public matters march 2016
TRANSCRIPT
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Index
Page
Increasing SME participation in procurements
Angelica Hymers 2 – 3
Local authorities power on fracking to be limited?
Emma Braidwood 4 – 6
PCER, DPA and satisfaction surveys
Megan Larrinaga 7 – 9
FOI review: the increasing burden
Emma Graham 10 – 14
Putting a stop to public procurement boycotts
Tom Nanson 15 – 16
Potential employment law implications of a ‘Brexit’
Sarah Hooton 17 – 19
The Environment (Wales) Act 2016
Ben Standing 20 - 24
The articles in this newsletter are for general information only. They do not represent legal advice. You should always take legal advice before pursuing any course of action discussed in this newsletter. If you would like to discuss any of this issues raised in this newsletter please call us +44 (0)115 976 6000.
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One of the aims of the European Commission in implementing Directive 2014/24 (the 2014 Directive) (the
European legislation which sets the basis of procurement law for the whole of the EU and which the PCR 2015
implements into English and Welsh Law) was to make it easier for SMEs to participate in public procurement
procedures. The majority of the provisions in the Public Contracts Regulations 2015 have been in force for
over a year now and so it might be time for a reminder on how procurements can be made more accessible to
small and medium-sized enterprises (SMEs).
1. Previously, it had been acceptable for contracting authorities to require high annual turnover figures
in comparison to the value of the contract. Clearly for contracting authorities this approach has the
benefit of ensuring that the contract for which the supplier is tendering will not form the majority of
its work, which can give comfort about the financial stability of the organisation. However, this is a
barrier to entry to SMEs who might be equally capable of performing the contract but unable to
demonstrate that they can meet the turnover requirements.
The PCR 2015 at Regulation 58(9) now provides that contracting authorities may only impose a
minimum annual turnover threshold of not more than twice the estimated contract value, except in
cases where this can be justified. Examples of justifications given in the PCR 2015 include where
special risks attach to the nature of the works services or supplies which the contract covers. It
should be noted that where a higher turnover requirement is imposed, the reason for adopting the
threshold should be set out in the procurement documents, or in the report that contracting
authorities are required to produce for each procurement they run under Regulation 84.
2. Contracting authorities are now encouraged to divide contracts into lots to allow the participation of
SMEs. Where a contract is not divided into lots, the contracting authority must include the reasons
for the decision in the procurement documents or in the Regulation 84 report. It is worth noting that
artificial or inappropriate subdivision of contracts into lots to try and avoid application of the full
rigour of the PCR 2015 by keeping the value of individual contracts under the relevant thresholds is
not appropriate and provision is made at Regulation 6(11) which provides that where contracts are
awarded as separate lots, for the purposes of calculating the value of the contracts the value of all of
the lots should be aggregated.
3. The European Single Procurement Document (ESPD) is now available for use. It is a self-declaration
form intended to allow suppliers to self-certify that they meet the exclusion and selection criteria for
procurements (for example, the conditions with respect to meeting the threshold requirements,
having paid taxes etc). The idea is that the contracting authority is now only obliged to request
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evidence of these matters from the winning bidder in a procurement, thus cutting down on
administrative tasks for both parties.
On 18 April 2017 it will become mandatory for contracting authorities to accept the ESPD in electronic form
(and indeed, it will be compulsory for suppliers to provide it electronically). Until then it can be accepted in
hard copy. The European Commission has developed an online service to allow suppliers to generate
electronic ESPDs which can be accessed here.
Further information on the participation of SMEs in procurement exercises please see here.
Angelica Hymers | +44 (0)115 976 6092 | [email protected]
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Leaked government plans detail proposals for local councils to lose their power to determine planning
applications for shale gas wells.
What is the current process for dealing with planning applications for fracking?
Fracking (hydraulic fracturing) is a method used to extract gas and oil from shale rock by injecting water at
high pressure. The government is supporting the use of fracking as a method to provide energy for the UK.
Planning applications
Each stage of hydrocarbon extraction (exploratory, appraisal and production) requires planning permission,
although one application can cover more than one stage. Planning permission is a key regulatory requirement
that must be met by operators prior to drilling a well. The main regulators for hydrocarbon extraction are:
Department of Energy and Climate Change
Mineral Planning Authorities
Environment Agency
Health and Safety Executive.
When determining the planning application, mineral planning authorities (the County Council or Unitary
Authority in England, or the County or County Borough Council in Wales) must consider the government’s
energy policy, which provides that energy should be supplied from a range of sources, including onshore oil
and gas. The mineral planning authority will determine if the application is acceptable at a specific site
following public consultation with the local community and interested parties. If the planning application is
refused by the local authority then it may be appealed to the Secretary of State, who will then appoint a
planning inspector to determine it. Current applications are very controversial and few fracking applications
have been granted permission.
Nationally significant infrastructure
A letter to George Osborne dated 7 July 2015 signed by three Cabinet ministers (Amber Rudd, Secretary of
State for Energy and Climate Change; Greg Clark, Secretary of State for Communities & Local Government;
and Liz Truss, Secretary of State for Environment, Food and Rural Affairs) on fracking has recently been
leaked to Friends of the Earth. This letter details the government’s proposal to develop a maturing shale gas
industry within 10 years.
Under the proposal detailed in the letter of 7 July 2015, fracking wells would be classified as ‘nationally
significant infrastructure’ and be considered pursuant to the Planning Act 2008. This means that councils
would no longer have the ability to determine planning applications for fracking wells in their local
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communities. The Planning Inspectorate, who is responsible for dealing with planning applications of national
importance and is unelected, would have the power to determine planning applications for proposed fracking
sites. This goes further than the government’s introduction of powers last year for ministers to deal with
fracking decisions if councils were taking too long to make them. The rationale behind this latest proposal is
that the large number of applications which are expected when the industry is at a full production stage
could be best handled if they were dealt with as part of the nationally significant infrastructure planning
regime. Other projects which form part of this regime are the Thames Tideway Tunnel, the East Midlands
Gateway Rail Freight Interchange and the Hinkley Point C New Nuclear Power Station. Although energy
projects can be classed as nationally significant infrastructure, it is arguable that fracking does not fall into
this regime. In comparison to the more established schemes listed above, the fracking industry is in its very
early stages of development, raising doubts as to whether it can be considered to be nationally significant
infrastructure. The letter does state that the government needs “to think carefully about whether to slow
this approach until a number of exploration sites are underway in order to avoid delaying current and
prospective exploration applications or undermining public support for exploration sites”, creating
uncertainty as to how and if this proposal will be implemented.
Advantages
The proposal outlined in the letter does have a number of advantages for local authorities and for fracking
companies. Local authorities may be able to make savings of both time and money, as they will no longer
need to process and decide on fracking applications. This is particularly relevant considering the ongoing
pressure on local authorities’ budgets and the large potential cost of dealing with fracking applications
(although this would be mitigated to some extent by the planning fee which would be charged to the fracking
company).
Some local councillors may also welcome the fact that the decision relating to such a politically charged issue
is being taken out of their control.
For fracking companies it may mean that decision times are reduced in the medium to long term. This is
because it is likely that the relevant inspectors will become experienced in dealing with these applications
and so will be quicker in dealing with them than local authorities, who may not regularly receive
applications. In addition the entire procedure is shorter as there is no right of appeal.
Disadvantages
The letter also raises a number of concerns for local authorities. It is of concern that local representatives,
who are aware of local issues and who are best placed to know the issues which would be caused by fracking,
are having their role reduced in the process. This is likely to reduce the ability of local authorities to limit
the impact of fracking on the local environment due to the fact that they will not be able to determine the
most appropriate mitigation measures.
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Fracking companies will also lose the right of appeal and accordingly this may reduce the likelihood of having
applications approved.
Conclusion
It remains unclear whether the government will adopt the proposals raised in the letter. The Commons’
Energy and Climate Change Committee have warned they may investigate the plan, signalling conflict within
government on the best way forward.
What is apparent, however, is the government’s aim to develop the fracking industry at the national level
and that they consider local authorities’ involvement in determining applications to be a potential barrier to
this development. Ultimately whether or not local authorities determine fracking applications may have little
long term effect, as planning inspectors will be dealing with the applications if they are refused by local
authorities. However it remains to be seen how the views of local councils and communities will be
considered by the Planning Inspectorate, particularly given the national approach the government is taking on
this issue. There is a perception that the government will be looking for ways to approve fracking
applications and will be putting a lot of pressure on inspectors to approve them. However until more
applications are considered by the Planning Inspectorate it is difficult to determine how they will approach
fracking applications. We will continue to review developments in this area as the debate continues.
Emma Braidwood | +44 (0)115 976 6232 | [email protected]
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The Privacy and Electronic Communications Regulations 2003 (PECR) does exactly what it says on the tin. It
provides individuals with specific privacy rights in relation to electronic communications such as marketing
calls, email and text messages. It sits alongside (but does not replace) the provisions of the Data Protection
Act 1998 (DPA). In fact, Regulation 4 of PECR provides that nothing in the regulations shall relieve an
individual of his obligations under the DPA.
Background
Recently a client contacted us as they were concerned they were in breach of the DPA and PECR. The client,
a public authority, had a relationship with a marketing company. In a bid to improve services, when an
individual used a particular service of the public authority, the public authority would provide the name and
telephone number of the individual to the marketing company. The marketing company would then send a
text message to the individual asking about the service they had received. The public authority did not seek
the consent of the individual to provide their details to the marketing company but in all other respects the
provision of the individual’s contact details was lawful.
The public authority became aware of the £200,000 fine imposed by the Information Commissioner on a solar
company for making nuisance calls and became concerned they were in breach of PECR and/or the DPA and
approached us for advice on whether they were compliant with PECR and/or the DPA, and if not, how they
could become compliant.
The relevant law
PECR
Of particular relevance to the authority’s query was regulation 22 of PECR which, in short, provides that a
person shall not transmit nor instigate the transmission of unsolicited communications for the purposes of
direct marketing by electronic mail unless the recipient consents to such communication being sent by the
sender. For the purposes of PECR electronic mail includes text, voice and sound images sent over a public
electronic network. There is an important caveat which provides that electronic mail for the purposes of
direct marketing can be sent where the contact details have been obtained in the course of sale or
negotiations for the sale of a product or a service to the recipient.
Regulation 22 only applies to direct marketing. Direct marketing is defined by PECR as communication (by
whatever means) of any advertising or marketing material which is directed to particular individuals.
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DPA
The DPA grants individuals rights as to how their data is processed and sets out a number of principles which
must be complied with when processing an individual’s personal data. This includes that any processing must
be fair and lawful and must meet at least one of the specified conditions on Schedule 2 of the DPA and in the
case of sensitive personal data one of the conditions in Schedule 3.
Advice
While the text messages were directed to particular individuals, i.e. users of the service, it was neither
advertising nor the marketing of particular goods or services. As such PECR did not apply. The Information
Commissioner has endorsed this approach as he has produced guidance on direct marketing which provides
that where an organisation contacts customers (or asks someone to do so on their behalf) to conduct genuine
market research this is not communication of advertising or marketing material.
What about the DPA?
Although PECR did not apply, the authority still had to consider the DPA. Was providing the names of the
individuals without their consent breaching the principles or provisions of the DPA? The individual’s name and
telephone did not constitute sensitive personal data and as such explicit consent was not required for contact
to be provided to the marketing company. Consent can however be implied. In order for implied consent to
be legally effective it must be freely given, specific, informed and include a positive expression of choice.
Consent impliedly given should also be easily withdrawn. There was nothing the public authority could rely on
to indicate that consent had been impliedly given. There were no notices either on its website or in its public
areas that personal data would be forwarded to the marketing company.
In the absence of express consent and given the difficulty in establishing that consent could be implied, the
public authority was required to rely on Condition 6 of Schedule 2 which provides that personal data can be
processed if the processing is “necessary” for the purposes of legitimate interests being pursued by a data
controller. Seeking improvement in public services is arguably a legitimate interest and obtaining the
responses to a survey is one way that such improvement could be sought. However, in the event of a
complaint, the authority might struggle to justify that the marketing company was the most appropriate
method of improving their service.
The solution
Posters and leaflets in prominent areas of relevant buildings, information on forms completed by individuals
and a message on their website would likely be sufficient in ensuring implied consent and would ensure the
authority would meet the fairness criteria for processing personal data. However, the authority needed to
ensure that it was easy for an individual to opt out of receiving messages in order to meet the requirement
that consent can be easily withdrawn.
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The lesson
Neither PECR nor the DPA prevents an authority from providing third party companies with service user data
in a bid to improve services. If express consent is not sought or provided, consent could be implied through a
variety of mediums. Whatever the medium, it should be easy for the service user to opt out of receive service
improvement messages.
The future
The General Data Protection Regulation1 will prohibit a public authority from processing personal data in the
pursuit of legitimate interests, so in the next two years public authorities will need to consider ever more
creative ways of improving their services.
Megan Larrinaga | +44 (0)20 7871 8504 | [email protected]
1 Regulations which will update the data protection regulations, the basis for the DPA.
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In July 2015, almost 15 years after the Freedom of Information Act 2000 (the Act) started to come into force,
an Independent Commission on Freedom of Information (the Commission) was appointed to review how the
Act is operating and to establish mechanisms for how it can be improved2. The Commission published its final
report, which has been eagerly anticipated by the public sector and media alike, on 1 March 2016.
The recommendations contained in this report could have far-reaching consequences as the Act applies to
over 100,000 public bodies across England, Wales and Northern Ireland3. The Act has evolved significantly
since its implementation and now applies to academy schools4, Universities and Colleges Admissions Service5
and the Financial Ombudsman6. With the rise of commercial innovation in the public sector, it is also worth
noting that the Act now applies to companies wholly owned by the public sector7 whereas previously it was
only applicable those wholly owned by a single public authority.
Recommendations
The Commission made 21 recommendations in their report of 1 March, but for the purposes of this article, I
shall cover those which I think will have the greatest impact on public bodies, and local authorities in
particular.
Time limit extension
Currently under the Act a public authority has 20 working days from receipt of any request in which to
respond8. This time limit can, however, be extended where the authority seeks to apply a qualified
exemption and needs to consider the public interest. There is no fixed time limit for any such extension, only
that the response is to be provided within a reasonable period of time.
The Commission’s view is that the ability to extend the time limit in this way is unnecessary and “simply
creates additional uncertainty and bureaucracy around the operation of the Act both for requestors and
public authorities”9. They are therefore recommending that the ‘reasonable period of time’ extension on the
ground of considering the public interest is removed and replaced by a time extension mechanism which can
only be applied where the authority reasonably believes that the request is complex, or the volume of
information is so great that the time limit will not be able to be met. The Commission goes on to recommend
that any such extension should be limited to 20 working days.
2 Written statement of The Rt Hon Matt Hancock MP of 1st March 2016 3 Independent Commission on Freedom of Information Report March 2016, page 8. 4 Academies Act 2010, Schedule 2 paragraph 10. 5 Freedom of Information (Designation as Public Authorities) Order 2011/2598, article 2. 6 Ibid. 7 Protection of Freedoms Act 2012. 8 Freedom of Information Act 2000, s10. 9 Independent Commission on Freedom of Information Report March 2016, page 13.
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Should this recommendation be implemented, this would mean that a more proactive approach to FOI would
be required by officers (and by officers I mean those requested to provide information for the response) as
reliance on the ability to extend for an undefined period of time will no longer be possible. This may also
mean FOI officers will need to be firmer with colleagues when requesting information.
Sanctions
If information is altered, defaced, blocked, erased, destroyed or concealed after a request has been made
then those responsible are liable on summary conviction under section 77 of the Act. This offence can be
committed both by an authority and by an individual employed by the authority and is punishable by way of
an unlimited fine. The frustration for the Information Commissioner (IC) is that prosecution for a summary
offence must be brought within six months of the offence being committed. In most cases the six months has
elapsed by the time the public authority has determined the request, the complaint had been made to the IC
and it has been investigated. The Commission has therefore been recommended that the offence is changed
to an offence which could be tried in either the Magistrates’ or Crown Court meaning there would be no time
limit for bringing a prosecution. The report does say that this change would “allow for a custodial sentence
for particularly serious acts of destruction”10 however making this an either-way offence would not have
this effect; the penalty would need to be amended to impose a custodial sentence if that is a desired
outcome in reviewing section 77.
Although an unlimited fine can cause serious damage to an authority’s or individual’s purse, the knowledge
that the activities described above could be punishable by a prison sentence, should the government be
minded to legislate for this, and the possibility of an individual’s actions being discovered and finding
themselves being prosecuted sometime after the event may help to ensure that this type of activity does not
take place and information is not concealed from requestors.
Publication obligation to demonstrate compliance
Many public authorities already make their Freedom of Information (FOI) data available on their respective
websites however the Commission has recommended that these statistics should be coordinated by a central
body. This has been attempted before through submission of a general pro forma to the collating body but is
no longer current practice. It is not clear whether there were issues encountered on the previous attempt
and if so whether these have been considered when making this recommendation.
The more burdensome recommendation which has been made regarding publication, particularly for smaller
authorities, is to require public authorities to publish all requests and responses where information is
provided to a requestor (via a disclosure log). This may require further financial investment in FOI software
10 ibid, page 16.
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by smaller authorities to enable the maintenance of such a log. At present the maintenance of a disclosure
log is simply encouraged by the IC but not a requirement.
No fee to be charged to requestors
The report does not shy from the fact that many public authorities feel FOI requests are “unduly
burdensome”11. One of the main gripes for authorities is those requests which appear to have a commercial
motive, as this was not an intended use of the Act; other issues raised are recurring vexatious requestors and
generic ‘blanket’ requests.
Suggestions were put forward by public authorities as to how the burden of FOI requests may be reduced:
a) impose a fee for making a request
b) lowering the cost limit for refusing a request. This is currently set at £600 for central government
departments and £450 for other public authorities. This is equivalent to staff hours of 24 hours and 18
hours respectively at a staff rate of £25 per hour
c) expanding the range of activities counted in assessing whether a request exceeds the cost limit.
Currently activities which are not taken into account when deciding if the cost limit has been
reached are: reviewing the information, considering exemptions and making redactions
d) require justification by the requestor as to why it is in the public interest for the information to be
disclosed.
The Commission made it clear that they do recognise that the obligations under the Act impose a financial
burden on public authorities but they are of the opinion that this is justified by the general public interest in
the “accountability and transparency of public bodies”12. They also commented that the use of the Act by
the media has enabled important investigations (which are of public interest) to be undertaken and imposing
fees may restrict their access to the information and impede important investigations in the future.
It’s worth noting here that the Commission has made a recommendation for the revised Code of Practice (see
below) to include a section on vexatious requestors and encourage authorities to refuse requests relying on
section 14 of the Act where appropriate.
Form of the information
In a relatively recent decision in the Court of Appeal13, it was held that public authorities are obliged to
provide information in a particular format if this was specified in the request (for example as a spreadsheet),
so long as the information was already held in such a format or could be readily converted. The Commission
has made a recommendation that section 11 of the Act (which deals with the form of information being
11 Independent Commission on Freedom of Information Report March 2016, page 44. 12 ibid, page 46. 13 Innes v Information Commissioner & Buckinghamshire County Council [2014] EWCA Civ 1086.
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provided) is clarified to enable a requestor to request information (or a summary of the information) in hard
copy, electronic form or orally.
Code of practice
The current code of practice for FOI was produced in 2004 and has never been updated14. Unsurprisingly the
Commission has recommended the Code is reviewed and updated accordingly to account for the development
of the FOI regime over the past decade. The Commission recommends this is in tandem with a review of
section 45 of the Act which dictates what matters any published guidance can cover.
Although the IC does issue guidance, a revised code of practice would be welcomed by many public
authorities.
The future
The recommendations discussed above are only part of the full recommendations which have been made by
the Commission however it appears that the potential outcome of this Commission’s report would favour the
requestor and, therefore, rather than alleviate the burden upon public bodies, is likely to result in an even
more burdensome regime.
It should be noted that these are only recommendations and it is not clear at this stage how quickly any
changes would be implemented, however there appears to be a move towards tightening the law and making
the process for requesting information quicker, and the sanctions more serious. The consequences for public
bodies could result in FOI becoming an even bigger part of their day-to-day workload and more work for
information officers who may be required to log and publish more data than ever before. There is also the
possibility of a more stringent time period within which to reply to FOI requests, resulting in a greater strain
on staffing and resources.
These recommendations will not prevent the vexatious, the round robin or the media requestors and so
public authorities may argue that the main issues which were highlighted in the call for evidence have not
wholly been addressed. There is, however, the hope of some updated and more detailed guidance in the code
of practice which should be welcomed and may assist in dealing with issues such as vexatious requestors,
even if they cannot be stopped altogether.
A final point worth making is that the Commission also discusses in its report the possibility of extending the
application of the Act to private companies who provide public services under contract. As mentioned at the
beginning of this article, the Act now applies to companies wholly owned by the public sector: outsourcing is
not a new concept but as public authorities start to explore different ways of generating savings through
commercialisation there is likely to be a louder call for private companies providing public services to comply
14 Independent Commission on Freedom of Information Report March 2016, page 48.
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with the Act. At present they are often contractually obliged to assist the contracting authority with any
relevant FOI requests but are not bound by the legislation themselves.
The Commission said they are “persuaded that there is a need for greater transparency in outsourced public
services”15 however they have concerns that this may dissuade companies, and in particular smaller
companies, from bidding for work. Although the Commission did not feel they could make a recommendation
as they did not explicitly seek views on this question, they did conclude that it would be “burdensome and
unnecessary”16 but that information being held by contractors in relation to the delivery of public services
should be “treated as being held on behalf of the contracting public authority”17. We may see developments
on this issue in the future.
Emma Graham, North West Leicestershire District Council
01530 454703 | [email protected]
15 ibid, page 52. 16 Ibid. 17 Ibid.
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The Crown Commercial Service issued a Procurement Policy Note (PPN) on 17 February 2016 informing
publicly funded institutions that boycotts in public procurement are inappropriate other than in situations
where formal legal sanctions, embargoes and restrictions have been put in place by the UK government. The
PPN was delivered along with statements claiming that town hall boycotts undermine good community
relations, poison and polarise debate and weaken integration at home and abroad it can impact negatively on
Britain’s export trade, harm international relations and threaten international security. Further to this, the
boycotts are accused of fuelling anti-Semitism. This incendiary language sparked a strong reaction from the
media leading to claims that new rules are banning public bodies from boycotting suppliers on ethical
grounds.
With the current focus on devolution and moving towards more decision making power for local government
this PPN seems to be a step in the opposite direction, commanding public bodies to toe the line etched out
by the government.
This is certainly nothing new in relation to procurement. In the eighties a group of local councils joined in a
boycott of the oil company Shell UK Ltd due to their group companies’ involvement in apartheid South Africa.
In R v Lewisham London Borough Council, ex parte Shell UK Ltd [1988] 1 All ER 938 the council defended its
boycott by arguing that the boycott actually promoted good race relations in the UK and was required to
satisfy its duty under the Race Relations Act 1976. It was held that it was reasonable for the council to
boycott a particular company because of its links to apartheid South Africa to satisfy its duty imposed by the
1976 Act, however it was held that in this instance the purpose of the decision to boycott was significantly
influenced by the intention to pressure Shell to sever ties with South Africa entirely and therefore was
unlawful for being influenced by an extraneous and impermissible purpose. The lesson was that the purpose
of the boycott was the determining factor.
The PPN itself does not refer to any new rules and Cabinet Office Minister Matt Hancock refers to it carefully
as ‘new guidance’ on procurement. In reality it is merely a reminder of existing obligations under the Public
Contract Regulations (PCR) 2015 and the World Trade Organisation Procurement Agreement. These
regulations do not allow boycotting of suppliers based on country of origin but they do allow for exclusions
for a number of other reasons such as fraud, theft, modern slavery or failure to comply with certain
environmental, social and labour law obligations.
The legal position remains unchanged from before the PPN was issued. All public procurement must be run in
an open and transparent manner in compliance with the applicable procurement legislation. A boycott will
not automatically be unlawful but the purpose of, and reason behind, the boycott is the determining factor.
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So if there has been no change to the rules then why was the note issued and what does it mean for those
involved in public procurement? While the note itself reads as a blanket warning to publicly funded
institutions engaging in boycotts, the guidance preamble on the gov.uk website puts a particular focus on
Israel.
The PPN could be a sign of regulation to come, a warning shot across the bow of public bodies engaging in
boycotts of suppliers for political reasons unconnected with the direct business of local government and a
statement of intent for further regulation. It could also be political posturing, allowing the government to
appear to be taking a harder line on boycotts without making any real change. Certainly the media fanfare
gave the impression of sweeping and aggressive changes rather than the reality which was a carefully phrased
and strongly worded reminder of existing regulations.
Tom Nanson | +44 (0)115 948 5604 | [email protected]
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The date for the referendum on whether Britain should remain in the European Union has been scheduled to
be held on 23 June 2016. If a ‘Brexit’ happens, what would the likely implications be for UK employment law?
An overnight change?
If there is a vote for an exit, this does not mean that the UK would leave the European Union immediately. It
is likely to be at least two years before the exit actually occurs, during which negotiations will take place as
to the terms of such an exit. Following this, although in theory the UK government could repeal all EU law,
this is highly unlikely to happen. Many of the rights set out in EU law are rights that the government (and
most employers and employees) would wish to retain. For example, although EU law sets out rights in respect
of discrimination and, in theory, the Equality Act 2010 (which sets out provisions to prevent discrimination
within the UK) could be repealed, such a move would be controversial: it is hard to envisage arguments now
being put forward that it is acceptable to discriminate on the grounds of any of the existing protected
characteristics (race, sex, age etc.).
Further, there would still be a need for a relationship with the EU and any trade agreements are likely to set
out the minimum levels of protection required regarding employment law. If there is an exit, the nature of
any trade agreement is likely to set the tone for what, if any, changes can be made. For example, if the UK
seeks a similar model to Norway, it is likely to have to agree to most aspects of EU social and employment
policy.
A recent government document18 has suggested that there could be “up to a decade or more of uncertainty”
dealing with an exit, future arrangements with the EU and trade deals with countries outside the EU.
What employment changes could be considered?
Some employments rights within the UK are purely domestic rights and would not be affected by EU
membership, for example unfair dismissal rights. Others actually go beyond what EU law requires, for
example family friendly leave rights. Some will have been incorporated within employees’ contracts and
many more will form part and parcel of a collection of employment rights that employees now expect and
employers accept should govern how the employment relationship works. There is likely to be a lack or
appetite for, and/or a significant resistance to, any changes to such rights.
What seems more likely in the current climate is a scaling back of some of the protections offered. For example:
18 The process for withdrawing from the European Union – February 2016.
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Discrimination laws
There have been some suggestions that a cap could be imposed in discrimination cases to bring them into line
with unfair dismissal cases. This is a proposal that has been made by the CBI for some time. The CBI argues
that the absence of a cap, and the publicity given to high discrimination awards, leads to individuals having
unrealistic expectations as to appropriate settlement levels. Any such cap would be highly unlikely to be
lower than the current unfair dismissal cap.
Other changes could include legislation in respect of injury to feelings awards, which would set greater
guidance for which level should apply or, theoretically abolishing such awards all together. Changes could be
made to how conflicts should be dealt with between different protected characteristics (for example
between religious beliefs and sexual orientation). Positive discrimination could also be permitted in respect
of under-represented groups, for example to assist in creating more balanced boardrooms.
TUPE
Although TUPE is seen by many as being unduly complicated, its protection of employment principles can be
useful for organisations. If there was a complete repeal, there would be considerable commercial issues for
existing outsourcing agreements which have been drafted (and priced) on the assumption of TUPE applying on
the termination of those agreements.
It is highly unlikely that TUPE would be repealed in its entirety but this does not mean that further changes
would not be made to it. For example, amendments could be made to allow it to be easier to harmonise
terms and conditions of employment following a transfer. Such an amendment could have significant
implications within the public sector where services are outsourced to the private sector, leading to a move
away from centrally agreed terms and conditions.
This type of amendment which, on the face of it, appears to simplify matters, may still lead to confusion and
uncertainty. For example, such changes could lead to conflicts between any new statutory provisions and
existing UK case law on the principal purpose of the TUPE legislation.
Holiday and working time
Still a topical issue, the European influence on holiday pay is seen by many as unwelcome. As the removal of
the right to a minimum level of statutory holiday would lead to considerable resistance from employees and
unions alike, it is unlikely that the Working Time Regulations 1998 would be repealed in full. However,
amendments could be made to revert to the previous position of basic pay being the appropriate
methodology of calculating holiday pay for those with normal working hours. Restrictions could also be
imposed to move away from the European cases allowing for holiday to be accrued during sick leave and
carried forward.
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Agency workers
The Agency Workers Regulations 2010 have been unpopular with businesses and are seen as being complex to
comply with in practice. The rights granted have not yet become as entrenched as some other employment
rights and therefore the resistance to their removal in full is unlikely to be as high as for some of the more
established employment rights.
Collective consultation
Changes have already been made to reduce the periods of time during which consultation should take place
and these could be reduced further. At this stage, it is unclear how much resistance there would be to such a
proposal from the unions, or how much of a demand there would be from employers for such a move.
What about the European Court of Justice?
If the UK does leave the EU, the ECJ would no longer have jurisdiction over the UK courts and any future
decisions made by it would not be binding. However, the existing bank of UK case law which considers and
applies ECJ decisions would still apply and would bind lower courts and tribunals, subject to their ability to
distinguish decisions on the particular facts of the case. Courts and tribunals may also see future ECJ
decisions as persuasive, leading to a continuing alignment in how cases are dealt with.
In the event of a ‘Brexit’, there is likely to be some considerable time before the full employment
implications of such an exit are known or felt.
Sarah Hooton | +44 (0)115 976 6033 | [email protected]
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On 2 February 2016 the Environment (Wales) Bill was approved by the National Assembly for Wales. Barring
any legal challenge it will receive Royal Assent in spring 2016 and then become an Act of the Assembly (the
Act).
The Act is stated to have a number of purposes, including the promotion of the sustainable management of
natural resources. The majority of the provisions of the Act apply to the Natural Resources Body for Wales
and the Welsh Ministers. However Section 6 places a specific duty on public authorities to ‘seek to maintain
and enhance biodiversity in the exercise of their functions in relation to Wales’.
This article will consider the requirements of Section 6 of the Act in the context of existing biodiversity
obligations and the effect in practice that this is likely to have on a Welsh local authority.
The biodiversity duty
Biodiversity is defined in the Act as meaning the diversity of living organisms, whether at the genetic, species
or ecosystem level.
Section 6 of the Act contains the Biodiversity Duty. Section 6(1) of the Act states that:
(1) A public authority must seek to maintain and enhance biodiversity in the exercise of functions in
relation to Wales, and in so doing promote the resilience of ecosystems, so far as consistent with the
proper exercise of those functions
Section 6(2) of the Act states that:
(2) In complying with subsection (1), a public authority must take account of the resilience of
ecosystems, in particular the following aspects –
(a) diversity between and within ecosystems
(b) the connections between and within ecosystems
(c) the scale of ecosystems
(d) the condition of ecosystems (including their structure and functioning)
(e) the adaptability of ecosystems.
Accordingly once the Act is in force local authorities in Wales will be under a duty to enhance biodiversity
when exercising their functions, so far as is consistent with the proper exercise of their functions. Whilst
local authorities have been required to have regard to the conservation of biodiversity for a number of years
(see below), the Act places a positive duty on local authorities to enhance biodiversity. It also for the first
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time places a specific requirement on local authorities in Wales to consider certain characteristics of
ecosystems, such as their scale and connections between them.
Current biodiversity duties of local authorities
Local authorities have for a number of years had responsibilities in relation to biodiversity. For example:
Section 40(1) of the Natural Environment and Rural Communities Act 2006 (NERC) states that every
public authority must, in exercising its functions, have regard, so far as is consistent with the proper
exercise of those functions, to the purpose of conserving biodiversity
Regulation 9 of the Conservation of Habitats and Species Regulations 2010 sets out that local
authorities must have regard to the Habitats and Birds Directives so far as they may be affected by
the exercise of the local authority’s functions
Section 28G of the Wildlife and Countryside Act 1981 requires local authorities to consider the effect
on the flora, fauna or geological or physiographical features of a Site of Special Scientific Interest
local authorities are also encouraged through planning guidance to enhance as well as conserve
biodiversity (for example see the Welsh Government’s technical advice note 5 on nature conservation
and planning).
However the Biodiversity Duty is significant because it is a positive duty to enhance biodiversity outside of
the planning regime which potentially applies to all of the functions of a local authority.
The Well-being of Future Generations (Wales) Act 2015
The Well-being of Future Generations (Wales) Act 2015 (the Well-being Act) states that local authorities in
Wales need to carry out sustainable development. This will include setting and publishing objectives that are
designed to maximise their contribution to achieving each of the well-being goals. Local authorities are
responsible for taking all reasonable steps in exercising their functions to meet their objectives.
The well-being goals include enhancing a bio diverse natural environment with healthy functioning
ecosystems that support social, economic and ecological resilience and the capacity to adapt to change.
The Well-being Act is due to come into force in April 2016. Due to the complementary nature of the Well-
being Act and the Biodiversity Duty, it is likely that the Biodiversity Duty and Well-being Act will come into
force at approximately the same time.
The practical effects for local authorities
As discussed above, conserving biodiversity is something which local authorities in Wales are experienced in
having regard to when exercising their functions. In particular they have had a duty to have regard to
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sustainable development, and accordingly consider conserving and enhancing biodiversity, in relation to
planning applications. However the Welsh Government believes that whilst there has been some success as a
result of the current duties, these successes have not been sufficiently widespread.
The Biodiversity Duty is more prescriptive than previous obligations in that it requires local authorities when
exercising functions to demonstrate that they have considered the resilience of ecosystems, including:
a) diversity between and within ecosystems
b) the connections between and within ecosystems
c) the scale of ecosystems
d) the condition of ecosystems (including their structure and functioning)
e) the adaptability of ecosystems.
Obtaining information
In order to comply with the Biodiversity Duty local authorities should consider how they are going to obtain
the necessary information. Local authorities may have existing mechanisms in place for obtaining biodiversity
information in order for them to comply with their existing duties. However the more prescriptive nature of
the Biodiversity Duty means that additional information is likely to be required.
In relation to the determination of planning applications local authorities may wish to request this additional
information from the applicant. Thought will need to be given to how much information is appropriate for
different applications. For example it is likely that more detailed analysis is required in order to discharge
the Biodiversity Duty for larger developments or in developments near or in more environmentally sensitive
areas. Local authorities should consider how they are going to communicate their requirements for additional
ecological information to applicants. For example are relevant policies going to be amended?
Local authorities will need to be able to review any information obtained from the applicant with the
assistance of ecological advice. They will also need their own ecological advice when exercising other, non-
planning, functions.
Whilst the larger authorities may employ an ecologist, it is likely that the majority of local authorities will
need to buy in services. Accordingly local authorities may wish to explore possibilities on the most cost
effective way of managing an increased need for advice from ecologists. This may include working with other
local authorities to share access to an ecologist, or arranging a competitive tender for services.
Action needed to comply with the Biodiversity Duty
Commentary on the Biodiversity Duty from the Welsh Government suggests that local authorities could
consider:
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letting grass grow longer at certain times of the year and in certain places, before cutting it, to
provide a more varied structure, encourage wild flowers and enhance wildlife habitats
allowing some weedy areas to provide food for birds and animals
provision of nesting sites and bat boxes
using native tree and plant species.
These kinds of measures could be contained within planning permission, or included by local authority
departments responsible for parks and open spaces. However there is greater uncertainty as to the action
required in relation to the exercise of other functions. For example how do you seek to maintain and enhance
biodiversity in relation to the provision of social care or the collection of household waste?
The Biodiversity Duty is clarified by the words ‘so far as is consistent with the proper exercise of those
functions’. It may therefore be arguable that the Biodiversity Duty does not require action to maintain or
enhance biodiversity to be taken in relation to the exercise of a number of local authority functions, but a
local authority would need to show evidence that is has considered whether this is the case
Local authorities should consider how they have complied with their current biodiversity duties, in particular
under NERC. The wording in NERC is similar to the Biodiversity Duty and should assist in its implementation.
However the Assembly clearly intends the Biodiversity Duty to have a wider impact than NERC. Therefore
until guidance is published, or the courts consider the implementation of the Biodiversity Duty there remains
uncertainty on what local authorities are required to do to comply with the Biodiversity Duty. It is likely that
the Welsh Government will publish guidance on how they expect the Biodiversity Duty to be implemented.
This should hopefully help to provide clarity on the responsibilities of local authorities.
Even if it is determined that actions to maintain or enhance biodiversity are not required as they are not
consistent with the proper exercise of the functions of local authorities, local authorities will still need to
demonstrate that they have considered the specific aspects set out in section 6(2) of the Act. This will
require input from an ecologist. It is important that the views of the local authority in relation to each of the
aspects is recorded to assist in the event of challenge.
Local authorities should consider whether any of their policies need updating to refer to the Biodiversity
Duty. Additional training may also need to be given to officers.
Use of the Biodiversity Duty as a basis for challenge
It is likely that the Biodiversity Duty will primarily make itself felt in relation to planning matters. However
the scope of the duty has deliberately been made wide and it may be used by those who are unhappy with
decisions of a local authority to challenge decisions in areas other than planning. For example, if a person is
dissatisfied with a decision a local authority has made in relation to the closure of social care facilities they
may seek to demonstrate that the local authority has not followed due process and considered the
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Biodiversity Duty. Whilst it is unlikely that a challenge based on the Biodiversity Duty will prevent a decision,
such as the close of social care facilities, being made, it could be used as a delaying tactic.
In order to reduce the risk of successful challenge a local authority will need to demonstrate that it has
complied with its Biodiversity Duty. If there are not realistic options for maintaining and enhancing the
biodiversity in a manner consistent with the proper exercise of that particular function then this will need to
be recorded, as will the reasons why this is the case.
Conclusion
It is encouraging that efforts are being made to improve biodiversity within Wales. It is also positive that this
appears to be part of a wider legislative programme. However a number of uncertainties remain which need
to be addressed prior to the Biodiversity Duty being commenced so that local authorities fully understand the
extent of their responsibilities. Only if local authorities fully understand their responsibilities can the aim of
the Biodiversity Duty be achieved without creating an unnecessary burden.
Ben Standing | +44 (0)115 976 6200 | [email protected]