Courts move towards higher tariffs on Health and Safety breaches

Two high profile health and safety court rulings have caught the headlines this month, but the penalties imposed reflect the expected shift towards higher tariffs and businesses need to sit up and take notice say experts.  

First, fashion retailer Hugo Boss UK Limited was fined £1.2 million with costs of nearly £47,000 following a prosecution relating to a fatal incident at one of the brand’s outlets in June 2013, when a small child died after a free-standing mirror fell on him.

Then, Oscar's Wine Bar in South Yorkshire was fined £100,000 and ordered to pay £40,000 in costs after a barman gave a potentially lethal liquid nitrogen cocktail to a teenage girl, resulting in her having her stomach removed. 

Under the existing 2010 sentencing guidelines, concerns have been expressed around the inexperience and inconsistency of magistrates and judges leading to fines being imposed that are too low relative to the harm caused, culpability and means.   As a result, following recent consultation, it’s expected that the Sentencing Council will soon publish guidelines that take account of these factors.  

Courts would first consider harm and culpability factors so as to categorise the seriousness of the offence.  This would be put together with the financial standing of the company, with organisations banded from micro to large, to produce a predicted compensation figure.

Dafydd Roberts, Regulatory Law expert with Gamlins Law: “These are both tragic cases, for which no amount of compensation could replace the loss of life or health, but the level of fine is much higher than generally seen in the past, and it seems that the courts are acting in the spirit and ethos of the expected new guidelines, even though nothing has been published yet.”

He added:  “Businesses need to sit up and take notice.  No one wants to be responsible for such accidents, and the best way to avoid that is by making sure that health and safety systems are not just in place, but properly managed and regularly reviewed.  Employees need to have safety at the forefront of their daily activities, and be aware of how it helps to protect both fellow workers and customers. 

“If the employee manual and employment contracts aren’t clear, then now is the time to review them.  Having really robust health and safety policies, regularly reviewed and properly carried out in practice, will go a long way towards providing a defence against any criminal liability, and may provide a defence or at least mitigation against a negligence claim.”

 

Health and Safety Dismissals: Knee Jerk Reactions

In Newbound v Thames Water Utilities, the Court of Appeal upheld an ET decision that the dismissal of an employee for gross misconduct, even after a serious breach of health and safety rules (including failure to wear breathing apparatus in a sewer) was unfair.

Employers have traditionally felt relatively safe dismissing an employee on health and safety grounds, particularly as the sanctions for breach of health and safety for employers can be so severe (think high financial penalties and criminal records). Establishing therefore that a decision was reasonable in the circumstances did not cause employers much reason to lose sleep.

In Newbound, the CA attached significance to the evidence that there had been a lack of training in new procedures and that Mr Newbound had been treated differently to another employee who was not dismissed in similar circumstances.

The CA also approved the tribunal’s finding that Mr Newbound had a 34 year record with a clean disciplinary record. It was considered insufficient weight had been attached to this by the employer.

 

Countdown to new consumer laws

Businesses have until 1^st October to get ready for new consumer rights and dispute resolution procedures

 

Consumers have new rights from October, including a 30-day period to claim a full refund on faulty goods and, for the first time, protections on digital content purchases.  They can also challenge unfair or hidden trading terms.  

The Consumer Rights Act 2015 consolidates eight pieces of separate legislation in this area and whilst most of the changes are updates to existing laws, there are some important new areas covered.

For businesses, it means processes and trading terms must be updated to match the new legislation, as well as ensuring staff are fully briefed.  Alongside, there are also new requirements on businesses to prepare for consumer dispute resolution.    

Under the Act:

·         The new law sees the introduction of rules around what happens where services are not provided with reasonable care and skill, or as they were agreed.  In such cases, consumers can now demand that sub-standard services are re-done or receive a price reduction

·         A 30-day time period to return faulty goods and get a full refund – until now, the law has been unclear on how long is a “reasonable” period for goods to be rejected

·         After one failed repair, or after one replacement which has also failed, consumers can demand their money back, in full, during the first six months, rather than having to agree to repeated attempts to get a repair done

·         Any unfair or hidden terms can be challenged by consumers

·         New rights for consumers for a repair or a replacement of faulty digital content such as online film, games, music downloads and e-books.

 

Businesses have until 1^st October to educate staff about the changes the new legislation brings, although some of the rights introduced by the Act came into force earlier in the year.  These covered publication of fee tariffs by letting agents and requirements on ticket resellers. 

 

The aim of the new Act is to reduce disagreement and court action, but where a dispute cannot be resolved directly between the supplier and consumer, the Government is hoping that dispute resolution, which uses techniques such as mediation or arbitration, will provide a quicker and cheaper route than the courts.   From October, traders will have to provide the consumer with a route to Alternative Dispute Resolution through a certified scheme, which could be through their relevant trade body or similar organisation, if they cannot resolve the dispute directly. 

Legal expert Elissa Thursfield of solicitors Gamlins Law in Rhyl said:  “There are a number of changes and any business selling to consumers will need to be prepared.  It’s important that terms and conditions are reviewed and updated as necessary. In future, these must be prominent and transparent, if traders want to avoid finding themselves being assessed for fairness.  So, if you have hugely detailed small print that no one could possibly read, it’s worth seeing whether you can reduce this, or at the very least making sure that there’s nothing hidden in there that the consumer should know about up-front.

“It’s very important that staff are fully briefed on the extent of the new law as there are a number of far-reaching implications.   For example, where a consumer specifies a purpose when buying and is advised by a member of staff, it’s important that the goods or services are going to be suitable for that purpose; otherwise if it fails to deliver, they have a right to claim their money back.” 

She added:  “For suppliers of digital content, it’s important that traders ensure they are complying with the aspects of the new legislation that specifically relate to them.  In the past the law has been unclear in this area, as it failed to keep up with the huge growth and demand for digital products.”

Commercial Update: Hot Dates and Hot Data

Hot dates and hot data

Reports that an extramarital dating site has been hacked recently may have given its customers more than the usual worry that accompanies news of cyber-crime. 

Following on the heels of many other high profile hacking cases, such as Sony in the United States, organisations are being forced to look ever more carefully at their information risk management regime, to make sure they value information as an asset, and assess their processes with the same rigour as legal, regulatory, financial or operational risk. 

In the case of the dating site Ashley Madison, which promotes itself with the strapline ‘Life is short, have an affair’, it’s been reported that more than 2,500 customer records have been released to the public by the hackers, who claim to have stolen the total database of the site, which is said to contain more than 33 million members in 46 countries.  The company has faced a barrage of calls from customers, concerned that their personal details and credit card information have been compromised. 

And whilst the true picture for the internet daters continues to enfold, Ashley Madison’s problems are a reflection of a fast-growing area of crime, as more and more criminals exploit the speed, convenience and anonymity of the internet.  The Metropolitan Police has recently announced it is boosting the size of its team to tackle cyber-crime and the Government has issued guidance for companies, in a bid to stem the range of criminal activities that know no borders, either physical or virtual.

For companies, cyber-criminals may attack the functioning of computer hardware and software, or try to commit financial crimes, such as online fraud or by penetrating online financial services, or go ‘phishing’ for confidential information.  For company directors, the advice is to ensure the topic is at the top of the boardroom agenda.

 As well as having to meet the requirements of the Data Protection Act and the Communications Act in the UK, also up and coming is the draft EU Data Protection Regulation and the proposed EU Cybersecurity Directive.   There are requirements under the Companies Act 2006 also, which place a duty on directors to keep themselves informed on relevant issues.  They may be held to be negligent if they do not take appropriate professional or expert advice to tackle any identified threats.

The key components for business are to undertake a risk analysis, develop a cyber-security programme, set in place the right policies and take appropriate technological measures. 

“Every business must ask itself what value there is in information they hold electronically, for example, it may be intellectual property, customer information or client funds.  Then they need to consider where the risk lies; as well as outside criminals, the risk could come from current or previous employees or competitors,” explained commercial  law expert Glyn Morrice-Evans of Gamlins Law in Rhyl.

“The response to that review should include a clear cyber-security strategy, with policies in place and staff well informed, backed up by a regular review and updating of technological practices.”

IT system reviews would range from how networks are monitored for attack and what firewalls and malware detection software is in place, through to how internal and external users are controlled and how access may be segregated or restricted. 

“It can come down to the most simple things, such as who holds the passwords and making sure staff don’t open spam mail,” added Glyn.  “Thorough education of staff, with regular updates, is essential.  As well as demonstrating that the company takes the matter seriously, staff are often in the front line, and if they are well informed of the risks, and encouraged to take responsibility, they can be more effective gatekeepers.”

 

 

Tracking Devices: Employee dismissed for deleting tracking app

A case has been reported from the US where a woman claimed she has been fired for removing an app from her phone which allowed her employers to track her every move.

 

The App, Xora was used by the company to monitor employees out working in the field. The employee stated she had no problem with being monitored whilst at work, but the app did not differentiate between working hours and none working hours giving her supervisors the ability to track her movements whilst she was not working.

The employee challenged her employers about the issue and they admitted that employees could be monitored and bragged that they knew her specific movements and even how fast she was driving.

The employee believed it was an invasion of privacy and deleted the app from her phone. She stated her employer expected her to ‘tolerate’ the intrusion. Soon after deleting the app she was fired.

If the employee’s account is correct, the matter was handled terribly by the employer. Any monitoring should be proportionate and it would be difficult  if not impossible for an employer to make a case to state that such monitoring of someone’s private life was justified.

 

Any employers considering bringing disciplinary actions against employees who refuse to be monitored in a way which could overlap with their private life should be cautious. Take advice and consider whether there are any other more proportionate ways of monitoring your employee’s behaviour if it is required by the business.

If this was case being heard in the UK, the employer would likely struggle to show that their actions were those of a reasonable employer. Instances of disciplinary relating to tracking devices in vehicles are not unheard of, or cases of misconduct for private social media use, it is therefore not inconceivable that something like this could present itself in the UK.

 

When comments are advertisements….

When comments are advertisements….

Accusation that drinks group encouraged irresponsible alcohol consumption in a tweet highlights social media challenge for business

Businesses must make sure they are not breaching advertising regulations when they update their social media feeds.

The reminder follows the news that Diageo’s Guinness® UK brand has been cleared by the Advertising Standards Authority (ASA) of implying that alcohol could improve a person's week, after a tweet on the brand's social media account was branded “irresponsible”.   

Alcohol Concern filed a complaint with the ASA when @GuinnessGB tweeted a photograph of the brewery gates with the caption, “a good week starts here” as part of a promotional campaign to champion the people working at the brewery.

The tweet was challenged as breaching the responsible advertising code, but the ASA decided that consumers would not confuse the brewery gates with a bar or other social venue where alcohol was consumed. 

“We also noted that the photo was tweeted on Monday,” said the ASA in their ruling. “In this context, we considered that the ad was likely to be interpreted as having a dual meaning: as an expression of opinion from those who worked at the brewery about the week of work ahead and their enjoyment of their work; and as an indication to the public that Guinness, which began its journey to them at the brewery, could be consumed as part of a ‘good week.’”

But the complaint is a reminder to businesses to tighten up their social media policy to make sure they don’t breach advertising regulations, as the boundaries between paid-for advertising and other forms of communication become more blurred. 

"Social media has become a colossus and controlling its use is a real issue for businesses that want to make sure the benefits outweigh the problems," said employment law expert  Elissa Thursfield  of Gamlins Law.  “It’s a medium that relies on speed of response and short, pithy comments, and that’s precisely why it’s a minefield to manage. 

“It’s all too easy to have someone keen to keep the chat going, without thinking about what they are stepping into, such as in this case.   There is also the problem of employees being too quick to voice their own opinions and land their employer in hot water.” 

She added:  "Social media usage by commercial organisations needs constant review and clarification within a business’s marketing strategy and terms of employment.” 

The ASA ruled that the Twitter advertisement did not breach CAP Code rules 1.3 (Responsible advertising), 18.1, 18.3, 18.6 and 18.7 (Alcohol).

 

Abusive email puts employer on the spot

An abusive rejection letter sent by email to a jobseeker has landed a company director in hot water. 

The email was sent to 48 year old James Allen, a former serviceman from Devon, who was described in the letter as ‘an old, aesthetically challenged guy with no teeth’.

Written by the company director of a window and conservatory manufacturer, the message to the would-be labourer read:  “You are not only the most inappropriate person for this job, but probably for any job you will spend the next few years applying for, only to get rejected as soon as they meet you.”

Sarah Hassler, the company director who wrote the abusive email has said that it was a mistake that she sent her so-called ‘rant’, saying that she had read an article suggesting that anger and upset could be released by writing down how one felt, but not sharing what was written.  She said that she had written an appropriate email turning down James Allen for the job, but the two had become muddled and she had sent the wrong one.

This is a pretty extreme example of what not to say to either a potential or existing employee.  And whilst problems with performance, for example, may involve some plain-speaking, it’s important that you keep to the facts and don’t resort to any personal attacks.  

There is a raft of legislation that could be breached by such a conversation, including the Equality Act, and getting it wrong could turn a performance review into an expensive conversation for the company.”   

In any discussion with a member of staff, whether a performance review or simply a general discussion about their role and responsibilities, it’s very important to document what is said.  It’s also worth looking at how anyone in the business with responsibility for staff management and interaction is properly trained in the right procedures.  

Most importantly, everyone should know they can’t draft ill-considered emails, or share frustrations with other colleagues, even to release pent-up anger.

 

 

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This is not legal advice; it is intended to provide information of general interest about current legal issues.