Legal update May 2019

Below are the key changes in law in the areas of Corporate and Commercial, Intellectual Property, IT, Employment Law, and Brexit, over the last month.

Corporate and Commercial

A disclosure letter accompanying a share purchase agreement could be altered if it did not give effect to what the parties intended — The Court of Appeal has held that a disclosure letter accompanying a share purchase agreement could be rectified because it did not give effect to the parties' intended transaction. The High Court accepted the claimant's argument that the parties' negotiations demonstrated a common intention that it would acquire the whole development site, including the Ransom Land even though the disclosure letter did not explicitly say so. Rectification of the share purchase agreement and disclosure letter was ordered so that the appellants gave an unqualified warranty that the acquired companies owned the Ransom Land. Although appealed, the court of appeal found that on the evidence, the judge had been entitled to conclude that the share purchase agreement and disclosure letter did not record the terms agreed between the parties, and so the requirements for rectification had been met. The disclosure letter was an integral part of the documents designed to give effect to the parties' intended transaction and, in circumstances where its terms failed to achieve this purpose, it was as much capable of rectification as the share purchase agreement.

Intellectual Property

ECJ considers that figurative signs could be included as part of a protected designation of origin for agricultural products and foodstuffs — At the beginning of this month the ECJ held that use of figurative signs which may make the consumer think of a product with a protected designation of origin (PDO), or the geographical area associated with a PDO, may be prevented. This was after signs, landscape and images typical of the La Mancha region, in particular referring to the fictional character Don Quixote were deemed to summon up thoughts of ‘queso manchego’ in the consumer’s mind and so it was ruled that no other producer from another area should be able to use those signs.

Information Technology

Direct dial telephone numbers and disclosure under the Freedom of Information Act — The First-tier Tribunal (Information Rights) dismissed an appeal against the Information Commissioner’s decision to allow the Department for Work and Pensions not to disclose direct dial telephone numbers of two senior staff members. The DWP was seeking to rely on the personal data exemption under the Freedom of Information Act. Direct dial numbers specific to individuals have previously been demonstrated to fall within the exemption and be classed as personal data. It was proven in this instance that the personal data requested was not required to pursue the requester’s legitimate interests, as the two individuals for which telephone numbers were requested did not generally respond to queries of the kind raised by the requester, there were other well-publicised ways to complain. Further, the requester in this case was able to resolve his complaint without the requested numbers and the expense and disruption providing them would have caused in this case.

Employment law

A dismissal can be discriminatory even if there is no knowledge of disability until an appeal hearing — The EAT held earlier this month that, where an employer did not know about an employee's disability (in the case considered this was depression) at the time of dismissal, but found out at the appeal hearing, the dismissal could still be discriminatory. The disability in this case may have caused some of the behaviour the employee was dismissed for and the Employment Tribunal was found not to have considered this. It was not a case of asking if there were other causes for dismissal, but whether the behaviours arising in consequence of the disability had a ‘material influence’ on the employer’s decision to dismiss. The Employment Tribunal also stated that in this case the employer was pursuing a legitimate aim but did not address whether dismissal was a proportionate means of achieving the legitimate aim.

Employers must set up systems to measure actual daily working hours of individual staff members — The ECJ has ruled this month that in order to comply with the EU Working Time Directive on maximum weekly working time and daily and weekly rest, employers must set up systems to measure actual daily working hours for each individual staff member.

Without such a system the ECJ said that it was not possible to determine, objectively and reliably, the number of hours and which hours are being worked or number of hours of overtime and could compromise the Directive's objective of protecting workers' health and safety. Our Working Time Regulations 1998 currently requires employers to keep ‘adequate records’ to show compliance with the 48-hour limit on the average week and the protections for night workers but does not currently require all daily hours of work to be measured and recorded, or daily or weekly rest periods to be recorded. This judgment means that employers may want to consider whether they are doing enough to record worker hours and may want to consider new systems at this stage. If you require assistance in considering your current record keeping obligations, please contact our specialist employment lawyers.

Unfair dismissal and improper manifestation of religion at work — It was held this month by the Court of Appeal that there was no unfair dismissal on the grounds of gross misconduct where an employee was warned by management not to commence religious conversations with patients and then chose to ignore those clear management instructions. The Court of Appeal found that the fairness of the dismissal was sound, and the employee’s right to manifest her religion under Article 9 of the European Convention of Human Rights were not breached, as the disciplinary process was properly followed and the employee ignored instructions by management and acted improperly in respect of her religious beliefs by conducting unwanted religious conversations with patients. It was this improper manifestation of her religious beliefs that led to her fair dismissal.

Brexit

Jeremy Corbyn wrote to the Prime Minister on 17 May 2019 saying that cross-party Brexit talks had ‘gone as far as they can’. The Brexit Withdrawal Agreement Bill is to have its Second Reading during the week commencing 3 June 2019. Early indications are that MPs are likely to vote against the Bill. Theresa May has said she will set out a timetable for her departure once MPs have voted on the Bill, which is likely to be sooner rather than later if the majority of MPs vote against the Bill.

*Please note that this update does not constitute formal legal advice and should not be relied upon as such. Always ask a solicitor if you are unsure of how the law relates to your business*