REUTERS | Phil Noble

What’s on the agenda for in-house lawyers in April 2018?

Key items on the agenda for businesses this month include the due date for publication of the first gender pay gap reports and the continuing countdown to implementation of the General Data Protection Regulation ((EU) 2016/679) (GDPR).

First gender pay gap reports due

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) came into force on 6 April 2017 and introduced mandatory gender pay gap reporting for large private sector organisations (those with 250 or more employees) which require them to publish annual information on their gender pay gap.

Relevant organisations are required to publish their first gender pay gap reports by 4 April 2018 (in respect of April 2017 pay data). The reports must be published on the employer’s website and a central government website for three years.

GDPR: two months to go before implementation

The GDPR implementation date of 25 May 2018 is now less than two months away and Practical Law has published a toolkit for in-house lawyers tasked with advising on their organisation’s GDPR compliance efforts. Among other things, the toolkit includes trackers showing guidance published by the Article 29 Working Party and the Information Commissioner’s Office, and the progress of the Data Protection Bill and E-Privacy Regulation, standard documents (including board memos, policies, standard clauses and agreements), and PowerPoint slides for training purposes.

UK companies with offices in the U.S. and subsidiaries of U.S. based technology companies with offices in the UK should also keep an eye on a U.S. Supreme Court data access case involving Microsoft and the Justice Department over whether technology companies are required to provide prosecutors with data stored overseas.  The ruling will have implications for the availability of their data, held throughout the world, to U.S. prosecutors and may create potential conflict of laws issues. Affected organisations may also need to rewrite their privacy notices to ensure transparency with data subjects about this potential access. A ruling is expected in June 2018.

Corporate governance reform: publication of secondary legislation delayed

The government is now 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 in June to coincide with publication of the new UK Corporate Governance Code. 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).

BEIS has published a consultation on corporate governance and insolvency that follows on from the reforms set out in the Green Paper. The consultation seeks views on several proposed measures, including extending the Insolvency Service’s existing investigative powers into the conduct of directors to cover directors of dissolved companies. The closing date for responses is 11 June 2018.

Progress on BPP Group Shareholder Voting Research expected

The Best Practice Principles (BPP) Group for Shareholder Voting Research launched a consultation on its best practice principles for shareholder voting research and analysis in October 2017. The BPP Group has not yet decided whether there will be a second consultation on draft revised principles and reporting arrangements, but if it does decide to conduct a second consultation, it plans to start this in April 2018. It will then publish the revised principles and other documents in July or August 2018. If the BPP Group decides against a second consultation, it will aim to publish a report setting out the findings of its review, together with the revised principles and details of the reporting and monitoring arrangements, in April 2018.

Changes to taxation of termination payments

On 6 April 2018, all payments in lieu of notice (PILON), including payments where there is no contractual PILON power, will be subject to income tax and class 1 NICs. Employers will effectively be required to subject to tax that part of a termination payment equivalent to the employee’s basic pay if and to the extent that notice is not worked. HMRC states that the new rules apply only where both payment and termination occurs on or after 6 April 2018.

Employment tribunal compensation limits set to increase

The Employment Rights (Increase of Limits) Order 2018 (SI 2018/194) will increase the limit applying to certain awards of employment tribunals, and other amounts payable under employment legislation, from 6 April 2018. The maximum compensatory award for unfair dismissal will rise from £80,541 to £83,682. The maximum amount of a week’s pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, also rises from £489 to £508.

Childcare voucher scheme closure deferred

The current childcare voucher scheme was expected to be closed to new entrants from April 2018 but will now close in October 2018. Existing arrangements will be protected until April 2018 (or April 2021 for cars, accommodation and school fees).

New code of practice for product safety recalls launched

The recently-established Office for Product Safety and Standards has teamed up with the British Standards Institution to launch a new code of practice for product safety recalls in the UK. The Code is not legally binding and applies to recalls of all non-food consumer products placed on the market in the UK, except where there are already recall processes such as for automotive or pharmaceutical products.

EU Regulation on cross-border portability of online content services in the Internal Market starts to apply

The Portability of Online Content Services Regulations 2018 (SI 2018/249), which enforce the EU Regulation on cross-border portability of online content services, come into force on 1 April 2018. The new measures remove barriers to the portability of online content when travelling in the EU, allowing consumers to access online content that they have subscribed to, or bought, in their own member state when they are temporarily present in another member state.

Trade Marks Directive implementation consultation closes

The government’s consultation on the implementation of the new Trade Marks Directive (2015/2436) will close on 16 April 2018. The consultation paper included a draft statutory instrument, The Trade Mark Regulations 2018, which will come into force on 14 January 2019. The substantive changes likely to be most significant for trade mark owners are those relating to distinctive character acquired before registration, seizure of transit goods and a new power for defendants to raise non-use as a defence in infringement proceedings.

Practical Law In-house Robert Clay

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