email to:
paula.kershaw@pannonecorporate-com.stackstaging.com
 
If you have any queries please contact Fiona Hamor on 0161 393 9049 or email:
fiona.hamor@pannonecorporate-com.stackstaging.com

As much as 85% of marine litter is plastic. Largely comprising single use items and fishing gear and found on the beaches of Europe, plastic pollution of our seas and oceans was highlighted in shocking technicolour by the famous Blue Planet episode in which Sir David Attenborough examined human impacts on the marine environment. 

In an attempt to start to tackle the problem, the European Parliament recently approved a Directive to reduce the impact of certain single use plastic products on the environment. Coming into force once published in the Official Journal, the Directive classifies categories of products and creates an objective for each grouping it makes. 

Reinforcing well understood concepts of producer responsibility and the waste hierarchy, the Directive aims to achieve a circular life cycle for plastics. It encourages the retention of value in products and materials for as long as possible, so generating less waste with a view to economic benefits being felt through the reduction of pressure on precious resources and the environment. “Plastic products should be manufactured taking into account their entire lifespan. The design of plastic products should always take into account the production and use phase and the reusability and recyclability of the product” (recitals to the Directive).

Which products are covered?

Aimed at single use plastics, the Directive defines these as products, “made wholly or partly from plastic and…not conceived, designed or placed on the market to accomplish, within its lifespan, multiple trips or rotations by being returned to a producer for refill or reused for the same purpose for which it was conceived”.

The Directive sets out eight objectives, identifying which products are to be caught by each of its requirements as follows:-

1. Complete ban: Member States are to prohibit the placing on the market of the products listed and those made from oxo-degradable plastic. This applies to cotton bud sticks, cutlery, plates, straws, stirrers, balloon sticks and polystyrene food trays, cups and beverage containers.
2. Consumption reduction: Member States are to take necessary, proportionate and non-discriminatory measures to achieve an ambitious and sustained reduction in the consumption of drinks cups (including covers and lids) and take away food containers. Within two years, Member States are to publish the measures they have adopted before integrating them. An ongoing requirement to monitor and report on the effects on the market is also included. 
3. Product design: drinks bottles (including caps and lids) and composite beverage packaging can only be placed on the market if those caps and lids remain attached to the product during intended use.
4. Product design: from 2025 PET bottles must contain at least 25% recycled plastic and at least 30% from 2030.
5. Product labelling: sanitary towels, tampons and applicators, wet wipes, drinks cups and tobacco products with filters must bear a conspicuous and clearly legible and indelible marking on the packaging or on the product itself informing consumers of the appropriate waste management or disposal options in line with the waste hierarchy, the presence of plastics in the product and the resulting negative impact of littering or inappropriate disposal on the environment.
6. Extended Producer Responsibility: must be established for the listed products with producers to cover the costs, which include the costs of awareness raising measures; waste collection for products discarded in public collection systems; and cleaning up resulting litter from the products. This applies to take away food containers, flexible packaging materials used for takeaway food, drinks bottles (including caps and lids), composite beverage packaging and drinks cups.
7. Separate collection: Members States are to take necessary measures to ensure separate collection for recycling of drinks bottles (including caps and lids) and composite beverage packaging. This includes a 90% separate collection target for plastic bottles by 2029 (77% by 2025). This may also include the creation of deposit refund schemes or separate collection targets for the extended producer responsibility schemes. 
8. Awareness raising: an obligation to inform consumers and incentivise responsible behaviour on their part to reduce litter from single use plastic products. For example providing details of the availability of re-usable alternatives, re-use systems and waste management options; the impact of littering and other inappropriate disposal on the environment; and the impact of inappropriate disposal on the sewer network.  This applies to take away food containers, flexible packaging materials used for takeaway food, drinks bottles (including caps and lids), composite beverage packaging, drinks cups, tobacco products with filters and filters marketed for such use, wet wipes (personal care and domestic), balloons for non-industrial uses, lightweight carrier bags and sanitary towels, tampons and tampon applicators.

Hoping to foster a swift change in consumer behaviour, akin to that seen following the 2015 Directive on plastic bags, the EU is proud of the changes proposed and its direction of environmental travel. Commission First Vice-President Frans Timmermans commented, “Europe is setting new and ambitious standards, paving the way for the rest of the world”. 

When will this happen?

Whilst the measures are legally two years away from formally biting, businesses would be well advised to consider their application now. Whilst the future of Brexit remains unknown, there is every chance that the UK will have to implement these rules if there is an extended transition period following departure from the EU. Even absent that, DEFRA has been eager to push its own green credentials, with Secretary of State for Environment, Food and Rural Affairs, Michael Gove keen to champion the UK’s commitment to reducing levels of single use plastic.  

Perhaps more tellingly however, research by Waitrose found that 88% of people who saw the Blue Planet episode changed their behaviours as a result of what they had seen. There can be no question that as a buying public, we are becoming more demanding of suppliers in all aspects of their corporate social responsibility engagements; and this may be no different.