National Vetting Bureau (Children and Vulnerable Persons) Act 2012

The National Vetting Bureau (Children and Vulnerable Persons) Act 2012 came into force on 29th April 2016. All individuals and organisations working with children and vulnerable persons, or with regular access to or contact with them, should be aware of their obligations under this new legislation.

Who is to be vetted

Under the new legislation, vetting is now mandatory in circumstances where “relevant work or activities” in relation to either children or vulnerable persons, as defined, is carried out by any individual, except in certain limited circumstances. Individuals covered by the legislation include employees, contractors and unpaid volunteers.

“Relevant work or activities” in relation to children includes:

  1. any work or activity which is carried out by a person, a necessary and regular part of which consists mainly of the person having access to, or contact with children under certain legislation including the Child Care Act 1991, Education Act 1998 and Health Act 2007 or in a hospital or health care centre setting;
  2. treatment, therapy or counselling provided to a child;
  3. care or supervision of children;
  4. the provision of education, training, cultural, recreational, leisure, social or physical activities to children (whether on a commercial basis or not); and
  5. the provision of advice, guidance or developmental services to children.

This is not an exhaustive list. Roughly equivalent provisions apply in relation to vulnerable persons, who are defined as people, other than children, who:

  1. are suffering from a disorder of the mind (including dementia);
  2. have a physical impairment (whether as a result of injury, illness or age); or
  3. intellectual or physical disabilities; and

which are of such a nature as to restrict the capacity of the person to guard themselves against harm, or that result in their requiring assistance with daily living activities including dressing, eating, walking, washing and bathing.

Database

The Act provides for the establishment of a database system, which is to be operated by the National Vetting Bureau, formerly the Garda Central Vetting Unit. This database will contain registers of:

  1. Relevant organisations;
  2. Specified information; and
  3. Vetted persons.

“Relevant organisation” means any person, including a company, who employs any individual to undertake relevant works or activities, or uses contractors or volunteers to do so (whether or not for commercial or any other consideration). Providers of education or training courses where a necessary part of the placement involves participation in relevant work activities or activities are also included, as are employment agencies, bodies responsible for the regulation of certain professions and representative bodies or those who represent, for the purposes of these vetting procedures, another person, trade, profession or body, organisation or group or other body of persons that undertakes relevant work or activities.

A relevant organisation may not employ or otherwise use individuals to undertake relevant work or activities unless the organisation has received a vetting disclosure from the Bureau in respect of that person. Any person who does so is guilty of an offence, which can lead to a fine of up to €10,000 or imprisonment for up to five years.   Arrangements entered into prior to 29th April are excluded from this, but relevant organisations will have to apply to have individuals retrospectively vetted if no vetting has previously taken place.

Employers and those now seeking to contract individuals to undertake work should be careful to ensure that Garda vetting is completed before committing to any employment or contractual arrangements.

Application process

An application for vetting disclosure in respect of an individual must be made by a liaison person, notified to the Vetting Bureau as such, for the relevant organisation in question.  Vetting will involve searching for convictions as well as for “specified information”.  This is information concerning a finding or allegation of harm to another person that is received by the Bureau from the Gardai or certain organisations and which is of such a nature as to reasonably give rise to a bona fide concern that the person may harm or attempt to harm a child or vulnerable person, incite another person to harm them, or cause them to be harmed or put at risk.

Individuals to be vetted must be notified by the Bureau of any intention to disclose specified information to the relevant organisation, and they can appeal the decision if they so wish.

Those vetted prior to 29th April will be entered into the register of vetted persons.

Compliance inspections

The Bureau will now have compliance officers, who will be permitted to:

  1. Enter and inspect premises occupied by relevant organisations;
  2. Inspect and take copies of any books, records, etc relating to vetting procedures;
  3. Remove them;
  4. Require any individuals, including the liaison person to give information or assistance or produce books or records;
  5. Examine any person and require them to answer questions as required and to make a declaration as to the truth of their answers.

In light of these new powers, relevant organisations should make sure that they are sufficiently organised to be able to appropriately deal with an inspection, should one occur, and that everyone who needs to be vetted is.

Our above memo is prepared for general information purposes; it does not purport to provide legal advice. O’Connor solicitors accept no responsibility for losses that may arise from reliance on information contained in this post. It is intended to identify general issues on which you may require legal advice. Full legal advice should be taken from a suitably qualified professional when dealing with particular circumstances.

 

Regulation of Lobbying Act 2015

Operational Parts of Act as at 1st September Parts 1 (Prelim. & General), 2 (Registration), 3 (Code & Guidance) and 5 (Misc.) Effective from the 1st September 2015. Critically Part 4 (enforcement) is not yet in operation (likely to come into effect some time after first review of Act in 2016);…

Role and Duties of Executors

This is a general summary overview of your Role and Duties as an Executor in respect of the administration of the Estate which may be of assistance to you and answer some questions you may have regarding your role.

Your function as an Executor (also called a Legal Personal Representative) is to extract a Grant of Probate to the Estate and to administer the Estate of the deceased.

As Executor your powers and duties date from the date of death of the deceased.

From the date of death the whole Estate devolves or passes to you as Executor. You have very wide powers under general law, apart from any powers given to you under the Will.

Personal Representatives are legally obliged to distribute the Estate of the deceased as soon after death as is reasonably practicable having regard to the nature and the extent of the Estate. However, no action can be taken against an Executor for their failure to do so before the expiration of one year after death (referred to as the Executor’s Year). However, if money is due to any creditor of the Estate, such as Revenue, they can bring proceedings against the Executor without waiting for the expiration of the year as aforesaid.

The duties of an Executor last for life, therefore your obligations as Executor are ongoing.

The following is a simple set of guidelines on the powers and duties of Executors. It is, necessarily, set in very brief and summary form but it is hoped that it will be of assistance to you.

We shall be guiding and advising you in all matters in relation to the administration of the Estate and we will be undertaking all your tasks which we are able to undertake and as per our Letter of Engagement.

We will, of course, be instructing you in all those duties or tasks which you alone can perform and likewise we will fully explain all documents and Declarations which you are required to sign during the course of the administration.

DUTIES OF AN EXECUTOR

INITIAL ARRANGEMENTS FOLLOWING THE DEATH.

The first duty of an Executor is the disposal of the deceased’s body of which the Executor has custody until burial or cremation. Effect should be given to any wishes of the deceased as to the disposal of his or her body (although these are not legally binding). The deceased should be buried in a manner suitable to the Estate, which he or she leaves behind him or her.  In practise all of this will have already been arranged and dealt with by the deceased’s family, namely yourselves.

VALUATION AND PROTECTION OF ASSETS.

The next duty is to ascertain the precise value and extent of all of the deceased’s assets. Generally once a bank or financial institution is notified of a death the accounts or investments are automatically frozen and no further activity can take place in relation to the accounts. An Executor may also sell or otherwise dispose of, at his or her discretion, the goods and assets of the Testator before the Grant of Probate issues but this would only really be limited to such matters, if appropriate, as household goods, car or other personal effects. However, certainly in relation to assets such as land or stocks and shares it would be difficult to do so without the Grant of Probate and, in practice, sales of assets will usually only occur after the Grant of Probate issues. The Executor must ensure that the assets of the Estate are properly protected. It follows that there is a duty to insure with a reputable insurance company all assets normally requiring insurance, such as a house or land or other valuable items such as jewellery, house contents, car, etc.

ASCERTAIN LIABILITIES AND BENEFICIARIES.

An Executor must ascertain all outstanding debts, taxes etc. and check that there are no claims outstanding against the Estate. All of the beneficiaries must also be ascertained. An Executor must make enquiries of all beneficiaries in relation to prior gifts or inheritances received by them, where appropriate, and, again, where appropriate to obtain details of the Personal Public Service (PPS) number for each beneficiary. Quite often it will also be necessary for an Executor at this stage to open an Executor’s Bank account, usually with the same bank where the deceased was a customer. This is so all the funds received during the course of the administration can be lodged to the one account. Usually a cheque book is requested so that cheques can be written on the account when the need arises. If necessary, an Executor can also apply for an overdraft facility on the account, should one be required, if there are any urgent debts or bills that have to be paid before the Grant of Probate to the Estate issues and the funds in all of the deceased’s accounts are gathered in.

INLAND REVENUE AFFIDAVIT.

When all enquiries have been made (and these can be numerous and complex) a schedule or list of all the assets and liabilities of the deceased must be prepared. This is an official document known as an Inland Revenue Affidavit and has to be sworn by the Executor along with several other relevant documents and declarations.

EXTRACT RELEVANT GRANT AND COLLECT ASSETS.

When all the relevant papers have been lodged and the relevant Probate and/or tax offices, the Grant of Probate subsequently issues within a period of several weeks. The Executor is then in a position to collect in all the deceased’s assets.  It is, at this stage, that assets not being specifically given to named beneficiaries will be sold or retained as appropriate.

PAY EXPENSES AND DEBTS OF THE ESTATE AND DEAL WITH TAXATION MATTERS.

The Executor is obliged to pay the funeral expenses and all other outstanding debts of the deceased. Generally, the funeral bill is the first item paid as it is the only debt that a bank or other financial institution will release funds from a frozen account for. Any other outstanding debts or costs must be paid and discharged at this stage. The Executor is then required to distribute the assets to those entitled, while ensuring that taxes are paid. These taxes include all taxes due by the deceased prior to his or her death, all taxes arising out of the administration of the Estate itself and possibly inheritance tax or capital gains tax arising out of the distribution of the assets to the beneficiaries, depending on the circumstances of the case. In certain circumstances it will be necessary for the beneficiaries themselves to file inheritance tax returns. In general, it will be necessary to make sure that all of the pre-death taxes and Estate taxes and, where appropriate, inheritance tax, are paid and discharged and clearance, where appropriate, obtained from the Revenue Commissioners before the Estate is finally distributed.

ADMINISTRATION ACCOUNT.

Finally, the Executor must furnish an administration account wherein he or she accounts for all monies received and all monies distributed during the administration period and a copy of the administration account is sent to any relevant beneficiaries. It is important that accounts are kept of all income and expenditure and any Executors Account Statements furnished to us as and when received clearly itemising the activity on the account so as to facilitate the expeditious preparation of the

DUTY FOR LIFE.

Duties of the Personal Representative are for life. For example, if any assets are discovered after the distribution of the Estate is complete, it is the duty of the Personal Representative to dispose of that asset as per the Will or on Intestacy as appropriate and deal with any associated tax issues arising therefrom.

RELEVANT POINTS FOR EXECUTORS (FREQUENTLY ASKED QUESTIONS).

The following points are of relevance to Executors and are mentioned here as they are the most frequently raised queries asked:

  1. There is no obligation on an Executor to act in relation to the administration of the Estate. An Executor has a choice to accept, reserve or renounce their executorship. You should note that once you accept your appointment as an Executor, once the Grant of Probate issues, you cannot then turn back and decide not to act without the consent of the High Court. By reserving your right to act, you will stand aside from the administration of the Estate and will not be actively involved in same but if the need arises you can come back into the administration at a later date and apply to the High Court for a Grant of Probate to issue in your own name. This will involve a fresh application to the Probate Office.By renouncing your right to act you will permanently stand aside from the administration of the Estate and will not be allowed to become involved in the Estate in any way, as Executor, at any point in the future.
  2. The general rule is that an Executor sufficiently discharges his/her duty where he or she takes all precautions which an ordinary prudent person would take in managing similar affairs of his or her own. The office is a personal one, the Testator having chosen the Executor for trustworthiness purposes.
  3.  An Executor may not delegate his/her authority but he/she may need to employ other persons, experts in their own field, to help in the administration of the Estate such as Accountants or tax advisers.
  4. The office of Executor is gratuitous, i.e. the Executor is not entitled to receive fees or to profit from carrying out the duty of Executor. However, neither should the Executor incur a loss, so all expenses properly incurred during the administration period are recoverable by the Executor.
  5. There is no obligation on an Executor to give a copy of the Will to anyone before it is admitted to Probate, or to inform a beneficiary of his interest. If required, an Executor must give any information to a beneficiary in relation to his interest in the Estate, and in the normal course he will do so in any event. However, it should be noted that once the Will is “proved” (i.e. admitted to Probate) and the Grant of Probate issues, a copy of the Will is contained in the Grant of Proabte and the Will becomes a document of public record, of which anyone is entitled to inspect and obtain a copy.

For further information contact Helen McGrath, Partner :

Helen.mcgrath@oclegal.ie

 

Guide to Charity Law in Ireland

Thompson Reuters publishes Guide to Charity Law in Ireland prepared by John C. O’Connor and Helen McGrath, O’Connor Solicitors.

http://global.practicallaw.com/8-632-9148

 

Guide To Charity Law in Ireland

Thompson Reuters publish Guide to Charity Law in Ireland prepared by John C. O’Connor and Helen McGrath, O’Connor Solicitors

http://global.practicallaw.com/8-632-9148

 

Part 4 of the Charities Act 2009 coming into operation

On the 5th of September 2016, Part 4 of the Charities Act 2009 will come into operation.  Part 4 of the Act provides for the protection of charitable operations, the investigation of Charities’ affairs, and the appointment of Inspectors.

 

Data Privacy at work

Data privacy at work.

As with all rights, they bring responsibilities; they are not unqualified. The right  to privacy  is frequently  balanced  with the exigencies  of the common good; it is fair to say that the Courts have typically left both privacy and the exigencies  of the  common  good  without  rigid   parameters. We  must  default  to  the  great  lawyer  escape  argument   on  these  points; namely that each case must be judged on its merits.

Employees  have  a right  to  data  privacy  in the  workplace;   this  is not  an absolute  right.  It is balanced with other rights such as the right to one’s good name, the right to earn a living and to hold property.

Data privacy issues arise in the workplace from the time that an employee applies for a job; through to the termination of their employment and for a reasonable period after it ends.

Data governance should be actively reviewed by an employer but particularly where there is a change in how an employee may be required to work. For example, if an employer agrees to allow an employee work from home or outside the employer’s premises; data security and privacy of personal data of clients, customers’ and other third parties must be protected. Care must be taken in relation to how an employer will monitor employees working from home; for example, an employer does not have a right to enter an employee’s home without their consent.

Boundaries- What is considered private?

What are reasonable boundaries on data privacy within the workplace?

Peev V Bulgaria 64209/01   [2007] ECHR 6551

The applicant   was   employed   as an expert   by the Supreme   Cassation Prosecutor’s Office (SCPO) in Bulgaria.

Following the  death  by suicide  of a prosecutor   colleague who had alleged that  the  chief prosecutor   and  his entourage   were  harassing  and  exerting improper  pressure on him, the applicant  considered  resigning  and to that end prepared  two draft letters  which he kept in a drawer  of his office desk. However, he eventually  decided  not to resign and sent a letter  to two daily newspapers   and  the  Supreme  Judicial Council making  a number   of grave accusations   against   the  chief  prosecutor    and  urging  the  authorities   to investigate.

One of the newspapers published the letter.  On the  evening  preceding publication,  a prosecutor  from the SCPO sealed off the applicant’s  office and ordered   the  duty  police  officer  not  to  allow  the  applicant   to  enter  the building as he had been dismissed. The  applicant  was  subsequently   informed  that  his resignation   letter  had been   brought    to  the   attention    of  the   chief  prosecutor    and   that   his resignation  had been accepted. Some  days  later,  the  applicant  was  allowed  into  the  office to  collect  his personal   belongings.  He discovered   that it had been searched   and that certain items, including the draft resignation letters, were missing.

The   prosecuting     authorities     refused    to   open   criminal   proceedings. However,  the  applicant  brought  a civil action  for unlawful  dismissal  and obtained   an  order  for his  reinstatement    and  an award  of compensation. Although  he  was  not  in  fact  reinstated    in  his  former   position   as  the department for which he had worked  had been abolished  in the interim,  he did succeed in obtaining  a post with a similar body.

The ECHR concluded that under Article 8 the applicant had a “reasonable   expectation of privacy”, if not in respect of his entire office, at least in respect of his desk and filing cabinets.  The search of Mr. Peev’s office amounted to interference   by a public authority with the applicant’s private life. Under Article 13 (in conjunction  with Articles  8 and  10) –  the Government  had failed to show that  any remedies  existed  in respect  of the unlawful  search. The domestic   proceedings   in which the   applicant   had challenged   his dismissal had concentrated   on the resignation   issue and had not discussed the substance   of his freedom-of-expression    grievance. The proceedings, therefore,  did  not  amount  to  an avenue  whereby   he  could  vindicate  his freedom  of expression  as such and no other  remedy  had been suggested  by the Government.

Halford V United Kingdom (25 June 1997)

Ms. Halford was   appointed   to the   rank   of Assistant    Chief Constable with the Merseyside Police.  Following  a refusal  to promote     her, Ms.  Halford commenced    proceedings    in  the Industrial Tribunal  claiming  that  she  had  been  discriminated against on  grounds   of  sex.  Ms. Halford   alleges that   certain members of the   Merseyside    Police   Authority   launched   a ‘campaign’   against her in response   to her complaint   to the Industrial Tribunal. This took the form of leaks to the press and interception of her telephone calls.

She alleged that calls made from her home and her office telephones were   intercepted    for the purposes   of obtaining information to be used   against   her   in the   discrimination proceedings.  She claimed a breach of Article 8 of the Convention.

The ECHR held that conversations   made on the telephones   in Ms. Halford’s   office at Merseyside   Police Headquarters   fell within   the scope of “private   life” and “correspondence” in Article 8 (1).

Data Governance

There is a critical need for all employers  to know what they are required to do as data controllers;  an employer  will hold data in relation  to employees but following the DPA obligations  the data must be “adequate,  relevant and not excessive’?

An employer  must accept that the majority  of data kept about  an employee is data  that  must  be given to the  employee  upon  request  under  the  DPA.

There are some exceptions but those exceptions are limited. This is important   if there an employee raises a grievance or there is a disciplinary process underway. A common   error   by employers is to assume that data really only refers to the personnel file and anything outside that is not covered by the DPA. This is wholly incorrect.

Sensitive   data   including   health   information,   trade   union   membership, details  of criminal  convictions  can be processed  if it is necessary  “for the purpose   of  exercising  or  performing   any  right   or  obligation   which   is conferred or imposed by law on the data controller in connection  with employment’

It is advisable for an employer to have a clear data retention policy relating to all employees.  At a certain time, it will no longer be reasonable   to retain a former employee’s data; or for example, the records of a recruitment drive.

Workplace Surveillance

An employer  can monitor  employees  in the  workplace  provided  that  any limitation  on an employee’s  right to privacy is proportionate   to the possible damage to the employer’s  legitimate interests.

For example,  in Case Study  101/2013  the  night  manager  of a hotel  used  a mobile phone  to take photographs   of employees  who had fallen asleep  on duty.  The photographs   were used in subsequent   disciplinary proceedings which the Data Protection   Commissioner   (DPC) found to be against   the DPA.

Danniger   V SIPTU Labour Court LCR 19328

An objection  was  raised  by SIPTU to the  company  operating  a biometric clocking-in system  because  it had been  brought  in following the  dismissal of a small number  of employees  who had been  abusing the system.  SIPTU argued   that   this   was   excessive;   the   company   argued   that   it  was   in compliance  with  the  DPA because  the  copies  of the fingerprints   were  not stored   on  the  system  and  could  not  be  retrieved   from  the  system.  The Labour Court recommended   that the system  continued for so long as it was transparent and legally operated.

Kopke V Germany 420/07[2010] ECHR 1725

On 5 November 2002 the applicant’s employer dismissed the applicant without notice for theft. The applicant was accused of having manipulated the accounts in the drinks department of the supermarket where she worked and of having taken money (some 100 euros during the period in which she had been covertly filmed by a detective agency on behalf of the employer) from the tills for herself which she had hidden in her clothes.

Ultimately the case reached the ECHR where Ms. Kopke alleged a breach of her Article 8 right to privacy because of unlawful processing of her personal data. The ECHR found that the surveillance had only taken place for two weeks and was not in the immediate vicinity of where Ms. Kopke usually worked; further, it found that there was a balance between her right to privacy and the employer’s legitimate interest in protecting its property rights; in establishing the truth of what was happening in the workplace; to exonerate fellow employees who were not guilty of any offence.

What changes are coming?

The Article 29 Data Protection Working Party published an Action Plan for the implementation of the new General Data Protection Regulation (GDPR Regulation (EU) 2016/679).

The Regulation provides for a new governance model with enhanced roles for Data Protection Commissioners remaining in the EU will be established.

It envisages enhanced co-operation between national DP authorities.

A one-stop shop on enforcement cooperation is envisaged.

Guidance will follow on the following topics;

 

  • The new portability right; easy transfer of data between service providers;
  • The Right to be forgotten;
  • Affirmative steps for a data subject’s consent to release of data to be valid;
  • High Risk and Data Protection Impact Assessments
  • Certification
  • Roles of Data Protection Officers

 

This post has been prepared for general information purposes. As such it does not purport to provide legal advice. O’Connor Solicitors accept no responsibility for losses that may arise from reliance on information contained in this document.  It is intended to identify general issues on which you may require legal advice. Full legal advice should be taken from a suitably qualified professional when dealing with particular circumstances.

 

Charities and Non-Profits : Launch of Benefacts.ie

Benefacts.ie was launched on the 18th May, 2016.

This is a new online database of 18,600 Irish Non-Profits. Benefacts will provide searchable access to regulatory, financial and governance data about the non-profit sector which employs almost 108,000 and turns over more than €7bn in annual revenues. The Benefacts database includes all registered charities and thousands of other NGOs including education institutions, social enterprises and sports and professional bodies.  Benefacts works in co-operation with a variety of regulators to acquire data currently in the public domain for inclusion in the database, providing access to a broad range of information on the Irish non-profit sector in one easy to access location.

For further information see benefacts.ie.

Company Directors: what are your responsibilities?

As a society, we need to have confidence in the companies that we do business with.  We want to know that they will be run in a responsible way by their directors and officers.

The Companies Act 2014 (“the Act”), for the first time codifies, the duties and obligations of company directors and officers.  Part 4 addresses corporate governance; Part 5 outlines the duties of directors and other officers; Part 14 deals with compliance and enforcement; disqualification and restriction of directors.

Under Section 223, directors are now required to sign the following declaration;

“I acknowledge that, as a director, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law”.

Directors have what is known as a “fiduciary duty” to the company. This means  that the director must act solely for the benefit of the company.

The Act requires directors to take into account the interests of employees. It also requires directors to consider the interests of members/shareholders. However, their ultimate duty is to the company.

Section 228 includes the following requirements of directors:

■ act in good faith; and in the best interests of the company;

■ act honestly and responsibly in relation to the conduct of the affairs of the company;

■ act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law;

■ not to benefit from or use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless the company’s constitution permits it or a resolution is passed in  general meeting;

■ not to agree to restrict the director’s power to exercise an independent judgment unless this is expressly permitted by the company’s constitution;

■ not to agree to restrict the director’s power to exercise an independent judgment unless this is expressly permitted by the company’s constitution;

■ to avoid any conflict between the director’s duties to the company and the director’s other interests unless the director is released from his or her duty to the company in relation to the matter concerned;

■ to exercise the care, skill and diligence which would be reasonably expected of a person in the same position with similar knowledge and experience as a director. A director may be held liable for any loss resulting from their negligent behaviour

A director may be held liable for any loss resulting from their negligent behaviour and required to indemnify the company for any such loss of damage.

Section 235 of the Act states that the company cannot indemnify its directors and officers from liability for negligence, default, breach of duty and/or breach of trust; it can purchase insurance to cover them for allegations of wrongful acts such as the above.

It is prudent for all company directors and officers to ensure that prior to taking office; the company has directors and officers insurance cover in place. In the absence of same, a director faces unlimited personal liability for decisions taken in the role.

A directors and officers policy (“D&O”) is typically divided into Side A cover which relates to protection for directors and officers and their personal assets against liability that the company cannot indemnify them for; Side B which relates to the company balance sheet and liability that the company can indemnify directors for; Side C typically relates to company liability subject to a stated limit.

Given the duties and obligations of directors and officers, it is prudent to ensure that prior to taking up an office; the company has purchased an adequate D&O policy. This can support directors in their role by lessening the exposure of their personal assets when defending allegations of wrongful acts.

Our above memo is prepared for general information purposes; it does not purport to provide legal advice. O’Connor solicitors accept no responsibility for losses that may arise from reliance on information contained in this post. It is intended to identify general issues on which you may require legal advice. Full legal advice should be taken from a suitably qualified professional when dealing with particular circumstances.

Re-branding, change and Employment law

REBRANDING, CHANGE AND EMPLOYMENT LAW

 When a company is contemplating a change of brand, a vital part of the change management process is engagement with employees. A change in brand, focus and company culture affects employees. They are the people who will be tasked with managing and supporting the changes that a rebranding will bring. The company will invest time and money in planning, designing and implementing the new brand. It must also focus on whether the change of brand, focus and company culture complies with employment law.

It is useful to examine two high profile re-branding exercises demonstrating the importance of employee engagement. One rebranding was a resounding success and the other a regrettable mistake. A key factor in the success and failure of each was the manner in which each enterprise engaged with its employees at the time. Two UK cases provide good examples for Irish businesses on the need to vet rebranding changes for compliance with employment law.

 The Success: Arthur Anderson Consulting to Accenture[1]

Arthur Anderson Consulting was an offshoot from the Arthur Anderson accountancy firm. The consulting element of the business overtook the accountancy firm in financial terms; benefitting from a surge in popularity of consulting firms in the 1980’s. This led to a split between the two with the consulting wing paying 15% of profit to the accountancy firm. The inevitable legal battle followed; lasting for two and half years, costing millions of dollars and ultimately being resolved at arbitration in August 2000. Part of the ruling of the arbitrator was that Anderson Consulting had to change its name by December 2000 and it was released from the requirement to pay 15%.

 To begin with, the views of all employees were sought on what the new name of should be. 2,677 suggestions were made by employees from 42 countries. The names were then voted on until Accenture was settled upon. Given the short time frame, the business moved quickly to phase in the new name while phasing out the Anderson Consulting brand. By New Year 2001, employees returning to work post -holiday came back to fully rebranded offices right down to their individual business cards. The CEO and the Chairman communicated directly with the employees through webcasts in each of the global offices. Managers were provided with information packs for clients and the market for immediate delivery. Arguably there was a legal imperative behind the swift efficiency – the arbitrator’s award had to be complied with. It is an impressive example of how to manage a major change beginning with a global workforce.

 The Failure: Royal Mail to Consignia and back again

The origins of Royal Mail can be traced back to the 1500’s. The UK Government under Labour decided that it would liberalise the postal and communications market within the UK in 2001. This led to a decision by Royal Mail to undergo a rebranding exercise. It is understood that work was done on the name change from the self- explanatory Tudor designed Royal Mail to Consignia; without any employee engagement, any customer opinions being tested and without any advertising about the name change. The lack of engagement on the change with employees led to the unions boycotting it. The reaction was neatly summarised by John Keggie of the Communications Workers Union who said “We should be trading on the British Post Office’s worldwide reputation for honesty and integrity. I cannot see the point of inventing a new name to replace a highly respected tried and tested brand which the public hold close to their hearts. We will campaign to persuade the Post Office to change its mind.” [2]

 The result of the exercise was a cost of £2 million including disposal of Consignia branded signage that didn’t comply with UK Company law requirements to begin with. Different interpretations of the new name were possible notably that it was close to Spanish for “left luggage”. The name was ultimately changed back to Royal Mail.

 Employment law issues

Legally, a re-brand and a desire for corporate change or for a particular corporate image can breach employment law.

Lisboa v Realpubs Ltd & Ors UKEAT/0224/10/RN.

Charles Lisboa brought a claim against Realpubs Ltd in the following circumstances; the Coleherne Arms Public House in Earl’s Court, London developed a national and international reputation as London’s first “gay pub”. Realpubs Ltd own and operate “gastropubs” and specialise in buying failing pubs, rebranding them as gastropubs and repositioning them in the market. The Company acquired the Coleherne Arms in 2008 when its fortunes were in decline. It was refurbished and renamed; launched as the Pembroke Arms and opened for trade on the 5th December 2008.

Mr Lisboa interviewed for a role as Assistant Manager and was appointed. At his interview; he was told that the plan was to “transform it (sic the pub) from a ‘gay pub’ into a gastropub”. Evidence was given that the general manager was instructed to display a board outside the pub saying “this is not a gay pub” which Mr Lisboa amended to “under new management- friendly staff”.

An e-mail was sent to an advisor to an investment company with an interest in Realpubs  stating “management are hitting the streets and making sure everyone knows about us and that we are no longer an exclusively GAY pub. We are barring ‘over the top’ old customers but this needs to be done right!!….”

The policy of Realpubs was to encourage staff to seat customers or groups of customers who did not appear to be gay in prominent places in such a way that they could be seen from outside the pub. A director visited the pub at lunchtime with his family on Sunday 14 December 2008 and deliberately positioned himself at a table within sight of the outside. On the same occasion, the Claimant stated in evidence, that the director said;”Charles is gay but another kind of gay.” The director  denied making that remark but the ET accepted the Claimant’s evidence.

The gender balance amongst staff members changed. It was Realpubs policy to have a more even balance between the sexes. At the re-launch on 5 December there were 9 male members of staff: 5 female and 3 male managers. By 5 January 2009, the numbers of male and female non-managerial staff were even at 6 each. 5 male members of staff had left during that month; 2 were dismissed on grounds of unsatisfactory performance.

The Employment Appeals Tribunal had no difficulty with the idea that the new owners wished to broaden the appeal of the pub. However, it found “plainly andunarguably” that gay customers were treated less favourably on the grounds of their sexual orientation by the new owners and that Mr Lisboa was also treated less favourably on grounds of his sexual orientation. The question of remedy was remitted back to a newly constituted Employment Tribunal by the EAT.

  Similarly, in the case of Dean V Abercrombie & Fitch (2203221/2008) Ms Dean was recruited to work in a flagship store in London for the company. She was born without a left forearm and had a prosthetic limb from her left elbow down. She was required to work in the stockroom and on the shop floor. While on the shop floor she wore a cardigan over her uniform polo shirt however her line manager told her to work in the stock room and that she could only work on the shop floor if she took the cardigan off in order to comply with the company “look”.  The Court held that management “conspicuously failed to acknowledge that the claimant might have been justifiably upset at the peremptory way she was told to leave the shop floor, that this could have offended any sensitivity she might have felt about her disability or that any apology might have been appropriate.” An award of £7,800.00 together with £1000.00 for loss of earnings was made in favour of Ms Dean.

Employees are at the forefront of any rebranding process. The chances of success of the process are greatly improved with employee engagement from the very beginning.

 As illustrated by the above UK case examples, employers in this jurisdiction must also vet the proposed changes to ensure that they do not breach employment law. For example, a new requirement for employees to project a particular physical image or lifestyle and/or dress in a particular way may be discriminatory and breach the Employment Equality Acts 1998-2015. In addition, a business that seeks to attract a new customer base or consumer market share may breach the Equal Status Acts 2000-2012 by discriminating in the way that it offers its goods and services to the public. Both the Equality Acts and the Equal Status Acts prohibit discrimination on the grounds of gender, sexual orientation, disability, civil status, age, membership of the Travelling Community, race, religious belief and family status.