Ecodesign for Sustainable Products Regulation

The Ecodesign for Sustainable Products Regulation (ESPR), passed by the European Parliament on 23 April 2024 came into force on 18 July 2024.

The ESPR is a framework legislation aimed at shaping the sustainable design of products sold on the EU market and signals a shift towards a more circular economy. Once the ESPR comes into force, rules for specific products and markets will be introduced progressively relating to product groups.

The EU Commission is mandated to focus on establishing delegated acts for iron, steel, aluminium, textiles, furniture, tyres, detergents, paints, lubricants and chemicals. Notably within the textiles industry, for which a working group has started its preparatory study on textiles products to tackle fast fashion and textiles waste, with rules expected to come into force by July 2025.

How could it impact your business?

Scope

The ESPR establishes a new legislative sustainability framework that applies to “any physical good” that is placed on the EU market (save for several express exclusions, including food, pharmaceutical and veterinary products, amongst others). This includes goods placed on the EU market by non-EU companies (such as the UK).

The ESPR does not establish specific sustainability requirements, instead it empowers the EU Commission to adopt specific Acts relating to specific product groups within the ESPR framework.

Sustainable by Design

Products sold on the EU market will be required to meet certain performance conditions, or “ecodesign requirements” (relating to a product’s durability and reliability, amongst other conditions) and information requirements (relating to a product’s repairability and durability scores, carbon footprint and/or environmental footprint). The information must be clear, readily accessible and understandable – especially for consumer products.

Digital Product Passport

Under the ESPR, a product may only be placed on the European market if it has a digital product passport (DPP) - a unique digital identifier which will store relevant information relating to its sustainability credentials. The DPP will act as a digital entry point to access this information for users, consumers, and authorities, and will operate as a tool for transparency and disclosure, supplementing the obligations in the Corporate Sustainability Due Diligence Directive amongst other reporting requirements.

In addition to information and manufacturing requirements, the ESPR introduces a ban on the destruction of unsold products from July 2026 and imposes an obligation on businesses to report on the destruction of such unsold products, including the number and weight of unsold consumer products and the reasons for destruction.

The rules laid down in the ESPR will apply to all economic operators, with additional requirements for:

• Manufacturers;

• Online marketplaces;

• Search engines;

• Importers;

• Dealers;

• Distributors; and

• Fulfilment service providers.

What steps should you take?

Businesses placing products on the EU market will need to determine whether the ESPR applies to their operations and consider what level of the supply chain they operate at (e.g. manufacturer, distributor, etc), to determine the scope of the obligations under the ESPR.

Where the ESPR does apply, businesses will need to address its requirements and implement technical and operational measures to comply with the relevant rules and obligations – and remain live to the introduction of specific delegated Acts.

Businesses could leverage their DPP for products as a means of creating a direct digital channel to engage with their customers and build brand loyalty by demonstrating their ESG credentials, provided that the data contained in the DPP complies with the information requirements in the relevant delegated act. To support an ESG strategy, businesses must include verifiable and accurate information on product DPPs to avoid the risk of greenwashing or misleading advertising practices (see our update below on Green Marketing).

Businesses could also leverage the data gathered from DPPs to inform stock and manufacturing requirements to produce only what is necessary and reduce waste, contributing to compliance with the ESPR and other ESG legislation.

Businesses should start now by preparing compliance policies that fit in with their broader ESG strategy, alongside their obligations under the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.

The prohibition of the destruction of unsold consumer products does not apply to microbusinesses, and small and medium enterprises will have an extended compliance deadline, with the prohibition scheduled to come into force in July 2030, allowing time to observe how larger operators deal with their obligations before implementing their own ESPR compliance programme.

The ESPR does not set any penalties or fines for non-compliance, although the Commission may set fines within delegated acts. Businesses will need to monitor these rules where they make products across a variety of ranges to mitigate the risk of fines, greenwashing, or reputational harm.

For almost all industries, the ESPR framework is revolutionising product design. For manufacturers with forward looking design and production cycles, it is an opportune time to understand the ESPR’s requirements and determine what should be done now to ensure their products are compliant with the framework, otherwise businesses risk losing access to the EU market.

DMCC Deep Dive: Consumer Law

The Digital Markets, Competition and Consumers Act (DMCC) beckons in a new dawn for consumer law enforcement, granting the Competition and Markets Authority (CMA) direct enforcement powers for Consumer Law and extending the CMA’s existing investigatory, information request and dawn raid powers into the consumer law regime.

In addition to the procedural changes for consumer law enforcement, the DMCC introduces additional rules for those selling goods or services to consumers, particularly in relation to subscription contracts and fake reviews.

Whilst the CMA has not currently indicated a timeline for the implementation of the amendments to the consumer law regime, current indications suggest that the legislation may be in force as early as Q3 2024.

In advance of the CMA gaining its direct enforcement powers, the regulator has been taking action against a number of businesses for infringements of consumer law, most recently against Wowcher for urgency and scarcity claims and the use of pre-ticked boxes for sign-ups to rolling subscription schemes.

How could it impact your business?

For businesses selling to consumers, the DMCC presents a significant change in the risk associated with non-compliance with consumer law. Not only does the DMCC introduce new rules to be followed when contracting with consumers, it introduces a new enforcement mechanism for both new and existing rules which makes enforcement significantly faster, subject to less scrutiny and at lower cost for the CMA. Moreover, the CMA will have the ability to fine organisations up to 10% of group worldwide turnover for any infringement of consumer law, alongside powers to enforce refunds to consumers.

The DMCC also introduces new rules for subscription contracts. Traders offering subscription contracts to consumers will have to provide specific information to consumers before the contract is entered into, and then at various stages through the lifecycle of the contract, including at the end of free trial periods. Significantly, the Act will introduce a statutory ‘cooling off’ period for all subscription contracts, both during the initial 14 days after the contract has been entered into, and 14 days after any renewal date, granting consumers the right to cancel penalty-free within this period. Notably, the Act is clear that traders cannot contract out of these provisions, and the rights conferred to consumers in the Act will automatically apply to all consumer subscription contracts.

Whilst the DMCC transposes many of the blacklisted practices currently set out in the Unfair Trading Regulations 2008 (which is repealed by the Act), the DMCC introduces an additional black-listed practice in relation to fake customer reviews. Under the Act, traders must not create (either themselves, or commission others to create) false reviews on their own or third party sites and must establish appropriate procedures to screen reviews in order to verify their authenticity. Where a trader does choose to present customer reviews, it must do so in a way that is not misleading to consumers.

What steps should you take?

Businesses that sell to consumers should take this opportunity to review any existing policies, procedures, and agreements they have with consumers to ensure compliance with the DMCC. This will be particularly important for businesses offering goods and/or services through a subscription model but will also be key for all businesses selling to consumers.

Until the introduction of the DMCC, the enforcement of consumer law has not been consistent and has often lacked “teeth”. This is set to change as the risk of non-compliance significantly increases. Whilst a risk-based approach may have permitted certain selling practices previously, non-compliant or borderline compliant practices may no longer be within the risk appetite of your organisation.

Although the exact timeline for implementation is not yet known, businesses are advised to implement the terms of the DMCC into their policies, procedures and agreements quickly as the CMA is taking pre-emptive action against several businesses for practices that will be non-compliant when the law is fully in force. The CMA’s strategic priorities currently focus on traders’ use of misleading green claims and urgency and scarcity claims; businesses should therefore focus initial efforts in revising policies and procedures in relation to these practices.

FCA Listing Regime Update

The Financial Conduct Authority (FCA) has published a policy statement (PS24/6) based on feedback from a consultation that ended in March. The statement makes changes to the listing rules which came into force on 29 July.

The statement reflects the move to a single ‘commercial companies’ category for equity shares, with the ‘premium’ and ‘standard’ listing segments being removed. The changes aim to simplify the listing process, reduce growth barriers for listed companies, and enhance disclosure to sufficiently equip investors to making informed decisions.

The reforms follow extensive feedback, engagement, and cost-benefit analysis.

How could it impact your business?

The policy statement will introduce a disclosure-based approach to transactions, which may require companies to adjust their reporting practices. However, investors may benefit from the improved transparency.

The simplified rules may make it easier for large private companies to list in the UK, which in turn opens more investment opportunities.

What steps should you take?

Companies should take time to read through the full policy statement, which can be found here. Upon reviewing the guidance, they should consider its distinction from current practices and ensure compliance practices and reporting systems are updated to meet the new disclosure requirements.

From July 29, the FCA will release amended forms, checklists and sponsor declarations to align with the UKLRs, and it will re-assess the listing regime five years following its implementation. Companies should keep an eye on updates to the FCA Handbook for any further clarifications or updates on the new rules.

Further awareness should be exercised in dual class share structures; institutional investors may hold enhanced voting rights. Ensure monitoring of further guidance from the FCA in case of further changes or additions to the policy of listing regimes.

Law Commission consultation on contempt of court

Contempt laws exist to prevent conduct that interferes, abuses or tries to prevent the process of justice and a fair trial.

On 9 July 2024, the Law Commission of England and Wales published a consultation paper on reviewing the law on contempt of court. The full consultation paper can be found here.

The Law Commission is seeking views on a wide range of issues with the aim of clarifying and improving the fairness, consistency, coherence, and effectiveness of contempt laws. The consultation, which closes on 8 November, is seeking views from as many stakeholders as possible, including court users. There are a number of ways in which to respond, including submitting an online response here.

In the hopes of simplifying the law of contempt, there is a proposal to remove the distinction between “criminal” and “civil” contempt and replacing it with the following categories:

• General Contempt.

• Contempt by breach of Court order or Undertaking.

• Contempt by publication when proceedings are active.

How could it impact your business?

The Law Commission had described the law on contempt as ‘disorganised and, at times, incoherent’.

There are currently issues faced by the courts in how to deal with contempt (including wilful disobedience of Court Orders) when it occurs. Specifically, the courts often lack the powers or confidence to deal with contempt and have to wait for a superior court to either sanction the offending party with a fine or a custodial sentence.

Sanction are often in the best interest of the litigant who simply wants the Order complied with.

By simplifying the procedure and ensuring that the courts have the proper power in place to deal with contempt when it arises, it will allow litigants to be more secure in the knowledge that the other side will abide by the terms of an order of the court.

What steps should you take?

While the consultation is ongoing, we are unable to say with any certainty what the eventual outcome will be. However, it is clear that the courts are aware that there is an issue in how they deal with contempt, both in and outside of the courtroom. Any change to the current law of contempt will likely allow for greater certainty in the manner to which the court applies its powers and will likely allow litigants to feel more secure that the other side will be less likely to breach any order made.

2019 Hague Convention

The United Kingdom has ratified the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The convention will take effect from July 2025.

Joining the Convention will mean UK civil and commercial judgments will be recognised and enforceable in other convention countries, most notably the EU (except Denmark) by providing:

• uniform rules for the recognition and enforcement of judgments between the UK and other contracting states.

• a firm base for the recognition and enforcement of judgments between the UK and EU member states.

• greater legal certainty that judgments from UK courts would be recognised and enforced in other contracting states.

• the ability for parties to agree non-exclusive or asymmetric jurisdiction clauses in the knowledge that judgments from courts chosen by these clauses will be enforceable.

Enforcement of judgments may be refused in certain circumstances. These include where the judgment was obtained by fraud, or the defendant was not notified of the proceedings in sufficient time. That said, the Court has no ability to review the merits of the judgment or interfere with the original court’s decision.

How could it impact your business?

This will be of particular benefit to UK businesses and individuals who deal with EU related matters.

Whilst the convention will not extend to all matters (it won’t extend to disputes involving Wills and succession, family law, insolvency, defamation, intellectual property and competition issues), according to the Secretary General of the Hague Conference on Private International Law, it will provide “a much-needed and long-awaited piece of the ‘puzzle’ that is cross-border dispute resolution”.

The UK Government hopes that joining Hague 2019 will enhance the UK’s status as a forum for dispute resolution by providing greater legal certainty that judgments from the Courts in the UK will be recognised and enforced in other states worldwide, and vice versa. This will have a knock-on benefit to UK based business want to retain the UK as a dispute resolution forum for international trade.

What steps should you take?

The bases for recognition and enforcement are set out in the convention. You should consider reviewing your standard terms and wider commercial contracts to ensure that choice of law and jurisdiction provisions are aligned with the Convention.

You may want to consider the impact of retaining exclusive jurisdiction clauses and the impact that this may have on your ability to rely on the Convention to enforce judgments in other member states.

CIPD and Prospect a paper on improving workplace productivity

The CIPD and Prospect trade union recently published a paper (the Paper) detailing steps to improve workplaces and working relationships to support economic growth. The Paper suggests that these steps could be implemented immediately by the newly elected Labour Government, and the King’s Speech suggests that some of these will be. The recommendations made by the CIPD and Prospect include:

1. Establishing a Workplace Commission to strengthen social partnerships at a national level and co-ordinate the policy-making process across government departments.

2. Developing a more progressive labour market enforcement system to play a more proactive role in improving employment standards and working practices and improving employer compliance.

3. Establishing a Single Enforcement Body supporting the effectiveness of the employment tribunal.

4. Raising awareness of employment rights.

The estimated total cost of the recommendations is approximately £350m a year. The Paper suggests that there would be no need for additional government spending; instead, the proposals could be funded through minor changes to existing spending programmes on research and development tax relief.

How could it impact your business?

The recommendations made in the Paper are changes that will need to come from the new Government by way of new public policy. The seismic changes that are recommended in the Paper are likely to take some time (potentially longer than their first 100 days in power), however, any change that does come into place is likely to mean that there will need to be more thorough internal processes within workplaces to ensure compliance.

What steps should you take?

Research cited in the Paper found that improving HR capability, particularly in smaller businesses, will help to resolve conflicts before matters escalate. This research concluded that employers, if they haven’t already, should adopt formal practices for dealing with disciplinary action. This in turn would mean that dismissal could be avoided in many cases by resolving any performance issues and ensuring that the employees understand any issues and have time to improve their performance.

With the Labour Party and its Cabinet now settled into Government, and their sights clearly set on strengthening the employment rights landscape, it will fall to employers to ensure policy changes are reflected in their internal procedure.

Dismissing an employee during their probationary period

The Employment Tribunal has recently handed down the remedy judgment in Mrs R Wright-Turner v London Borough of Hammersmith and Fulham and Ms K Dero awarding almost £4.6 million to the Claimant. This is believed to be one of the highest, if not the highest, figure for a judgment of this kind.

The Claimant suffered from ADHD and, after spearheading the response to the Grenfell Tower crisis with her previous employer, she was then diagnosed with PTSD. The Claimant was employed by the Respondent for a period of nine months as Director of Public Services Reform, part of the Senior Leadership Team. Her physical and mental health deteriorated during her employment with the Respondent.

Shortly before the end of her probation, and after the Respondent had found out she suffered with ADHD, she was called into a meeting with the Respondent. After this meeting, she had a panic attack, was rushed to A&E and found to be traumatised, depressed and suicidal. She was signed off work and the Respondent was advised not to contact the claimant during this period.

The Respondent subsequently sent a letter to the Claimant stating that her probationary period had been extended. The letter was found to have been backdated to appear as though it had been written before her initial probationary period had expired. The Claimant raised a grievance, and a letter of dismissal was then sent to her, which was also found to have been backdated to appear as though it had been written before she had raised a grievance.

How could it impact your business?

Whilst this is an unusual case, it is an important reminder to employers of the potential costs of neglecting their duty to accommodate employees with disabilities. Here, the Claimant was a very high earner with a good pension but was treated particularly poorly and that had a significant impact on her health.

What steps should you take?

In this case, additional compensation of £270,000 was awarded to the Claimant as a result of the Respondent failing to follow the ACAS Code of Conduct. It is imperative that employers follow the ACAS Code of Conduct to avoid a Tribunal applying an uplift in the event of compensation being awarded.

This case strongly highlights that dismissing an employee during, or at the end of, a probationary period will still carry a risk where there is any element of discriminatory behaviour involved.

 

EU Green Claims Directive

Claiming to be green is becoming an increasingly important parameter of competition for brands seeking to differentiate themselves from their competitors. However, overstating green credentials (Greenwashing) presents a significant compliance risk, and the European Commission estimates that over 53% of Green Claims made in the EU are unsubstantiated, vague or misleading.

Tackling Greenwashing has recently become a clear priority for regulators globally, including the UK’s Competition and Markets Authority (CMA) - see our coverage of the recent undertakings accepted by the CMA in relation to green claims in the fast fashion sector in our April Horizon Scanning update. The EU has now reached its position on the Green Claims Directive (Directive), its answer to Greenwashing.

Negotiations on the Directive are set to commence in the next EU legislative cycle and the requirements set out under the Directive could take effect as early as Q2 of 2026.

How could it impact your business?

The proposed Directive will be broadly applicable to all traders (save for those with a turnover under £2 million) that market products to consumers in the EU and the EEA (European Economic Area), which will include UK traders.

Like the UK’s Green Claims Code, the Directive aims to make green claims reliable, comparable, and verifiable to enable consumers to make informed choices when purchasing goods or services and includes requirements for labelling and communication of green claims.

However, the Directive goes further than the Green Claims Code, establishing a mandatory third-party verification process for claims:

• Every green claim must be supported by an assessment that meets explicit criteria (including the Product Environmental Footprint – PEF);

• Each green claim must then be verified by an independent third-party verifier with a certificate of conformity issued before the claim is made to consumers;

• The certificate of conformity will then be valid across the EU; and

• Details of the assessment and certificate must be disclosed and linked to the green claim, providing consumers and regulators with an accessible medium to inspect the claim, verify its credibility and detect greenwashing.

The EU has delegated the determination of penalties to Member States. However, the Directive stipulates that when setting maximum fines as a proportion of company turnover, Member States should not set the maximum fine below 4%, with Member States free to set higher maximum statutory limits should they wish.

What steps should you take?

Businesses that use green claims in advertising should determine whether their green claims will adhere to the Directive. For businesses trading in both the UK and the EU, green claims should be reviewed in line with both the Directive and the Green Claims Code by carrying out a gap analysis between existing policies and procedures in relation to green claims, and the requirements of the Directive.

Where Green Claims are appropriately evidenced, businesses should monitor and update claims where the evidence substantiating the claim has changed, including only using claims such as net zero, carbon neutral, and eco-friendly where these are substantiated by verifiable evidence.

Right to work checks

2024 has seen multiple changes to the Home Office’s guidance “Employer’s Guide to Right to Work Checks” (the Guidance). The latest changes were on 21 June 2024 and include updates to the guidance on right to work checks for EEA citizens with pre-settled status and clarification on the follow-up checks required for those with Biometric Residence Permits (BRPs) and eVisas.

How could it impact your business?

Since Brexit, many EU nationals have “pre-settled” or “settled” status under the EU Settlement Scheme. Unlike settled status, pre-settled status is for a limited duration, so follow-up right to work checks were required. However, the Guidance now confirms a check on those with pre-settled status is only required before employment begins; with no follow-up checks needed. As long as the initial check is done correctly and the employer is not knowingly employing an illegal worker, the statutory excuse should be maintained.

In addition, the Guidance clarifies the position regarding BRPs. The Home Office are replacing BRP cards with eVisas by 2025 and therefore, BRP cards will often have an expiry date of 31 December 2024. However, the date of 31 December 2024 is usually the card expiry, not the expiry of leave, which will instead be on the online right to work check result.

The Guidance now clarifies that a follow-up check is not needed until the individual’s permission is due to expire. However, this will be 31 December 2024 if the employer has taken that date as the expiry date of permission, such as if they previously did a manual check on a BRP with 31 December 2024 as the expiry date (at the time when a manual check on a BRP was permissible).

What steps should you take?

Employers should take care when conducting right to work checks, as it is easy to make mistakes and the penalties for doing so can be very costly.

The updates above will provide some welcome flexibility and clarity. However, if employers do still decide to do follow-up checks where they are no longer required, they must ensure to do so in a non-discriminatory manner.

The changes also highlight the importance for Employers to always refer to the up-to-date version of the Guidance, which frequently changes, often without warning.

Update to the No Re-Export to Russia rules

The EU has recently updated its Sanctions in response to Russia’s invasion of Ukraine, including additional asset freezes, and the introduction of a number of anti-circumvention measures.

To complement the 14th package of restrictive measures against Russia, the EU has introduced new guidance in relation to the “no re-export to Russia” clause, mandated in any contracts that have a link to Europe and involve the export of restricted goods or services to a country outside the European Union (save for a small number of exempted countries including the UK and the United States). This newly introduced package has an increased focus on targeting entities attempting to circumvent the rules, it further extends the extra-territoriality of the existing sanctions packages and is a warning for those companies trying to flaunt the sanctions rules.

How could it impact your business?

New measures introduced by the European Council in the 14th sanctions package include:

• Liability for Parent Companies: For parent companies, a new rule which places liability on EU persons (legal or natural) if they fail to undertake "best efforts" to prevent any non-EU legal entities they "own or control" from participating in activities that undermine the sanctions measure could present a significant compliance risk. The legislation does not prescribe specific actions that parent companies, or companies with ownership or control must take, and the legislation indicates that the rules will be interpreted considering the size and risk profile of the entities involved.

• Extension of no re-export clause: the scope of agreements which must include a no re-export clause has been extended to include agreements relating to intellectual property rights (IPR), trade secrets, or granting rights to access or re-use of any material or information protected by IPR, or protected as trade secrets.

• Increased Due Diligence Requirements: amendments to the existing sanctions regime set out that EU entities who sell, supply, transfer or export Common High Priority items to third countries must take proactive, preventative, compliance measures to mitigate the risk of export to Russia. EU entities and their non-EU subsidiaries must conduct a documented risk assessment of potential diversion of items to Russia and mitigate such risks by implementing appropriate policies, procedures and controls.

• Energy Sector Restrictions: sanctions targeting the Liquefied Natural Gas (LNG) industry in Russia, prohibiting the provision of goods, services and technology to LNG projects within Russia and the transshipment of Russian LNG through EU ports (with a 9-month transition period) are introduced under the existing sanctions package.

• Extension of export restrictions: the 14th package extends the existing export ban to include additional goods, including (but not limited to) all-terrain vehicles, excavating machinery, and certain computer and electrical equipment.

• Extension of asset freeze: a number of additional legal and natural persons have been individually sanctioned in the 14th sanctions package. Most significant to note is the sanction of groups which are suspected of trying to circumvent the existing sanctions rules – adding an additional risk to breaching sanctions rules.

What steps should you take?

The extension of the scope of the no re-export clause should be the primary area of focus for businesses with any link to Europe, particularly for European entities with non-EU subsidiaries. Whilst the Council does not prescribe what may constitute best efforts for the satisfaction of the sanctions rules, the Commission has indicated that it expects that the no re-export clause should be included in the contracts of non-EU subsidiaries, and that appropriate policies, including in relation to due diligence and monitoring, should be extended to non-EU entities. The deadline for the implementation of the clause into existing contracts is 1st January 2025.

Any businesses that supply goods to third countries should review their existing agreements in line with the updated sanctions regime to ensure ongoing compliance.

Product Safety and Metrology Bill

The new UK Government has announced its intention to introduce legislation on product safety in the UK by implementing the Product Safety and Metrology Bill.

How could it impact your business?

The purpose of the Bill is to introduce further protection for consumers, with the background briefing note indicating that in scope products will be those “used by every person in the country”, as well as allowing the UK to keep up to date with “modern day safety issues”.

The Bill will also aim to project businesses, with the Government stating that it will ensure “that the law can be updated to recognise new or updated EU product regulations, including the CE marking, where appropriate to prevent additional costs for businesses and provide regulatory stability”. The Government also added that “the legislation will also ensure the UK can end recognition of EU product regulations, where it is in the best interests of UK businesses and consumers”.

Key proposals are:

• to give the UK autonomy to either align with, or diverge from, future EU regulations based on national interests

• to allow for new technology risk protection e.g. emerging risks posed by AI

• regulating modern business models such as online marketplaces

• introduce measures to improve enforcement.

What steps should you take?

No immediate action is needed, however businesses should be proactive in adapting to these changes as more detail is published to ensure continued compliance with mandatory legislation.

UK privacy law

The Data Protection and Digital Information Bill (DPDI) covered in our January horizon scanning update promised to reform specific aspects of UK data protection law by making the rules less cumbersome for certain lower risk situations. The Bill had not received royal assent prior to the dissolution of parliament ahead of the general election and will not now become law.

The King’s Speech has since provided some clarity as to what is in store for UK privacy law reform, with the announcement of a new Digital Information and Smart Data Bill (DISD).

How could it impact your business?

The DISD vows to ‘harness the power of data for economic growth’ through various initiatives. It is likely that these changes will be most relevant to those involved in the use or development of data related technologies.

The DISD would establish ‘Digital Verification Services’ designed to take advantage of technology in everyday life, supporting the development and implementation of secure products and services from ‘certified providers’. The government’s briefing note offers examples of where these Digital Verification Services could be deployed, including pre-employment checks and in connection with the purchase of age restricted products.

The DISD also pledges to modernise and strengthen the powers of the ICO, along with other reforms intended to maintain high levels of protection, whilst providing clarity that allows for the ‘safe development and deployment of … new technologies’.

There appears to be no intention to make current requirements more stringent – in fact, the DISD may be a welcome change for businesses hoping to use data as a strategy for innovation. It is hoped that the DISD’s less radical reforms compared to those previously proposed in the DPDI are less likely to threaten the UK’s adequacy status in the eyes of the EU.

What steps should you take?

At the moment the anticipated effect of the DISD is somewhat speculative, being based solely on the details provided within the King’s Speech. Businesses should look out for the draft DISD to understand the practical effect of the proposed changes. For now, it seems likely that some of the more drastic changes intended to be brought about by the DPDI can be forgotten about, such as the expansion of the ‘legitimate interests’ lawful basis and any change to the role of the Data Protection Officer. From what we know so far, the DISD will have a much stronger focus on technology and innovative uses of data.

At this stage the DISD is not law and so UK businesses should continue to comply with all aspects of current data protection laws. New technology products and service offerings making use of personal data must be designed with privacy in mind and appropriately risk assessed in line with current requirements.

Employment Rights Bill

At the recent State Opening of Parliament, the Government confirmed its plans to introduce a raft of new employment rights via a new Employment Rights Bill.

The Bill is promised to be delivered within the first 100 days, which means that we can expect the final text of the bill before 12 October 2024.

How could it impact your business?

The changes are vast, and include:

• a ban on "exploitative" zero hours contracts;

• ending "fire and refire";

• a new suite of "day 1" rights - parental leave, sick pay, and protection from unfair dismissal (subject to a probationary period to assess new hires);

• removing the lower earnings limit and 3 day waiting period on SSP;

• flexible working as a default for all workers;

• enhanced maternity rights;

• a "Fair Work Agency" to strengthen enforcement; and

• updated trade union legislation.

While the prospective changes are wide-ranging, as with all things, the devil will be in the detail. We expect the government to carry out a consultation with employers prior to bringing the legislation to Parliament.

What steps should you take?

Before we have the detail of the legislation, it is challenging to know what steps should be taken at this time. However, it is clear that the strengthening of enforcement rights will mean that it is important for employers to ensure that they know about, and comply with, their responsibilities.

In the meantime, the prospect of day-one rights for unfair dismissal is, at first glance, probably the most concerning for businesses and is something to bear in mind at this early stage when reviewing new hires that are coming into the business. Employers are well-advised to review their recruitment processes and use of probationary periods in preparation.

A new Labour Government: What can we expect for immigration?

Given Labour’s victory in the general election, an important question on employers’ minds is what they can expect from a new Labour government in 2024.

For the majority of immigration law, firm plans are yet to be laid out. However, a clear commitment to reducing net migration has been maintained and so we have set out below some areas that may be of interest to employers in relation to the Government’s plans for immigration.

How could it impact your business?

In Labour’s manifesto, they stated they would reform the points-based immigration system, with appropriate restrictions on visas. The Government have not yet provided details as to what this new system or visa restrictions would look like. In addition, they have not announced plans to reverse policies, such as the increase in the Skilled Worker minimum salary. Although the King’s speech set out that a new bill would be introduced to “modernise the asylum and immigration system”, the available information on the bill relates to asylum, the Border Security Command and organised immigration crime. Therefore, it does provide clarity for most of immigration law.

However, a second bill announced in the King’s speech will establish “Skills England”, a partnership that will work with various bodies, including the Migration Advisory Committee, to build and maintain an assessment of the UK’s skill needs. The background briefing notes for the speech set out dissatisfaction with the increase in work visas and states they intend, through linking migration data and skills policy, to ensure training in England accounts for the overall needs of the labour market. This expands on the intentions Labour expressed in their manifesto to link immigration and skills policy and to upskill UK residents, thereby reducing the reliance on worker’s from overseas.

What steps should you take?

The landscape of immigration law will change with the new Government, but how quickly these changes take place is yet to be seen. Labour’s plans to reduce net migration may make it more difficult for employers to recruit workers from overseas and to fill roles within their businesses, but how far the policies to upskill the domestic workforce will go is yet to be seen. This uncertainty also comes at a time when a lot of employers will be feeling the impact of policies recently introduced by the Conservative Government. However, until the precise details of the Government’s intentions are announced, the impact is difficult to predict. For now, employers should continue to remain vigilant on any immigration updates which might affect their business.

Kings Speech: The Property Headlines

Three key property sector bills were announced this month:

1. Draft Leasehold and Commonhold Reform Bill

2. Renters Right Bill

3. Planning and Infrastructure Bill

As always at this very early stage in the legislative process, there is very little detail to scrutinise but the following notes give a flavour of the new government’s ambitions.

How could it impact your business?

The Draft Leasehold and Commonhold Reform Bill proposes to:

Ban the sale of new leasehold flats so that commonhold becomes the default tenure (see more below).

• Enact remaining Law Commission recommendations to bolster leaseholders’ rights to extend their lease, buy their freehold and take over the freeholder’s building management functions (Right to Manage).

• Reinvigorate commonhold by modernising the legal framework AND restrict the sale of new leasehold flats. The Government will consult on the best way to achieve this. The ambition is for commonhold to become the default tenure. (Today there are fewer than 20 commonhold blocks in England and Wales).

• Regulate ground rents for existing leaseholders.

• Bring the injustice of ‘fleecehold’ private estates and unfair costs to an end. Again, the Government will consult on the best way to achieve this.

• End rights of forfeiture for potentially small unpaid debts.

The Bill will extend and apply to England and Wales.

The Renters’ Rights Bill proposes to:

• End Section 21 ‘no fault’ evictions for residential Assured Shorthold Tenants and reform grounds for possession.

• Introduce new and expanded grounds for possession so that, in theory, landlords can reclaim their properties when they need to.

• Strengthening tenants’ rights and protections, for example by empowering tenants to challenge rent increases designed to force them out by the backdoor.

• Introduce new laws to end the practice of rental bidding wars by landlords and letting agents.

• Create a digital private rented sector database to bring together key information for landlords, tenants, and councils. Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most.

• Support quicker, cheaper resolution when there are disputes, with a new ombudsman service for the private rented sector which will hopefully reduce the need to go to court.

• Make it illegal for landlords to discriminate against tenants in receipt of benefits or those with children.

• Strengthen local councils’ enforcement powers. New investigatory powers will make it easier for councils to identify and fine unscrupulous landlords.

The Bill will apply to England and the majority of the Bill to Wales.

The Planning and Infrastructure Bill proposes to:

• Reform the planning system to enable the delivery of housing and critical infrastructure by speeding up and streamlining the planning process. This is to be achieved by:

• Making improvements to the planning system at a local level, modernising planning committees and increasing local planning authorities’ capacity to deliver an improved service.

• Streamline the delivery process for critical infrastructure including accelerating upgrades to the national grid and boosting renewable energy.

• Simplify the consenting process for major infrastructure projects and enable relevant, new and improved National Policy Statements to come forward, establishing a review process that provides the opportunity for them to be updated every five years.

• Further reforming compulsory purchase compensation rules to ensure that compensation paid to landowners is not excessive where important social and physical infrastructure and affordable housing are being delivered.

• Using development to fund nature recovery where currently both are stalled.

The majority of the Bill is expected to extend and apply to England and Wales. Some measures may also extend and apply to Scotland.

What steps should you take?

No immediate action is needed, however it is worth keeping up to date on progress of the proposed Bills, particularly if you are a property investor/landlord.

 

‘Martyn’s Law’ - Terrorism (Protection of Premises) Bill

The Terrorism (Protection of premises) draft bill, also known as Martyn’s Law was included in the King’s Speech on 17th July 2024 and is expected to become law in 2024.

The Bill is the legislative response to the findings of the Manchester Arena Inquiry and is designed to reduce the risk to the public from terrorism through the protection of public venues, increasing national security and personal safety.

It is not clear at this stage whether the government will propose further amendments to the previous government draft bill and further guidance will follow as to the Parliamentary timetable. This summary is based on the draft bill dated May 2023 and may be subject to further change.

How could it impact your business?

The Bill is targeted at organisations, businesses, local public authorities and individuals who own or operate publicly accessible premises or events. It places a requirement on such premises and events to assess the threat of terrorism and accordingly implement appropriate mitigation measures in the event of a terrorist attack.

Qualifying Premises

To be a ‘qualifying premises’, the premises must:

1. Be primarily used for a use or uses. These are explained further in schedule 1 of the draft Bill, but include, shops, nightclubs, entertainment activities, sports grounds, hotels, recreation, exercise, or leisure premises etc.

2. The premises must be accessible to the public (including those only accessible in part); and

3. Have a public capacity of 100 or more individuals.

There will be different requirements depending on capacity of qualifying premises as follows:

1. ‘Standard Tier’ premises with a capacity of 100-799 individuals

2. ‘Enhanced Tier’ premises with a capacity of 800 or more individuals

Qualifying public events

To be a qualifying event, the event must satisfy the following conditions:

1. Held at a premises which is not a qualifying public premises;

2. The premises (or parts of the premises) are accessible to the public, or a section of the public, for the purpose of attending the event; and

3. Capacity of 800 or more individuals.

This does not include premises such as a place of work, including work events.

Access to the event by members of the public must be by express permission only (whether or not a fee has been paid).

What steps should you take?

Duty requirements for qualifying premises (Standard Tier):

Those responsible for ‘standard tier’ qualifying premises will be required to put in place simple, low-cost and effective activities which seek to improve protective security. This includes:

• Policies and procedures which seek to improve security and preparedness.

• Ensuring staff are given appropriate terrorism protection training (free materials will be given to educate relevant personnel on the threat posed by terrorism).

• Undertaking a standard terrorism evaluation in which they will need to consider how to respond if there is an act of terrorism. E.g. educating staff on locking doors and evacuation procedures.

• Registering the premises with the regulator.

Duty requirements for qualifying premises (Enhanced Tier) and for public events:

Those responsible for ‘enhanced tier’ or Public Events will be required to put in place counter terrorism measures that would be expected to reduce, so far as reasonably practicable, both the risk from an attack occurring, as well as the risk of physical harm being caused if an attack was to occur. This includes:

• Ensuring that terrorism protection training is given to staff.

• Appointing an individual as the designated senior officer, who must complete and regularly review their terrorism risk assessment.

• Considering the types of terrorism activities that are most likely to occur and the ‘reasonably practicable’ measures that might be expected to reduce the risk of an attack occurring, or the risk of physical harm to the public as a result of an attack.

• Keeping and maintaining a security plan, which must also be provided to the regulator.

• Registering the premises with the regulator.

Persons responsible for a qualifying public event will also be required to give notice of the event to the regulator.

Sanctions

In the event of non-compliance with the Bill, the regulator (as yet to be designated under the legislation) will have the ability to impose a range of civil sanctions. The Bill will also provide for certain criminal offences. It will be a criminal offence to fail to comply with a contravention notice or restriction notice and to provide false or misleading information in compliance.

The regulator will be able to issue a contravention notice to a person they believe to have not complied with the new requirements. The notice will require the person to remedy the non-compliance.

The regulator will be able to issue civil monetary penalties, it is expected that these will be issued following failure to comply with a contravention notice.

• For standard duty premises, a maximum fixed penalty of up to £10,000.

• For enhanced duty premises or qualifying public events, a maximum fixed penalty of either £18m or 5% of the worldwide revenue (whichever is higher)

The regulator may require a daily penalty to be paid until the contravention ceases, where there is non-compliance that persists after the period for payment of the fixed penalty expires.