This round-up summarises the developments that generated the most interest with in-house lawyers in the first three months of 2016, including the new PSC register requirements, Brexit, gender pay gap reporting, EU and US privacy shield and the 2016 Budget.
Implementing register of people with significant control (PSC) requirements
From 6 April 2016, almost all companies and LLPs will have to create and maintain a register of people with significant control and start taking reasonable steps to find out if anyone needs to be registered on it. Failure to keep the register, or take reasonable steps, is a criminal offence. The register cannot be blank, and official wording has to be included depending on the applicable circumstances.
The Department for Business Innovation & Skills (BIS) has published and repeatedly amended (most recently here) its guidance for companies and questions on the practical detail of the requirements have dominated Ask in March.
Brexit: European Council reached agreement with David Cameron
Ahead of the EU Referendum due to be held on 23 June, on 19 February the European Council reached an agreement with David Cameron on a set of arrangements, which will change the relationship between the EU and the UK.
The agreement is compatible with the Treaties, is legally binding, and may be amended or repealed only by common accord of the Heads of State or Government of the member states of the EU.
Draft gender pay gap reporting requirements
In mid-February, the government published its response to the consultation paper on implementing the mandatory gender pay gap reporting and draft regulations introducing gender pay gap reporting.
Under the new regime, private and third sector employers with at least 250 employees will be required to publish an annual report showing the overall gender pay gap in their organisation. It is expected that the regulations will come into force on 1 October 2016. If it does, employers will be required to have a snapshot of gender pay gap data prepared for 30 April 2017 and will need to publish the first gender pay reports within 12 months of that date.
The Government Equalities Office, in partnership with Deloitte, also published a report on closing the gender pay gap which analyses the gender pay gap in different sectors.
EU-US political agreement on new data transfer agreement
At the end of January, the European Commission and the United States reached political agreement on the new framework for transatlantic data: the EU-US Privacy Shield. The Commission subsequently published the draft adequacy decision. This includes the Privacy Shield Principles that companies will have to abide by, as well as the US government’s written commitments on the enforcement of the arrangement.
There remain many political obstacles to the implementation of the privacy shield and the advice to companies is not to change what they are doing for now and continue to use alternative transfer mechanisms such as standard contractual clauses and binding corporate rules.
2016 Budget and Finance Bill
George Osborne announced the Budget on 16 March 2016. There were “big changes in this Budget for business”, according to David Harkness of Clifford Chance in Practical Law’s practitioner round-up. Key business tax developments included:
- A corporation tax cut from April 2020.
- New restrictions on the use of carried forward losses.
- Making certain employment termination payments subject to employer NICs from 2018.
- New limits on corporation tax deductions for interest from April 2017.
The first version of the Finance Bill 2016 was published on 24 March 2016.
Sub-contractor’s standard terms and UCTA reasonableness considered
An interesting case decided by the Technology and Construction Court in January found that a sub-contractor was doing business on its written standard terms for the purposes of the Unfair Contract Terms Act 1977 (UCTA) even where those terms were not incorporated in their entirety, and despite the fact that they were negotiable. As a preliminary issue, the court found that the terms had not in fact been included in the final sub-contract, so the comments were strictly obiter.
Sentencing of the first company to be prosecuted for corruption
In January, a UK printing company was fined £1,316,799 for corruption at Southwark Crown Court. The company was convicted under the old legislation as the offences pre-dated the Bribery Act 2010, following a Serious Fraud Office investigation into corrupt payments made in return for the award of contracts to the company. Two directors of the company had previously been disqualified and sentenced to imprisonment.
High-profile decision on monitoring personal messages at work
Also in January, the European Court of Human Rights handed down a decision on the right to privacy in the context of a private sector employer’s monitoring of an employee’s work-related Yahoo Messenger account. The case received a great deal of media coverage, some of it giving the misleading impression that the decision gave employers a green light to snoop on employees’ personal emails. While the court found in favour of the employer, the decision does not overrule previous case law on the reasonable expectation of privacy and the need for any interference in privacy to be proportionate.
Online dispute resolution platform launched
As of 15 February 2016, consumers and traders can now conduct an Alternative Dispute Resolution procedure online via the Online Dispute Resolution platform in relation to goods or services bought online.
