Commercial news update August 2018: Parent Company Liability, EU-US Privacy Shield and CMA Action

30 Jul 2018 | 5 min read

This month we have updates across corporate & commercial, data security, employment, and consumer.

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

Listen to this month’s latest news, on the go.

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Corporate & Commercial–tune in from 0:12 secs

Literal meaning – we look at two cases that emphasise the courts are rarely willing to imply words or override written words in business to business contracts.

Case 1: Goodlife Foods v Hall Fire Protection, concerned Goodlife’s purchase of a fire protection system which it claimed failed and caused £6m+ of losses.

See News Analysis: Context is key in exclusion clauses (Goodlife Foods Ltd v Hall Fire Protection Ltd)

Case 2: Bou-Simon v BGC Brokers, BGC made a payment to Bou-Simon to join the business but left shortly after.  BGC asked for the payment to be returned claiming it was an implied term that it would be returned if he left in the initial period.

See News Analysis: Contractual interpretation, implication of terms and admissibility of deleted words (Bou-Simon v BGC Brokers)

Good faith – We’ve reported on good faith clauses and that they will rarely be implied into commercial contracts. But what’s the impact when an obligation to use good faith is expressly stated in a contract?  The recent case of Health and Case Management (HCM) v Physiotherapy Network (PN) is a good example of how it can rescue a party when all else fails.

See News Analysis: Outlining correct procedure after breaking a business tie (Health & Case Management Ltd v Physiotherapy Network Ltd)

Parent company liability - In 2007 following the Kenyan presidential election, there was an upsurge in serious violence. Following this, some employees and residents living on a large tea plantation run by Unilever’s subsidiary in Kenya, claimed that Unilever owed them a duty of care.  The Court of Appeal disagreed and said that the Claimants were ‘nowhere near’ to showing that Unilever owed the Claimants a duty of care. This case looks at why this decision was made.

See case report: AAA and others v Unilever PLC and another

Corporate Governance - The FRC has published the final form of its new UK Corporate Governance Code. It applies to all companies with a premium listing of equity shares for reporting years starting on or after the 1st January 2019, so coincides with the new statutory requirements that we reported on last month.

See News Analysis:  FRC publishes revised UK Corporate Governance Code

Data security–tune in from 4:30 secs

EU-US privacy shield - There are new calls by the European Parliament to invalidate the EU-US Privacy shield.  The Privacy Shield permits personal data to be passed to US registered companies but has been criticised for not being compliant with the new General Data Protection Regulation. The European Parliament has asked that it is made fully compliant by 1st September 2018.

See LNB News: Parliament votes to suspend Privacy Shield until US 'fully complies''

Employment–tune in from 4:57secs

Sleep time - A recent Court of Appeal decision reversing previous decisions, decided that workers carrying out sleep-in shifts do not have to be paid in full for the purposes of the National Minimum Wage Regulations (NMW). This decision is however fact specific, with further details within our vlog.

See News Analysis: ‘Sleep-in’ workers only entitled to minimum wage when awake to work (Royal Mencap Society v Tomlinson-Blake, Shannon v Rampersad)

Whistle-blower reports - For a whistle-blower to have the protection of whistleblowing laws, the Court of Appeal has decided that there must be disclosure of information with sufficient factual content to show a relevant failure (such as a breach of a legal obligation).

See News Analysis: Whistleblowing: a disclosure may become protected by its context (Kilraine v London Borough of Wandsworth)

Dismissing an employee for failing to produce right to work information – An employee who was dismissed because he failed to produce evidence of his right to work in the UK should have been offered a right of appeal because, in the circumstances, an appeal was not futile and reinstatement was a possibility, according to the EAT.

See News Analysis: Right to work documents: appeal against dismissal should have been offered (Afzal v East London Pizza)

Employee status - In a recent case the Claimant was engaged on a “bank basis” as a volunteer with no guaranteed hours of work. Following some failures to respond to a call, she was removed from the list and she brought an unfair dismissal claim which required her to first prove she was an employee.  The EAT held she was not an employee as there was no mutuality of obligations. There was an expectation that she would work but that was not the same as an obligation to do so.

See: Hafal Ltd v Lane-Angell

Consumer–tune in from 8:12secs

CMA Action - The Competition and Markets Authority (CMA) has published guidance for consumer law in the online dating sector.

See LNB News: New guidance gives advice for online dating businesses and consumers

The CMA has also announced that it is taking enforcement action against hotel booking sites. The CMA has identified concerns including the ranking of hotels in search results, pressure-selling tactics (such as the creation of false impressions of room availability), the fairness of discount claims and hidden charges.

See LNB News: Hotel booking sites investigated for breaking consumer protection law.

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