Report Retail - TLT - 2015 - Retail Risk Report
Transcript of Report Retail - TLT - 2015 - Retail Risk Report
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NEXTPREVIOUSBACK TO TIMELINE
RETAIL RISK REPORTKey legal and regulatory changes in 2015
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Contents
Key regulatory changes
Retail regulatory timeline
Reform to EU Brussels Regulation on cross-jurisdictional disputes
Export sanctions update
Consultation on sentencing for H&S offences closes
Magistrates’ Court given power to impose unlimited fines for regulatory offences
Shared parental leave
Pension freedoms
New CDM Regulations come into force
Groceries Code Adjudicator granted power to fine supermarkets
Government tightens privacy laws for unsolicited marketing communications
Cap on interchange card fees
Northern Ireland prize promotions
New EU Consumer Product Safety Regulations expected
EU consumer dispute resolution legislation
EU to pass new Cyber Security Directive
UK deadline for implementing collective redress principles
Restriction on backdated holiday pay claims
CAP Code consultation on sales promotions
UK deadline for implementing EU cyber crime law
Tax-free childcare scheme to be introduced
Single use plastic bag charges
The Consumer Rights Act
Deadline for compliance with Energy Savings Opportunity Scheme (ESOS)
New EU Data Protection Regulation proposals to be passed
Zero hours contracts
About us
Foreword 3
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Foreword
In January 2015 we published our
second Retail Growth Strategies
Report, which provided a windowinto the thinking and intentions of
100 top UK retailers. As part of that
report, we asked retailers about their
legal and regulatory concerns for
2015 and found that cyber security,
changes to consumer rights and data
protection came out on top.
Building on this research, we have
developed this Retail Risk Report,
which provides a single point of
reference to help retailers understandthe legal and regulatory changes
taking place in the year ahead.
The report also provides some
very practical guidance to help
you prepare for these changes.
So what should retailers be looking
out for in 2015? Well, the year
is already shaping up to be very
eventful, with lots of regulatory
changes due to come into force.
Consumer rights law remains a
particularly hot topic for retailers.
At the end of 2014, new information
requirements in consumer contracts
were introduced and consumers were
given the right to take civil action
against traders for misleading
trading practices.
In October 2015 the Consumer Rights
Act will come into force, which will
enhance the rights of consumers. Weare also expecting other changes to
the consumer protection landscape
including the UK implementation of
EU regulations governing consumer
dispute resolution and product safety.
We are also expecting new EU Data
Protection Regulation proposals to be
passed towards the end of the year.
Given the importance of data to most
retailers, this is likely to have a major
impact and it’s vital that you startpreparing as soon as possible.
There are also a number of major
employment-related regulatory
changes including the introduction
of new shared parental leave rules
and a cap on claims in respect of
retrospective holiday pay.
We hope you find this report helpful
as you plan for the year ahead. If
you have any questions about thesechanges or would like help preparing
for them then please do get in touch.
Kerry Gwyther
Partner and Head of Regulatory, TLT
T 0333 006 0155
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Retail regulatory timeline for 2015Click on the links below to find out more about each change.
HIGH MEDIUM LOW
IMPACT ON RETAILERS
JANUARY 2015
Reform to EU Brussels
Regulation on cross-
jurisdictional disputes
APRIL 2015
Cap on interchange card fees
12 MARCH 2015
Magistrates’ Court
given power to impose
unlimited fines for
regulatory offences
JANUARY 2015
Export sanctions update
18 FEBRUARY 2015
Consultation on sentencing
for H&S offences closes
5 APRIL 2015
Shared parental leave
6 APRIL 2015
Pension freedoms
6 APRIL 2015
New CDM Regulations come into force
6 APRIL 2015
Groceries Code Adjudicator granted
power to fine supermarkets
6 APRIL 2015
Government tightens privacy
laws for unsolicited marketing
communications
JULY 2015
EU to pass new Cyber
Security Directive
9 JULY 2015
EU consumer dispute
resolution legislation
JULY 2015
Restriction on backdated
holiday pay claims
JULY 2015
UK deadline for implementing
collective redress principles
4 SEPTEMBER 2015
UK deadline for implementing
EU Cyber crime law
SEPTEMBER 2015
Tax-free childcare scheme
to be introduced
MID-LATE 2015
Northern Ireland prize
promotions
MID-LATE 2015
New EU Consumer
Product Safety
Regulations expected
MID-LATE 2015
CAP Code consultationon sales promotions
1 OCTOBER 2015
Single use plastic bag charges
OCTOBER 2015
The Consumer Rights Act
DECEMBER 2015
Deadline for compliance
with ESOS
LATE 2015 OR EARLY 2016New EU Data Protection Regulation
proposals to be passed
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Reform to EU Brussels Regulation on cross-jurisdictional disputes
Export sanctions update
Key regulatory changes
JANUARY 2015 TRADE IMPACT ON RETAILERS
Medium
JANUARY 2015 TRADE IMPACT ON RETAILERS
High
What is changing?
The 2001 Brussels Regulation, which determines
matters of jurisdiction and enforcement of
judgments within the EU, was replaced by the
Recast Brussels Regulation on 10 January 2015.
The default rule under the 2001 Regulation
that defendants should be sued in their home
courts remains unchanged. However, there are a
number of key changes, including:
• A consumer from a non-EU country will
now have the choice of whether to bring
proceedings in the courts of that non-EU
country or in the courts of the domicile/place
of establishment of the trader.
• Employees will also have a wider choice of
where to bring an action in cross-border
employment disputes.
• A Member State court judgment will be
immediately enforceable in another Member
State court without the need to obtain a
declaration of enforceability.
What is changing?
The US and EU have already imposed an array of
sanctions on Russian individuals and businesses
in response to the annexation of Crimea and the
crisis in eastern Ukraine.
In a tit-for-tat move, Russia has banned theimport of certain food products from the US, the
EU, Norway, Canada and Australia.
Both the US and the EU could impose additional
sanctions if the situation in the Ukraine continues
to deteriorate.
What should retailers do to prepare?
• Familiarise yourself with the revised Regulation
if your company is, or could be, involved in
any cross-border disputes.
• Be prepared for consumers and employers
to take advantage of the wider choice of
jurisdiction granted to them under the
Recast Brussels Regulation.
• Ensure that, where possible, the same
jurisdiction provisions are incorporated into all
related agreements with suppliers to avoid a
dispute about which country’s courts should
have jurisdiction to hear disputes arising out
of the agreements.
What should retailers do to prepare?
The evolving sanctions position heightens the
need for any businesses with a direct or indirect
Russian nexus to monitor their overseas trade
relations closely in case they are caught by the
current regime or any changes.
It is vital that exporters routinely screen their
current and potential trading parties against
sanctions lists. This includes a consideration of
whether parties are “owned or controlled” by
sanctioned entities.
Consider your supply chain – how is it affected
by the sanctions, do you need to put in place
contingency measures now in case the situation
worsens, are you exposed contractually if you
cannot import/export due to the sanctions?
Edmund Fiddick
Partner
T 0333 006 0208
Emma Flower
Partner
T 0333 006 0264
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Consultation on sentencing for H&S offences closes
18 FEBRUARY 2015 HEALTH & SAFETY IMPACT ON RETAILERS
Medium
What is changing?
The way that companies are fined for breaching
health and safety laws is due to change in 2015.
The draft sentencing guidelines cover health and
safety offences, corporate manslaughter and food
safety and hygiene offences.
The main change in the draft is that the level of
fines will be linked to annual turnover. This means
that larger companies can expect to pay much
higher fines than smaller companies for comparable
offences. It is also expected that the level of fines
will increase across the board.
The public Consultation closed on 18 February
2015, with the results to be published later
in spring.
What should retailers do to prepare?
When then the proposed guidelines are adopted they
will not change the law, just the way companies
are sentenced.
However, retailers with large turnovers may wish to
re-assess the risks associated with health and safety
breaches given that the fines involved are now likely
to be much higher.
Under the new sentencing guidelines, the costs
of carrying out periodic health and safety audits
throughout your company are likely to be minor
compared to the costs if something goes wrong.
The proposals are expected to be adopted, subject
to further amendments, later in 2015.
Duncan Reed
Associate
T 0333 006 0742
Magistrates’ Court given power to impose unlimited
fines for regulatory offences
12 MARCH 2015 IMPACT ON RETAILERS
High
What is changing?
The upper limits on most fines that can be
imposed in the Magistrates’ Court have been
removed. The new rules apply to a number of the
main regulatory risks in the retail sector such asconsumer protection and product liability law.
Previously, fine levels in the Magistrates’ Court
were controlled by five different statutory levels
(£200, £500, £1,000, £2,500 and £5,000). In
some cases higher fines beyond this scale were
possible, for example £20,000 for some health
and safety offences and £50,000 for certain
environmental offences.
This has now changed. For all offences committed
after 12 March 2015, the limits on all fines of
£5,000 and above have been scrapped.
Any statutory limits on fines of below £5,000 for
less serious offences (ie levels 1-4 offences) willremain in force.
What should retailers do to prepare?
Retailers need to be aware of the uncertainty created
by the new rules with regard to the level of sentencing
of many relevant regulatory offences. Until now,
organisations have known what the ‘worst case scenario’would be in terms of fines in the Magistrates’ Court
because of the statutory cap on fines.
The changes mean that Magistrates now have the
power impose unlimited fines for breaches of the
following regulatory offences:
• consumer protection law;
• liability for defective products;
• waste management offences;
• product labelling law; and
• all health and safety law, including fire safety
and incidents where employees are injuredat work.
The change emphasises the need for retailers
to ensure legal compliance in these areas.
REGULATORY
Duncan Reed
Associate
T 0333 006 0742
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Shared parental leave
Pension freedoms
5 APRIL 2015
6 APRIL 2015
HR
PENSIONS
IMPACT ON RETAILERS
Low
What is changing?
From 5 April 2015, parents are entitled to take
Shared Parental Leave (SPL). SPL is available
in respect of children whose expected week of
childbirth (EWC) begins on or after 5 April 2015.
The SPL scheme also applies identical provisions
to the adoption process.
A mother is able to end her maternity leave
and share the untaken leave with the other
parent. SPL can either be taken consecutively or
concurrently by parents. Parents can also request
periods of discontinuous leave.
Parents are not obliged to take SPL and 52
weeks of maternity leave shall remain the default
position. However, additional paternity leave isno longer available.
Eligible parents are entitled to statutory shared
parental pay which closely matches the
maternity pay scheme.
What is changing?
From 6 April 2015, individuals over the age
of 55 are allowed full access to their defined
contribution (DC) pension pots.
Previously, pensioners could only purchase
annuities from insurance providers or withdrawlimited sums from their savings each year.
Now:
• Provided pension scheme documents allow the
flexibilities, individual members of DC schemes
can access all their savings at any time, subject
to taxation at their marginal rate. 25% of any
lump sum withdrawals will be tax free.
• If increased flexibility isn’t offered in a
member’s current scheme, individuals can apply
to transfer to a different scheme which does.
What should retailers do to prepare?
The key is to get policies up to date and to ensure
that HR and managers are ready to deal with requests.
Employers operating enhanced maternity pay
schemes need to consider whether enhanced
shared parental pay will be offered.
What should retailers do to prepare?
Employers need to:
• Decide how much flexibility to offer members.
• Check current pension scheme arrangements
to consider:
• if the scheme documents allow the new
flexibilities to be implemented; and
• whether these documents need to be
amended to include these changes.
• Decide whether to allow any defined benefit
(DB) scheme members to transfer their
savings to a DC scheme to benefit from the
new flexibilities.
• Ensure DB scheme members with pots over
£30,000 receive free independent guidance
before agreeing any transfers.
• Prepare updated communications for members
and be ready to answer their queries.
Richard Brennan
James Dean
Associate
T 0333 006 0684
Partner
T 0333 006 0717
IMPACT ON RETAILERS
Medium
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New CDM Regulations come into force
Groceries Code Adjudicator granted power to fine supermarkets
6 APRIL 2015
6 APRIL 2015
HEALTH & SAFETY
SUPERMARKETS
IMPACT ON RETAILERS
Low
IMPACT ON RETAILERS
Low
What is changing?
The amended Construction (Design and
Management) Regulations 2015 came into force
on 6 April 2015.
• The headline change is the decision to scrap
the role of CDM co-ordinator and replace it
with a newly defined role of Principal Designer.
• The new regime will also apply for more short-
term projects, including many which would
have been deemed too small to trigger the
requirements under the previous
CDM Regulations.
• In addition, there are enhanced duties under
the Regulations for “Clients”, which could
include retail developers.
What is changing?
Legislation giving the Groceries Code Adjudicator
(GCA) the power to impose fines of up to 1% of
a supermarket’s annual turnover (which could
amount to hundreds of millions of pounds) came
into force on 6 April 2015.
The GCA, which was set up in January 2013 to
ensure that the UK’s 10 major supermarkets treat
their suppliers fairly, has previously only been
able to ‘name and shame’ grocers that breach the
Groceries Supply Code of Practice (the Code).
There has been criticism that the legislation does
not act retrospectively (meaning years of trading
activity will go unchecked) and that the GCA
may not have enough resources to investigate
possible breaches of the Code properly.
Consequently, suppliers may decide that the
best way to seek redress against a retailer that
has breached the Code is by bringing their own
arbitration claim; however, suppliers’ appetite
to challenge retailers directly remains to be seen.
What should retailers do to prepare?
The requirements will be of note for any retailer
involved in construction projects.
• If a retailer is heading-up a large project
(for example constructing a new retail premises),
it will need to consider the changes in rules
for the appointment of Principle Designers.
• Retailers for whom construction works are being
carried out should also consider their enhanced
duties as the Client under the Regulations.
• Even if a retailer is carrying out a minor project
(for example a refurbishment or extension),
the CDM Regulations might be triggered under
the new rules if more than one contractor
is engaged.
What should retailers do to prepare?
The major supermarkets have already been
taking steps to ensure compliance with the Code
including appointing a code compliance officer
and giving training to staff.
Moreover, the recent legislation and increasedpublic scrutiny may encourage supermarkets to
ramp up their compliance efforts.
Duncan Reed
Miles Trower
Associate
T 0333 006 0742
Partner
T 0333 006 0574
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Government tightens privacy laws for unsolicited
marketing communications
Cap on interchange card fees
6 APRIL 2015
APRIL 2015
DATA PROTECTION
PAYMENT SERVICES
IMPACT ON RETAILERS
Medium
IMPACT ON RETAILERS
Medium
What is changing?
On 6 April 2015 the Data Protection Act
1998 was amended to make it easier for the
ICO to impose financial penalties in relation
to unsolicited direct marketing calls, texts
and emails.
The previous legislation had been criticised by
privacy campaigners who said it was too difficult
for the ICO to fine organisations guilty of making
unsolicited marketing communications because
of the requirement to prove the conduct caused
“substantial damage or substantial distress.”
Under the amended legislation, this requirementhas been dropped.
In addition, the government has confirmed that
it will be looking at whether the powers the ICO
has to hold to account board level executives are
sufficient or whether more needs to be done.
What is changing?
The European Parliament voted in favour of
Regulation on multilateral interchange fees for
card-based payment transactions in March 2015.
The Regulation plans to introduce a cap on
interchange fees that banks charge retailersto process payments. The cap is due to apply
to both cross-border and domestic card-based
payments.
For debit card transactions the cap will be 0.2%
of the transaction value and for credit card
transactions the cap will be 0.3%.
The caps will take effect 6 months after the
Regulation comes into force.
What should retailers do to prepare?
Retailers who send out mass electronic
communications to members of the public when
promoting products or sales need to think carefully
about the risks involved. Are you relying on consent
that has been legitimately obtained?
What the changes mean is that if a large number
of marketing communications are sent out without
valid consent, a retailer could be liable for
monetary penalties even if no harm or distress
is actually caused.
This should be understood in the context of recent
findings by the Nuisance Calls Task Force, whichhighlighted that too many organisations are relying
on consents that have been illegitimately obtained,
for example because the consumer was confused
and did not know what they were signing up for.
Consents obtained through third parties without
checking whether or not they are valid is also
a problem.
Dominic Gilmore
Associate
T 0333 006 1414
Alison Deighton
Partner
T 0333 006 0160
What should retailers do to prepare?
Retailers need to check that the banks processing
their payments apply the new caps on interchange
fees appropriately.
At a European-wide level the expectation is that
this cap will result in significant cost-savings forretailers. In conjunction with the prohibition
on surcharging on these types of card (as being
brought in under the Payment Services Directive
2), it is expected to lead in turn to cheaper goods
and services for consumers.
However, the banks will have reduced revenue,
the shortfall of which may not be entirely offset
by the expected increase in payment volumes.
Consequently, the banks may look for other
potential revenue streams.
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Northern Ireland prize promotions
MID-LATE 2015 ADVERTISING AND PROMOTIONS IMPACT ON RETAILERS
Low
What is changing?
Many retailers will be aware that running prize
promotions in Northern Ireland is complicated
by the country’s strict anti-gambling laws. The
rules prohibit entries into a prize draw that are
contingent on the entrant making a purchase.
Alternative ‘free entry’ mechanics have to be
provided in Northern Ireland.
However, following a public consultation,
Ministers have announced that this rule may be
changed to bring Northern Irish rules in line with
the rest of the UK.
What should retailers do to prepare?
Although the changes have not yet been finalised,
it appears likely that the rules in Northern Ireland
will be relaxed.
This is good news for retailers who of course want
their prize promotions to have as broad a territorial
scope as possible. Assuming the proposed changes
go through, it will not be necessary to adapt the
entry mechanics used in England, Scotland and
Wales for Northern Ireland.
Duncan Reed
Associate
T 0333 006 0742
New EU Consumer Product Safety Regulations expected
MID-LATE 2015 PRODUCT LIABILITY
What is changing?
The Consumer Product Safety Regulations
(CPSRs) are currently going through the European
Parliament but are expected to come into effect
around mid-late 2015.
The new regulations will change the rules interms of product labelling and traceability.
What should retailers do to prepare?
The CPSRs introduce certain requirements for
manufacturers, for example ensuring that products
are marked with a batch number and place of origin,
to assist with identification and traceability.
However, these requirements will impact onretailers too.
• Retailers will have to check that relevant markings
are present on the products they supply.
• Focusing on your suppliers, are the products
your organisation buys compliant with the
CPSRs? Do you, and your suppliers, have
sufficient procedures in place to evidence this?
Duncan Reed
Associate
T 0333 006 0742
IMPACT ON RETAILERS
Medium
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EU consumer dispute resolution legislation
9 JULY 2015 CONSUMER PROTECTION IMPACT ON RETAILERS
Medium
What is changing?
On 9 July 2015 the new Alternative Dispute
Resolution (ADR) Directive comes into force in
the UK.
This lays down the minimum standards for
consumer ADR schemes and proposes to createa centralised system to resolve disputes if a
trader’s ADR scheme is inadequate.
It is also important to be aware of the Online
Dispute Resolution (ODR) Directive further on the
horizon. This is expected to come into effect in
January 2016.
The ODR Regulation aims to provide a free
EU-wide system for resolving disputes between
consumers and traders online.
What should retailers do to prepare?
If you are a retailer, you need to check whether
your own consumer dispute resolution procedures
comply with the minimum requirements in the
ADR Directive.
Retailers that sell products online across Europealso need to familiarise themselves with the
online dispute resolution mechanisms that will be
introduced through the ODR Directive next year.
Kerry Gwyther
Partner
T 0333 006 0155
CAP Code consultation on sales promotions
MID-LATE 2015 ADVERTISING AND PROMOTIONS IMPACT ON RETAILERS
Low
What is changing?
The Committee of Advertising Practice (CAP)
consulted on changing the rules for sales
promotions in December 2014. The amended CAP
Code is likely to come into force later in 2015.
The existing CAP Code places an onerous burden
on promoters in terms of ensuring they have
sufficient stock to meet demand before running a
promotion. At present, promoters not only have to
make a reasonable estimate of customer demand
before running a promotion, they also have to
show they are capable of meeting that demand.
However, CAP is likely to dilute this requirement
by enabling promoters to comply with the Code
by giving sufficient warning to customers aboutlimited availability.
What should retailers do to prepare?
Assuming the proposed changes are adopted,
they will make life easier for retailers when
running promotions involving limited stock.
However, if retailers are unable to accurately
predict what the level of demand will be, they
must make sure that the advertisement is
sufficiently clear as to the extent of availability
and likely demand of stock.
For example, the advertisement could include a
statement such as “limited availability - less than
5,000 items available.”
Broad statements such as “subject to availability”,
however, are unlikely to be enough to comply
with the CAP Code.
Kerry Gwyther
Partner
T 0333 006 0155
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EU to pass new Cyber Security Directive
JULY 2015 CYBER SECURITY IMPACT ON RETAILERS
Medium
What is changing?
The EU Cyber Security Directive is expected to be
passed by the EU in July 2015.
The Directive seeks to impose minimum
obligations on certain “market operators” to
harmonise and strengthen cyber security across
the EU. This could apply to energy suppliers,
e-commerce platforms and app stores.
Some of the obligations placed on market
operators include the requirement to take steps
to prevent cyber attacks and to report cyber
security breaches to a regulator such as the
Information Commissioner’s Office.
What should retailers do to prepare?
Although the Directive is still at draft stage, the
requirement to have in place procedures to combat
cyber crime and report attacks to a regulator could
apply to retailers if a wide definition of e-commerce
platforms is adopted.
In addition, it is thought that the application of
the Directive to ‘food supply chain’ operatives
could potentially bring supermarkets and other
food retailers within the scope of the new rules.
Once adopted, Member States will have 18 months
to enact national implementing legislation,
meaning the Directive is expected to come into
force in the UK around the beginning of 2017.
However, retailers should keep an eye on
developments now, especially if complying with
the Directive will involve upgrading network
security systems.
Alison Deighton
Partner
T 0333 006 0160
UK deadline for implementing collective redress principles
JULY 2015 CONSUMER PROTECTION IMPACT ON RETAILERS
Medium
What is changing?
Back in July 2013, The European
Commission released a series of non-binding
recommendations requiring EU Member States
to introduce collective redress mechanisms to
enable large groups of consumers to bring group
damage claims against companies.
Although the recommendations are non-binding,
they reflect a desire within the EU to encourage
collective redress.
We may see more development in this area,
but for the time being the only area the UK
government intends to enhance its collective
redress procedures is in the area of competition
law. These changes will come into force with the
new Consumer Rights Act in October (see below).
What should retailers do to prepare?
Under the Consumer Rights Act, if a consumer
brings an action against a company for breach of
competition law, all other consumers of the same
class will automatically be deemed a part of that
action (and therefore entitled to damages) unless
they expressly ‘opt-out’. This exposes companies
to much greater damages.
Consumers can still bring collective actions against
companies in other areas too, but only if they all
expressly ‘opt-in’ to the claim.
Nevertheless, the recommendations of the
European Commission appear to signal a trend
towards greater use of collective redress, which
could embolden consumers to bring more group
actions, for example if they have been sold
defective products. An emergence of US-style
‘class action’ cases would represent a
significant change.
Retailers should monitor this carefully.
Duncan Reed
Associate
T 0333 006 0742
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UK deadline for implementing EU cyber crime law
4 SEPTEMBER 2015 CYBER SECURITY
What is changing?
The European Commission passed a Directive in
August 2013 requiring Member States to tighten
up cyber crime laws at national level across
the EU.
The UK has to implement the provisions of theDirective by September 2015.
In order to comply with the minimum standards
set out in the Directive, the UK may need to
create new criminal offences, for example in
relation to illegal access to information systems,
illegal data interference and illegal interception.
What should retailers do to prepare?
The UK government has yet to announce how it
plans to implement the EU Directive, but there is
a possibility it could impact upon retailers’ cyber
security policies.
For example, the government may introducelegislation requiring organisations to report cyber
security incidents to the authorities and ensure
that they have in place procedures to spot
suspicious activity by employees.
While it is too soon to say the extent to which
the new rules will apply to retailers, the Bank of
England has recently advised the government
that cyber security breaches are one of the main
risks to the UK’s economic stability, so there is still
a potential for the government to go beyond the
provisions of the Directive and bring in even
tougher cyber crime laws.
This is an area retailers should monitor closely.
Alison Deighton
Partner
T 0333 006 0160
IMPACT ON RETAILERS
Medium
Restriction on backdated holiday pay claims
JULY 2015 HR IMPACT ON RETAILERS
Medium
What is changing?
Claims in respect of retrospective holiday pay will
be capped at two years.
This is an important development following some
recent case law which suggested that many
employers may have been incorrectly calculating
holiday pay. This is a particular problem for
retailers who may not have included overtime or
commission in holiday pay calculations.
The extent to which retrospective back pay
claims could be pursued remained an arguable
point.
This is welcome legislation as it offers some
certainty to employers provided that the claims
are not submitted before 1 July 2015.
What should retailers do to prepare?
Retailers need to correct holiday pay calculations
going forward. It will therefore be wise to undertake
a comprehensive review of pay practices to assess
potential financial liability.
Consideration should also be given to the
likelihood of back pay claims and the potential
liability. Many unions are raising the issue and are
seeking to negotiate back pay settlements. Care
should be taken before making any concessions to,
or deals with, the unions.
Richard Brennan
Associate
T 0333 006 0684
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14
Single use plastic bag charges
1 OCTOBER 2015 ENVIRONMENTAL
What is changing?
In October, Parliament will implement EU law
introducing a mandatory 5p charge for single use
plastic bags. This law is already in force in Wales
and Scotland.
Organisations found to breach the newregulations can be fined.
What should retailers do to prepare?
The charges are mainly targeted at supermarkets,
but will apply to any retailer that provides single
use plastic bags.
• Does your company want to go down the route
of cutting out plastic bags altogether, as somehave done, or will you introduce the charges?
• Staff will need to be trained and informed about
the consequences of breaching the regulations.
Kerry Gwyther
Partner
T 0333 006 0155
Tax-free childcare scheme to be introduced
SEPTEMBER 2015 HR IMPACT ON RETAILERS
Low
What is changing?
In autumn of this year the government’s new
tax-free child care scheme is scheduled to
commence. An employee will be able to open a
‘childcare account’ to pay someone to look after
their child or children. It will operate like a bank
account but for every £0.80 an employee pays
into the account the government will top up an
extra £0.20.
Unlike the existing employer-supported childcare
schemes, the tax-free childcare scheme does not
rely on employers offering it and any working
family can use it provided they meet the
eligibility criteria.
Existing employer-supported childcare schemeswill be closed to new entrants but will continue
to be available for employees registered with the
schemes for as long as the employer offers it or
until the employee decides to switch to the new
scheme. An employee will be required to give
three months’ notice to their employer if they
decide to switch to the government’s
childcare scheme.
Richard Brennan
Associate
T 0333 006 0684
IMPACT ON RETAILERS
Medium
What should retailers do to prepare?
Although employers are not required to play a
role in the tax-free childcare scheme they can,
for example, as part of their wider ‘family friendly’
policies, offer support including:
• making employees aware of the new scheme
and referring them to Gov.UK for advice in tax
free childcare (for example, when an employee
is going on or returning from parental leave);
and/or
• making payments into an employee’s childcare
account direct using their net pay (payments
cannot be made from the employees gross pay)
or as additional payments. All additional
payments will be classed as earnings and,therefore, will be subject to tax and National
Insurance Contributions
Employers will also need to decide whether to
continue offering schemes for employees already
registered.
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15
Deadline for compliance with Energy Savings
Opportunity Scheme (ESOS)
DECEMBER 2015 ENVIRONMENTAL IMPACT ON RETAILERS
Medium
What is changing?
5 December 2015 is the deadline by which an
organisation that falls within the scope of the
ESOS energy audit has to report its compliance
to the Environment Agency.
What should retailers do to prepare?
Large retailers that fall within the scope of ESOS
will have to:
• measure their total energy consumption overa 12 month period;
• conduct an energy audit to identify cost-effective
energy efficient recommendations; and
• obtain the necessary board level approvals
within the organisation.
The EA must be notified before 5 December once
the above requirements have been implemented.
Duncan Reed
Associate
T 0333 006 0742
Kerry Gwyther
Partner
T 0333 006 0155
The Consumer Rights Act
OCTOBER 2015 CONSUMER PROTECTION IMPACT ON RETAILERS
High
What is changing?
The Consumer Rights Act will become the
centrepiece of UK consumer protection
legislation. It will:
• outline more clearly what a consumer’s rights
are in terms of quality of goods or services and
delivery of goods;
• codify the unfair terms that will be
unenforceable in business to consumer
contracts;
• outline consumer remedies for defective
products, including when a customer is able to
demand a repair, replacement, price reduction
or full refund;
• create new consumer rights in terms of digital
content that is defective or not as described;
and
• introduce new powers for consumers to bring
large-scale ‘class action’ claims for damages
against companies that are found to have
breached competition law.
What should retailers do to prepare?
If you are a retailer you need to:
• Be prepared for customers to assert their rights
citing the new legislation.
• Check customer return, refunds and repairs
polices. Do they comply with the remedies laid
down in the Act?
• Train customer service teams so that they
understand the new legislation before the Act
comes into force.
• Bear in mind that consumer damage claims
arising out of breaches of competition law are
likely to be much higher than before as the new
laws will make it easier to assemble hugeclasses of consumer litigants.
If your business sells digital content online, you
need to be aware of consumer rights in this area,
including the right for consumers to claim
compensation for damage to devices and/or lost
data after using or installing defective
digital content.
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16
Zero hours contracts
New EU Data Protection Regulation proposals to be passed
TIMESCALES UNCERTAIN
EXPECTED LATE 2015 OR EARLY 2016
HR
DATA PROTECTION
IMPACT ON RETAILERS
High
IMPACT ON RETAILERS
High
What is changing?
The government proposes a prohibition on
employers restricting zero hour workers and
low income workers from working for other
businesses. It is also proposed that such
workers will have the right not to be subjected
to detriment as a result of working for otherbusinesses and there will financial penalties for
employers seeking to avoid the ban.
This is clearly a political issue and we would not
be surprised to see further changes or proposals
following the election. For example, Labour
proposes limiting the use of zero hour contracts
to short periods (12 weeks) if it forms a
new government.
What is changing?
The new EU Data Protection Regulation will
harmonise data protection rules across the EU.
Crucially, they also strengthen data protection
rights for individuals and increase the regulatory
burden on businesses.
The legislation has not yet been finalised, but key
changes are expected to include:
• introducing much higher maximum fines for
organisations that breach data protection rules;
• broadening the scope of personal data;
• making the appointment of a Data Protection
Officer (DPO) compulsory for larger
organisations; and
• making it a mandatory requirement for
organisations to notify a data protection
authority if it detects a data protection breach
(this would be the Information Commissioner’s
Office in a UK context).
What should retailers do to prepare?
Retailers should review their practice to assess
the use of zero hours contracts.
If retailers do still feel the need to prevent
workers undertaking work for other business then
alternative contract structures should be considered.
What should retailers do to prepare?
Retailers that have not yet started to think about
the new Data Protection Regulation need to do so
without delay.
The implication of the new laws are wide-ranging,
but the key points to be aware of are as follows:
• A full audit of data protection procedures should
be carried out to ensure that your organisation
is complying with the new laws. If you don’t
have a DPO, should you have one? Is your
organisation processing personal data in line
with the new Regulation? Do you have
procedures in place for notifying the ICO
following data protection breaches?
• Organisations are facing the prospect of
receiving fines of up to €100m or 5% of their
global annual turnover for serious breaches,
putting data protection fines on a par with
anti-trust and anti-bribery sanctions. This has
been described a game-changer: retailers who
ignore data protection rules do so at their peril.
Richard Brennan
Alison Deighton
Associate
T 0333 006 0684
Partner
T 0333 006 0160
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17
About us
Our multi-disciplinary team of retail lawyers has
a national reputation for advising on all aspects
of retail business and retail portfolio management.
TLT’s understanding of the specific and varied
requirements of retailers allows our clients to
get ahead of the competition in this dynamic
and fast-moving industry.
Get in touch
If we can support you in growing
your business or help you deal with
any legal or regulatory challenges
you face, please do get in touch.
Perran JervisPartner and Head of Retail, TLT
T 0333 006 0320
Advertising, marketing
and promotions
Brand management and protection
Competition issues
Construction, refits and capital
investment
Corporate structures, JVs,
acquisitions and disposals
Data protection and privacy
Distribution, logistics and fulfilment
Employment and pensions
Estate management, acquisitions
and development
Services for retailers
Financial services regulation
Health, safety and environmental
International partnering
arrangements, including franchise,
distribution and product licensing
Labelling and packaging
Planning
Procurement of systems and
services, and outsourcing
Product liability and recall
Supply chain disputes
Technology and e-commerce
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II
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