Britain, Business, European Court, Government, Legal, Politics

The practice of employers spying on staff?

HUMAN RIGHTS LAW

Employers need to take a ‘proportionate approach’ to monitoring their staff.

Last year, significant publicity was given to a European Court of Human Rights (ECHR) decision whereby the rejection of a claim was widely described as a charter for employers to snoop on their employees at work.

Following an appeal, however, a claim by Mr Barbulescu that his right to privacy at work had been violated has been upheld.

The case concerned a Romanian engineer whose employer asked him to set up a Yahoo messenger account. The employer laid down very strict rules against any personal use.

The company monitored Mr Barbulescu’s account and accused him of using it for personal reasons. The defendant disputed this but was then presented with evidence that he made extensive use of it to discuss aspects of his sex life and health with two of his contacts, namely his fiancée and brother. Mr Barbulescu was subsequently dismissed and he brought claims against his employer.

The Grand Chamber of the Court has now decided that Mr Barbulescu’s right to privacy under Article 8 of the European Convention was breached. The key part of the decision was that an employee’s private life at work cannot be reduced to “zero”.

The national courts had not taken account of relevant issues including whether Mr Barbulescu had received prior notice of monitoring or considered its nature and extent. Nor had they determined legitimate reasons justifying the monitoring or considered less intrusive measures. They had accordingly failed to strike the right balance between the employer’s rights to impose discipline and the employee’s right to privacy.

The case highlights the degree of necessity that employers should take when monitoring employees. Whilst that should amount to a proportionate approach, the decision of the Grand Chamber will have limited impact in the UK. This is because legislation and guidance already sets out the parameters of legitimate monitoring by employers.

But there is an overlap. UK workers may be becoming concerned about domestic developments. The EU withdrawal bill, while purporting to preserve all workers’ rights enjoyed by virtue of EU law, controversially excludes the Charter of Fundamental Rights which enshrines in EU law both respect for private and family life and protection of personal data.

While the British Government appear to have sidelined its plans to withdraw the UK from the Convention on Human Rights and from the jurisdiction of the Court which presided in the Barbulescu case, there are indications that these important issues may be revisited after we leave the EU.

Although existing safeguards will continue to apply and be strengthened through implementation of the European General Data Protection Regulation next year, these developments mean, despite UK parliamentary assurances, workers’ rights in the UK look like they are about to be subject (once again) to significant uncertainty.

 

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Business, Government, Legal, Society, Taxation

New tax offence to be made within Criminal Finances Act 2017

TAX EVASION

The UK Government is expected to bring into force a new tax offence in the Criminal Finances Act 2017. It is likely to become law in September.

What is startling about the new offence is that it will make a business guilty as a result of the criminal conduct of its employees and others who may act on its behalf.

Where an individual facilitates tax evasion the business will be guilty of failing to prevent that facilitation unless it can demonstrate that, at the time of the employee’s conduct, it had appropriate procedures in place to prevent facilitation arising.

This new offence will have an immediate impact for many firms. Implicitly, it also shows the UK Government’s preferred direction of travel for corporate liability, i.e. to criminalise business for the actions of connected persons.

The new tax offence will be of concern to banks, accountants, Independent Financial Advisors, and to anyone providing tax advice. Businesses are now eager to know what they should have in place to make sure that employees and others who act on their behalf are not facilitating tax evasion for clients and customers. They will also want to know how they can show that they have taken every reasonable step to prevent the facilitation of tax evasion in the first place. An organisation that is criminalised because of the actions of its employees or third parties will have serious implications for its long-term future and health.

There are some easy first steps that businesses can take to strengthen their position. Policies and procedures in place at present should be reviewed, with an emphasis on explaining to people what is and is not acceptable. These should be updated if it is deemed necessary in clarifying the position. Any procedural improvements should be freely communicated to all employees and others providing tax services for the business.

To understand the wider direction of travel for corporate liability we need to understand why there is a need for change. The historic approach to successfully prosecute a company required the identification of a person in the business who possessed a “directing mind and will” and who, specifically, condoned or was aware of the crime. Known as “the identification doctrine” there are a number of difficulties with applying this approach. For example, it may not be difficult to identify the ‘directing mind’ in a family-owned run business where all of the major decisions are taken by a small group of people. It is quite another for a prosecutor to identify the directing mind within a global business that has a complex structure and sophisticated approach to decision-making.

The new offence follows the same methodology and approach as the Bribery Act.

The UK Government has also been consulting on wider reform of corporate crime. One of the options being given serious consideration is a wider roll-out of the “failure to prevent” approach across the spectrum of economic crime. This will place an onus on a business not only to show that it has done no wrong, but also to demonstrate that the organisation is properly policing its employees and others acting on its behalf. Whilst not quite the end of the presumption of innocence until proven guilty, any firm who allows their employee or connected person to break the law had better have a very good story to tell.

 

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Britain, Legal, Media, Society

Libel threat to the Press is facing axe

PRESS REGULATION

The Conservatives have said they will scrap a draconian law on the Press that would have forced newspapers to pay all legal costs in a libel case even if they won.

The party’s manifesto, released earlier this week, pledged to repeal Section 40 of the Crime and Courts Act and spare papers from “crippling” costs. The party has also said it would axe the second stage of the Leveson Inquiry into Press Culture, practices and ethics.

This was expected to investigate law-breaking and improper conduct by media organisations, following the first stage into phone hacking and whether police were complicit in misconduct.

Also, websites that benefit from newspaper content could be pressured to share advertising profits.

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