Category Archives: ECJ

Safe Harbor – Shipping Out?

160212 Data TransferSUMMARY: Employers who transfer employees’ personal data to a US office should be aware that they can no longer rely on the Safe Harbor decision to comply with data protection laws.

A recent European ruling means that the Safe Harbor decision is invalid.  Since then, employers have wanted to understand what this means in relation to transferring employees’ personal data; below are some frequently asked questions.

Q1: What is the Safe Harbor decision?

The Safe Harbor decision previously enabled certified organisations to transfer personal data from the EU to the US without breaching European data protection laws.

The Snowden revelations about the US National Security Agency’s surveillance of data held by Safe Harbor participants meant that Safe Harbor’s credibility was seriously undermined.  The revelation indicates that the US is not ensuring an adequate level of protection for personal data.

Subsequently, the European Court of Justice (ECJ) has held that the Safe Harbor arrangement is invalid.

Q2: Does the ECJ’s decision concern our organisation?

Personal data transfers between the EU and the US

If your organisation transfers personal data between the EU and the US it will be of concern; you can no longer rely on the Safe Harbor decision when transferring such data.

The European Commission is attempting to agree a new Safe Harbor package but has not given any time frame for finalising this.

Continuing to transfer data on this basis therefore carries a level of risk.  We suggest ways in which you can manage risk in relation to this at question 3.

Personal data transfers within the EU

If your organisation only transfers personal data within the EU, this decision will not affect you.

Q3: If we cannot rely on the Safe Harbor framework, what are the alternatives?

EU organisations should now consider alternatives to the Safe Harbor when transferring personal data to the US.  These include:

1. Having an employee’s informed express written consent.  Consent may, however, be withdrawn at any time.  Note that it may be considered unfair to make it a contractual requirement for an employee to consent to a transfer of his/her data to the US.

2. Implementing the following:

  • Model contracts – contracts adopted by the European Commission which provide standard wording for the transfer outside the EU; and
  • Binding Corporate Rules – a set of approved internal Codes of Conduct.  The EU’s Article 29 Data Protection Working Party have developed a number of documents to assist.

3. Anonymising or pseudonymising data exported from the EU to the US.

A paper trail should always be kept of any steps taken.

Q4: What are the possible sanctions if we transfer personal data to the US without appropriate alternatives in place?

Legal sanctions in the UK, if the organisation breaches data protection legislation, include:

  • a fine of up to £500,000;
  • the Information Commissioner taking enforcement action against the organisation; and
  • conviction for a criminal offence (which could result in an unlimited fine).

Organisations should also be aware that a breach of the Data Protection Act 1998 is likely to result in damaging adverse publicity and individuals could bring a civil claim against the organisation.

Contact Details

For more details about the issues in this article or if you would like a data protection policy, which we advise all organisations to have, please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.

Collective Redundancy Consultation – when “10 + 10” equals “20” (part 2)

financial legal obligationsSUMMARY: European Court of Justice provides clarity on when the collective consultation obligation arises

BACKGROUND

Current legislation requires employers to collectively consult when they propose to dismiss as redundant at least 20 employees at one establishment within a period of 90 days or less.

In February 2015, we reported that the Advocate General in the “Woolworths case” had indicated that it is not necessary to aggregate the dismissals across all of an employer’s establishments for the purposes of determining whether the collective consultation obligation has been triggered.

The Advocate General’s opinion appeared to give some comfort to employers who were contemplating large-scale redundancies across various sites; collective consultation that may have been triggered in the past, may no longer need to be a future consideration.

The Advocate General’s opinion was a precursor to the European Court of Justice’s (“ECJ”) decision.

THE ECJ’S DECISION

The ECJ was subsequently asked to decide whether the expression “at least 20” refers to the number of dismissals across all the employer’s establishments or only the number of dismissals in each individual establishment.

The ECJ found that “at least 20” requires a separate account to be taken of the dismissals effected in each establishment.

IMPLICATIONS FOR BUSINESSES

The ECJ’s decision means that where an employer is made up of several establishments, collective consultation is only required at those establishments where it is proposed to dismiss 20 or more employees.  There is no requirement to aggregate the dismissals arising across all the establishments.

Employers should however be aware that when contemplating large-scale dismissals across various sites/business units, consideration still needs to be given as to whether those sites constitute separate establishments.

Case

USDAW v Ethel Austin Ltd (in administration) and another UKEAT/0547/12 (European case reference: USDAW and Wilson v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and BIS C-80/14) (the “Woolworths case”)

Contact Details

If you are faced with a potential large-scale redundancy or business re-organisation and you have concerns about identification of an “establishment” for collective redundancies please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

Collective Redundancy Consultation – When “10 + 10” Equals “20”

financial legal obligationsWhere the implementation of a business proposal may result in large scale redundancies a number of legal obligations arise; these include consultation with appropriate representatives and notification to the Secretary of State. Failure to comply with these legal obligations has financial implications which can prove extremely costly.

The Law

Collective redundancy law derives from the European Collective Redundancies Directive which was implemented into domestic law by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). By virtue of section 188(1) of TULRCA employers are obliged to collectively consult where they propose to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.

Crucial Question:

The crucial question for those employers whose businesses operate over a number of sites is “what, for collective redundancy purposes, is one establishment?” There has been a raft of case law on the point. In a number of cases which it decided to deal with together, the ECJ has been asked does “establishment” refer to all of the employer’s establishments in which dismissals are effected or does it refer to each individual establishment?

In other words, if a business proposes to dismiss for redundancy 10 individuals at a site in Northumberland and another 10 individuals at a site in Cornwall are they added together to make 20 and thus trigger a collective redundancy or are they treated as two separate and distinct exercises?

Advocate General’s Opinion:

Ahead of the ECJ’s decision in these cases the Advocate General has given the opinion that the concept of establishment “denotes the unit to which the workers made redundant are assigned to carry out their duties, which it is for the national court to determine…” in which case it is not necessary to aggregate the dismissals across all of an employer’s establishments for the purposes of determining whether there is a collective redundancy. To therefore take the example set out above it may not be necessary to add 10 + 10 together and thus trigger a collective redundancy.

Employers do need to be aware that the Advocate General went on to add that the issue of what is a local employment unit is a question of fact which will need to be determined in each instance.

Implications for Businesses:

On the one hand the Advocate General’s opinion offers a glimmer of hope to employers that an establishment is the unit to which the redundant workers are assigned which means, in theory, there will be fewer collective redundancy situations. However before a definitive view can be taken it will be necessary to decide where there are multiple business premises whether those business units together constitute a single local employment unit – by way of illustration the Advocate General gave the example of several stores in one shopping centre potentially forming a single local employment unit.

This therefore still gives employers a degree of uncertainty. That uncertainty may be removed when the ECJ delivers its decision as, whilst it is often the case that the ECJ follows the Advocate General’s opinion, it is not obliged to do so. We will report this decision when it is delivered – we expect that to be later this year. Pending that decision the sensible approach for employers currently is the aggregation of potentially redundant employees across different locations when determining whether there is a collective redundancy situation.

Contact Details

If you are faced with a potential large-scale redundancy or business re-organisation and you have concerns about identification of an “establishment” for collective redundancies please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.