Posts

Penalty Profiles of the Fraudulent Use of Extracurricular Internships

In note No. 1451/2022, the INL (Ispettorato Nazionale del Lavoro, The Italian National Labour Inspectorate) expressed its views on the rules applicable to extracurricular internships started before and continued after the entry into force of the Budget Law 2022, which introduced new provisions in relation, in particular, to the penalties for their fraudulent use as a substitute for employment relationships.

Given that the internship does not constitute an employment relationship and cannot be used as a substitute for subordinate employment, the provision stipulates that, if the internship is carried out fraudulently by circumventing these requirements, the host entity is punished with a fine of 50 euros for each intern involved and for each day of the internship. Such fine does not prejudice the possibility of recognizing at the intern’s request the existence of a subordinate employment relationship, based on the judicial pronouncement.

Since this is an offense of a permanent nature, in the case of extracurricular internships continued and/or concluded after January 1, 2022, the date on which the Budget Law came into force, the INL states that:

  • the punitive treatment is applicable where the internship itself is found to have been carried out fraudulently;
  • the offense takes place as of January 1, 2022, resulting in the calculation of the relevant penalty for only the days starting from that date;
  • for the purposes of the charge of the offense, it is sufficient to prove that the internship relationship was carried out as a genuine subordinate employment relationship;
  • on the other hand, the administrative penalties provided for in cases of requalification of the employment relationship (i.e., failure to notify the establishment of the employment relationship and failure to deliver the declaration of employment) are not applicable.

This is without prejudice to the possibility, at the trainee’s request, of recognizing the existence of an employment relationship as of the judicial pronouncement, starting at the establishment of the relationship, even if it occurred before January 1, 2022.

With reference to the social security profiles, it should be clarified that since the social security relationship is taken away from the availability of the parties, on the other hand, the recovery of contributions cannot be considered to be conditioned by the worker’s choice to request the recognition of the employment relationship in the hands of the host entity.

>> Find out more about LDP Services

 

Firm Goes For Partnership Model for First Time In Its History

A growing firm appears to be bucking the trend for moving away from the partnership model by inviting a dozen staff to become partners.

Fletchers Group said it has launched a new partnership programme for the first time in its 35-year history. The 12 new partners will join the 12 existing directors of the business in an attempt to attract and retain talent for the medical negligence and serious injury firm.

The move comes at a time when the number of partnerships in the legal profession has decreased and lawyers appear less focused on becoming partner. Other firms have also emerged which offer senior solicitors the opportunity to retain a share of their fees as a consultant without joining a partnership. Many of these firms have also marketed themselves to potential recruits as being more flexible around working hours and commitments outside of work.

Peter Haden, chief executive of Fletchers, said: ‘The partnership programme is a core part of our people strategy, which we’ve created both to attract great legal talent, and to improve career satisfaction for our existing teams.

‘It includes embracing full flexible working; a concept that we celebrate for its genuine benefits to our colleagues. We have formally instituted new policies for home working, daily working and shareable jobs; as well as shaking up our maternity and paternity policies to become a genuine leader in this field.’

Fletchers is not changing the management or ownership structure and partnership does not come with a specific leadership or responsibility or taking charge of a department. The idea is to identify a broader leadership group to reflect that there are senior lawyers in the group who should play an active part in leadership and strategy discussions, for example on merger deals.

Haden said the group wants to ‘re-commit to the professionalism of what it means to be a lawyer’. There are also ancillary benefits such as a better benefits package and a bonus structure to enable them to participate in the growth of the firm.

Haden added that the new cohort was identified not only for their legal expertise but also those who were innovators who come up with different ways to build the business.

The partnership programme will be ongoing and more partners elected every year, with no set limit to the number.

Fletchers was acquired by Sun Capital in October last year, and new owners say they want to build scale, through recruitment as well as mergers and acquisitions.

The group has a 520-strong headcount with offices in Manchester and Southport. It has recruited 120 staff in the past 12 months.

 

Lord Lloyd-Jones Re-joins The Supreme Court – Seven Months After Retiring

The UK’s top court has confirmed that Sir David Richards will be replacing Lady Arden who retired in January, whilst Lord Lloyd-Jones will be re-appointed after the mandatory retirement age for judges in England and Wales was increased from 70 to 75.

The top bench is currently made up of 11 men and one woman, all of whom are white.

Lord Reed, President of the Supreme Court, commented:

“We look forward to welcoming Lord Lloyd-Jones back to his position as a Justice. Following his retirement in January 2022, having reached the then mandatory retirement age of 70 shortly before it was increased by Parliament to 75, he has continued to hear cases as a member of the Court’s Supplementary Panel. He will continue to make an enormously valuable contribution to the Court on a wide range of cases, and especially in dealing with appeals in the field of international law and criminal law.”

David Lloyd-Jones grew up in Pontypridd in Wales and studied law at Downing College, Cambridge. He was called to the bar in 1975, the same year in which he became a Fellow of Downing College, a post which he held until 1991. After becoming a QC in 1999 with his practice including international law, EU law and public law, he went on to become a judge in the High Court in 2005 and the Court of Appeal in 2012.

Meanwhile, Sir David Richards was educated at Oundle School and then Trinity College Cambridge where he also studied law. He was called to the bar in 1974 and primarily built his practice around company and corporate insolvency work, taking silk in 1992. His life as a judge began in the High Court in 2001 and consists of stints in High Court’s Chancery Division in 2003, the Competition Appeal Tribunal and the Court of Appeal from which he retired last year upon reaching 70.

Commenting on the new appointment, Lord Reed said: “We are also delighted that Sir David Richards will be joining us as a Justice of the Court. His outstanding legal ability and breadth of experience, notably in company law and corporate insolvency, will maintain the Court’s expertise in these areas following Lady Arden’s retirement, and will be invaluable in maintaining the high quality of our judgments and our reputation as an international centre of legal excellence.”

The appointments have received a mixed response on legal Twitter.

Blackstone Chambers’ Dinah Rose QC tweeted: “Both of these Davids are good and clever judges. But it’s disappointing that the UKSC continues to be all white and 11/12 male. The secrecy of the process makes it difficult to understand the reasons why. There are several excellent candidates in the CA who are women or PoC.”

Elsewhere, James Lee, a professor of law at King’s College London, wrote: “David Richards LJ is an excellent Chancery judge. However, despite all the efforts made to promote a wide range of applications, these appointments do not advance the diversity of the highest level of the judiciary.”

Gatehouse Chambers’ Faisel Sadiq also commented on Twitter: “I’m pretty cross about this. Just looking at the EWCA (and only the judges I know) we have Simler, King, Carr, and Singh each and any of whom would have been brilliant additions. Do they release D&I stats? They should. The results might answer many of our questions.”

In recent times the UKSC has taken steps to try and improve its openness and diversity, including teaming up with a charity to launch its first-ever paid internship aimed at aspiring barristers from underrepresented communities.

 

Briefing on the New Draft Legislation on Exporting Data out of China

On 30 June 2022, the Cyberspace Administration of China (the “CAC“) released the draft of Provisions on Standard Contracts for Cross-border Transfers of Personal Information (the “Provision“) for seeking public comments until 29 July 2022. This Provision contains an appendix of a sample template of standard contractual clauses (the “SCC“) for businesses to integrate into their commercial contracts entered into with other data handlers.

Since the Provision is drafted in accordance with the Personal Information Protection Law (the “PIPL“), the definitions formulated by the PIPL will be inherited by the Provision and consistent with the PIPL.

As per Article 38 of the PIPL, there are four scenarios for data exporters to transfer personal information outside of China legitimately, that is:

  1. The relevant security assessment organised by the CAC has been passed in accordance with Article 40 of the PIPL;
  2. The relevant certification of personal information protection issued by a professional institution according to the regulations of the CAC has been obtained;
  3. The contract in compliance with the standard contract terms provided by the CAC has been signed with the overseas personal information recipient; or
  4. Other conditions prescribed by the laws, regulations or the CAC.

The release of the Provision is to address the scenario (c) above and provide detailed guidance. According to Article 2 of the Provision, a data handler who intends to export personal information based on the scenario (c), shall enter into the SCC to establish the rights and obligations of both the exporter of personal information in China (the “Exporter“) and the overseas recipient (the “Importer“).

Most Exporters shall proceed with transferring personal information out of China by signing the SCC with Importers, instead of passing a security assessment or obtaining the certification. According to Article 4 of the Provision, a personal information handler (i.e. the Exporter in this case) shall meet all of the following conditions if it wants to export the personal information to the Importer:

  1. It should not be a critical information infrastructure operator (the “CIIO“);
  2. It handles personal information of less than 1,000,000 data subjects;
  3. It has provided personal information of less than 100,000 data subjects in aggregate to the Importer since 1 January of the previous year; and
  4. It has provided sensitive personal information of less than 10,000 data subjects in aggregate to the Importer since 1 January of the previous year.

In other words, CIIOs or personal information handlers who go beyond either of the above thresholds will not be able to legally transfer personal information out of China by signing the SCC. They would either carry out a security assessment organised by the CAC, obtain a certification of personal information protection issued by a professional institution, or follow any other condition prescribed by laws and regulations in the future as the case may be.

Other than signing the SCC, the Provision still requires Exporters to carry out a Personal Information Protection Impact Assessment (“Impact Assessment“) before transferring personal information out of China.

The Impact Assessment shall focus on i) the legal basis and necessity of transfer; ii) the scope and volume of data involved, the potential risks of such transfer; iii) Recipients’ warranties on safeguarding the personal information transferred; iv) the potential remedies for protecting the personal information for data subjects to deploy; and v) the impact of personal information protection policies and regulations in the country or region where Importers are located and governed, on the enforcement of the SCC. In sum, this Impact Assessment is equivalent to the TIA (Transfer Impact Assessment) under the General Data Protection Regulation (GDPR) as one would usually hear.

Once the SCC is signed and the Impact Assessment is completed, within 10 working days from the effective date of the SCC, the Exporter shall file the SCC and the Impact Assessment report with the CAC at the provincial level where it is located (“Cross Border Filing“).

It is worthwhile to note that the above filing is not a once-and-for-all process. Should there be any changes of circumstances that may affect data subjects’ rights and interests on their personal information, the Exporters shall amend, resign and redo the Cross Border Filing. The language of the circumstances of redoing the Cross Border Filing is rather ambiguous, i.e., the regulator may have a large room to interpret what can be deemed a change at its own discretion.

Failing to do, or redo, the Cross Border Filing with the CAC or filing false materials will cause administrative orders to rectify, to cease transfer and/or other administrative punishments according to the PIPL. If the violation is sufficiently serious to constitute a crime, Exporters may bear criminal liability as well.

The Provision is still a draft legislation, but once promulgated, it will definitely have an impact on companies with international data flows. We will follow this very closely and update our clients on the progress. We recommend companies start to review their data flows accordingly to be ahead of the legislative procedures.

Our lawyers are here to help answering queries in this regard. For more information, please speak to Le Rong and Nelson Tian.

 

2022 China Employment

Getting right personal information protection and maternity leave

Currently, companies worldwide are called by both domestic and international regulations to become corporate citizens rather than merely profitable entities. In China, 2021, domestic legislation focused on data and cyber protection and introduced measures to support the third-child policy. Namely, Personal Information Protection Law (“PIPL”), effective from November 1 2022, obligates companies to strengthen personal data handling, process, and storage, and from late November, provinces and municipalities across China extended maternity leave to support the 3-child policy (announced on May 31, 2021, following the Chinese Communist Party Politburo meeting chaired by President Xi Jinping). As a result, in 2022, human resources (“HR”) across China should diligently implement plans to comply with such changes and obligations.

At Horizons, we have been working with clients to adjust employee policies and summarise the main aspects for human resources to practically implement changes.

Personal Information Protection Law

PIPL is the first legislation to address misuse of personal data and sets forth mandatory requirements for companies processing such data. Though data handling related to human resources do not require the employee’s consent, PIPL does introduce stricter obligations for those handling sensitive personal information, such as biometrics, religious beliefs, medical and health and so forth. Namely, companies shall obtain specific consent and inform such individuals of the necessity and impact on their rights and interests. Therefore, companies should audit the existing personal information processing systems to gain a comprehensive employee data overview and, if necessary, draft specific consent forms aligned with PIPL.

Equally, companies may only transfer personal information outside mainland China by fulfilling provisioned conditions. Under PIPL, such conditions are generally outlined and require further guidelines for companies to proceed ahead. We suggest HR keep abreast of forthcoming related guidelines, especially those handling large volumes of personal information that meet a threshold set by the National Cyberspace Authority.

Maternity Leave

In late November 2021, parental leave extensions were adopted in Chinese cities and provinces to stimulate the 3-child policy. Extended leave policies aim to reduce the burden of childbirth and childcare. The extended number of days varies from province to province or city to city, for example in Shanghai, the maternity leave is extended to 158 days. For companies, the amended policies shall directly impact employee leave policies and workforce planning and costs to cover extended leave.

We suggest that companies should conduct an employee consultation process before any amendments are made to employee leave policies and ensure employees are entitled to the legally allocated number of leave days. Namely, clear specification of the type of leave and number of days such as maternity leave, paternal leave for working parents and carer’s leave. In this manner, companies can reduce the risk of labour disputes since the amendments are consented by employees and blinding.

Both PIPL and extended maternity leave reflects Environment Social and Governance (“ESG”) principles emerging in China. As an important international topic, we anticipate ESG to be present in forthcoming legislation in China, however, governed by President Xi Jinping Thought on Socialism with Chinese Characteristics.

If you are looking for labour law professionals to evaluate whether your data management or employee policy is compliant with the new legislation, please contact Horizons at country.partners@horizons-advisory.com, and our Partner in charge will be in touch.

Wang Zhengyang joins Leaders in Law as the exclusive Arbitration Law member in China

Leaders in Law, the leading platform in its field, is delighted to welcome Wang Zhengyang as our exclusively recommended & endorsed Arbitration Law expert in China. Wang’s office is located in Shanghai.

Mr. Wang Zhengyang specializes in the areas of litigation, arbitration, and foreign investment. He has profound knowledge of Chinese law and more than 30 years of legal practice experience, including 5 years in Court.

In the field of civil and commercial affairs, Mr. Wang has provided high-quality advisory services and litigation & arbitration legal services for many state-owned and private enterprises in the fields of finance, oil and gas, construction and real estate, manufacturing, logistics, and trading. In the criminal field, Mr. Wang has successfully defended many companies and individuals in major and complex criminal cases involving loan fraud, illegal business operation, contract fraud, and bribery.

Mr. Wang also actively provides criminal compliance training services for corporate customers, member companies of the chamber of commerce, member companies of the industry association, to help companies prevent criminal legal risks. Furthermore, Mr. Wang also specializes in foreign legal services. He has successfully defended foreign-funded enterprises and individuals involved in intellectual property infringement disputes, labour disputes, shareholder disputes, contract disputes, debt recovery disputes, illegal personal detention, contract fraud, illegal possession of drugs, etc.

If you require any assistance in this area, please use the contact details provided in Wang’s profile below or contact us at info@leaders-in-law.com & we will put you in touch.

New Regulations for applications with the Chinese Patent Office (CNIPA)

On October 17, 2020, the government of the People‘s Republic of China approved the fourth amendment to the Chinese Patent law (CPL), which has far reaching consequences for the quality of patent applications at the Chinese Patent Office (CNIPA). Chinese Patent law covers design applications as well as patents, utility models and aspects of trademark law.

Most relevant amendments to the Chinese patent law concern the term of protection for designs (see our separate article on the new Chinese patent law here) as well as higher maximum charges for remuneration in cases of infringement and cases of the attempt to file an application without adhering to common standards of patent filing practice which do not comply with the expectations of the Chinese government.

In brief, the most relevant changes in force from June 1, 2021 are the following:

  • Scope of protection and term of protection for designs The term of protection for designs (design patents) is prolonged from ten to a maximum of 15 years from the date of filing (Art. 42 CPL). The definition of designs  CPL in Art. 2will also cover partial designs as long as they describe parts of products.
  • Chinese priority for designs Design applications filed at the CNIPA can from now on, according to article 29 CPL and art. 30 CPL take priority from other applications filed with the CNIPA, designs as well as patents or utility models.
  • Quality control Art. 3 CPL asks for stricter quality control of applications filed with the CNIPA, as incentives by the Chinese government to file applications had recently effectuated a considerable amount of applications of little quality, which hindered the fair and free exchange of ideas for technical innovations.
  • Prolongation of protection in case of delayed examination
  • Higher compensation and disclosure requirement for defendants Maximum compensation for patent infringement is increased from 1 to 5 million RMB (630.000 Euro); in addition to that, significant punitive damages will be introduced. Defendants will have to face disclosure requirement for the estimation of damage calculation and the production of necessary proof if asked to by the court. Limitation period for claims for damages is increased to three years, in accordance with Chinese civil law.
  • Grace period The newly amended Chinese Patent Law introduces in art. 24 CPL a grace period of  six months. This amendment was introduced with respect to recent events in reaction to the global pandemic COVID-19.

In case of more than four years from the filing date or three years from the request for substantive examination compensation by way of prolongation of the term of protection will be possible. However, this will only be possible on request and for patents only.

Also visit the following link: https://english.cnipa.gov.cn/

Design applications in China from June 1, 2021 onwards

From June 1, 2021 onwards, design applications in China will be subject to the new Chinese patent law. From this date onwards, design applications at the Chinese Patent Office will also be possible for parts of designs. This new possibility is one of the most important aspects of the newly reformed Chinese patent law, as it harmonizes Chinese design regulations with European and US design law as well as the international practice of design registrations.

Protection of parts of designs was up to now, unlike the usual international practice, not possible. In the past, Chinese patent law only allowed the registration of designs as whole entities in connection with usable and purchasable products. The current reform of the Chinese patent law with regard to design applications is hence a most welcome harmonization with European and international standards. It remains to be seen if drawings according to these standards will be equally accepted by the CNIPA.

Another important novelty in view of the international protection of designs is the fact that the term of protection is prolonged from previously 10 to now 15 years. Which is, of course, most welcome but still 10 years less than the maximum protection of designs at the European Union Intellectual Property Office.

Also visit the following link: https://english.cnipa.gov.cn/

China Revises Administrative Regulation for Medical Devices

The newly amended “Regulation on the Supervision and Administration of Medical Devices” (“Regulations”, 医疗器械监督管理条例) was passed on 9 Feb. 2021 and came into force on 1 June 2021. The Regulation applies to the research and development, production, operation, and use of medical devices within the territory of China, as well as the supervision and administration of medical devices.

One of the core revisions is to establish a medical device registrant system. Pursuant to the system, the medical device registrant is the “producer” of the medical device product, and is responsible for the safety and effectiveness of the medical device during the whole process of research, production, operation, and use in accordance with law.

In addition, the Regulation requires medical device registrants and record holders to establish a medical device adverse event monitoring system, take the initiative to reevaluate the registered medical devices, and take applicable risk control measures in accordance with the reevaluation results.

The Regulation also strengthens the administrative penalties, stipulating penalties for medical device registrants and record holders who fail to fulfill their obligations, as well as penalties for operators of online e-commerce platforms for medical device transactions who fail to fulfill their obligations.

Chinese regulators initiate anti-monopoly investigation into Alibaba

China’s market regulator, the State Administration for Market Regulation, announced Thursday that based on reports they have launched an investigation into billionaire Jack Ma’s Alibaba Group Holdings for “suspected monopolistic conduct.” The State Administration of Foreign Exchange, China Banking Regulatory Commission, China Securities Regulatory Commission and The People’s Bank of China have also called Alibaba’s financial affiliate Ant Group for supervisory and guidance talks to ensure financial supervision, fair competition and protection of consumers’ interests.

The State Administration for Market Regulation is currently probing Alibaba for violating exclusivity agreements or “choosing one of two” practices that require vendors to sign agreements for exclusive cooperation and prohibits them from selling products on rival platforms. The investigation is part of recent government efforts to prevent monopolistic and anti-competitive practices for improving the socialist market economy system and fostering development. China’s national market regulator released guidelines in November to “prevent and stop monopolistic behaviors” by internet giants such as collecting unnecessary data from consumers, colluding to eliminate small rivals, and making it difficult for users to switch other platforms.

Regulatory officials in November halted Ant Group and Alipay’s initial public offering, which would have otherwise been the largest in the world, just 48 hours before trading was scheduled to begin in Hong Kong and Shanghai. While the Shanghai Stock Exchange gave reasons pertaining to changes in the fintech regulatory environment, many believe that the move came in response to criticism from Jack Ma against the Chinese banking system for their role in halting innovation via policies aimed at containing financial risk.

Alibaba Group has said that it will actively cooperate with the regulators and the company’s business will operate normally for the time being. Similarly, Ant Group has stated that will diligently study the regulatory departments’ requests and comply with the same. If the regulators find against Alibaba, penalties under China’s anti-monopoly law can be up to 10% of the company’s turnover from the previous year.