Key items on the agenda for businesses this month include the countdown to implementation of the General Data Protection Regulation ((EU) 2016/679) (GDPR) and the government’s response to the Taylor Review of Modern Working Practices.
GDPR: less than 100 days to go
With less than 100 days to go before the GDPR becomes directly applicable in all EU member states, the European Commission and the Information Commissioner’s Office (ICO) have both recently issued guidance on the new regime.
The Commission’s guidance outlines what it, national data protection authorities and national administrations still need to do to bring preparations for the GDPR to a successful conclusion. The Commission has also published a new online tool to raise awareness of the GDPR and help businesses, in particular SMEs, to comply with and benefit from the new data protection rules.
The ICO has updated several parts of its guide to the GDPR and announced that new guidance and tools will be made available shortly. For example, it is in the process of developing a “sandbox” for companies (a safe place for them to test the data durability of their products and innovations).
Practical Law continues to produce new content on the GDPR and, in this blog post, Ros Foster and Patrick O’Connell of Browne Jacobson suggest spending the final 100 days before the implementation date focusing in on its core principles.
Government response to the Taylor Review of Modern Working Practices
At the start of February, the government published its wide-ranging response to the Taylor Review of Modern Working Practices. It sets out the government’s proposals to increase workers’ rights and their awareness of those rights, and the action it intends to take against employers who breach their workers’ rights. The response covers many different areas of employment law and will potentially affect a significant proportion of workers and companies.
The government considers that many of the proposals in the Taylor Review require further consultation before it can decide how best to proceed and has therefore launched four separate consultations on:
- Agency workers (closes on 9 May).
- The enforcement of employment rights (closes on 16 May).
- Measures to increase transparency in the UK labour market (closes on 23 May).
- Employment status (closes on 1 June).
On a similar note, the second reading of the Unpaid Trial Work Periods (Prohibition) Bill is expected on 16 March. The Bill intends to address employment conditions and workers’ rights in the workplace.
Draft secondary legislation on corporate governance reforms expected
The government is expected to publish and lay before Parliament the draft secondary legislation set out in the government’s response to the Green Paper on corporate governance reform imminently. The secondary legislation will cover:
- Section 172. All private and public companies of a significant size will be required to explain how their directors have had regard to the employee and other non-shareholder interests set out in section 172 of the Companies Act 2006.
- Corporate governance arrangements. All private and public companies of a significant size will be required to outline their corporate governance arrangements in their directors’ report and on their website, including whether they follow any formal code.
- Pay ratios. Quoted companies will be required to report on pay ratios comparing CEO remuneration to average pay in the wider company workforce.
- Outcomes of LTIPs. Quoted companies will be required to provide clearer explanations in their remuneration policies of the possible outcomes of their long-term incentive plans (LTIPs).
Inquiry into government support for small businesses
Following the collapse of Carillion, the House of Commons Business, Energy & Industrial Strategy Committee has launched a new inquiry into government support for small businesses to boost productivity, asking whether enough is being done to protect firms from unfair treatment by large companies. It will look at several measures, including the establishment of the Small Business Commissioner and whether small firms have sufficient access to quality management training.
2018 Spring Statement
The Spring Statement will be delivered by Chancellor Philip Hammond on Tuesday 13 March.
The Finance Bill 2018 is also expected to receive Royal Assent in March.
Changes to taxation of termination payments
Guidance on changes to taxation of termination payments is expected to be published in March. Pressure is mounting on HMRC to publish the guidance because the legislation is complex and much of it will take effect from 6 April 2018.
Hague Agreement for industrial designs due to be ratified by the UK
The UK will ratify and join the Hague Agreement for international design registrations by 31 March 2018. The government has confirmed that it will be in a position to launch the service on 6 April 2018. The Hague Agreement allows designers and businesses to obtain protection for industrial designs in multiple countries with a single application.
GC100 survey on virtual-only and hybrid general meetings
A growing number of companies are seeking shareholder approval for constitutional changes that expressly allow for the possibility of general meetings, in particular annual general meetings, to be held electronically in the future. While views differ among the legal community as to whether a virtual-only meeting is permissible under UK company law, GC100 has recently conducted a small poll among some of its members to gauge the general appetite for holding virtual-only or hybrid general meetings.
A “virtual-only” shareholder meeting is one that is held exclusively through the use of online technology without a corresponding physical meeting. A “hybrid” meeting is one where shareholders are permitted to participate in the physical meeting online (which is distinct from a meeting that is broadcast by way of a webcast).
Consultations coming to a close
Consultations on the following matters come to a close in March:
- 2 March. Modernisation of the EU Service Regulation and the Taking of Evidence Regulation.
- 8 March. Fitness check on public reporting by companies.
- 9 March. Draft regulatory technical standards under the new Prospectus Regulation (2017/1129).
- 16 March. Implementation of the Trade Secrets Directive (2016/244/EU) and draft Regulations.
- 31 March. Draft technical advice on: the content and format of the prospectus; the content and format of the EU growth prospectus; and scrutiny and approval of the prospectus.