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Poland’s Bierc Siwik & Partners law firm (BS&P) has successfully represented the Polish Association of Construction Employers in appeal proceedings before Poland’s National Chamber of Appeals (KIO) regarding a tender for “Year-round, comprehensive maintenance in the ‘maintain standard’ segment of the a2 motorway modla-dabie from km 257 + 560 to 303 + 145 with all its elements.”

According to BS&P, in the judgment announced on February 15, 2016, the KIO upheld the claim filed by BS&P and ordered the contracting authority (the General Directorate for National Roads and Motorways – Division in Poznan) to change the Terms of Reference by — in particular — “clarifying the description and method of evaluation of the tenders for the qualitative criterion of drawing up a ‘Concept of operations.’

The BS&P team advising the Polish Association of Construction Employers was led by Managing Partner Robert Siwik, who said: “The judgment has precedential meaning, because it is the first ruling of the KIO upholding a successful challenge to the provisions of the Terms of Reference (SIWZ) concerning principles of description and assessments of concepts prepared by the contractors in frames of offers the concept of activities (methodology, technical offer) which is very important for contractors from the construction industry and infrastructure.”

The Polish Association of Construction Industry Employers consisted of more than 80 companies, including many of the largest construction companies in the country.

The recent judgement of the European Court of Human Rights (“ECHR”) in the B?rbulescu v. Romania case, issued on 12 January 2016 (“ECHR Decision”), stirred significant debates regarding the alleged “new guidelines” for determining a fair balance between (i) employees’ right to respect for their private life and correspondence in professional context / at work and (ii) employers’ interests.

While headlines tended to distort the gist of the ECHR Decision, by not fully considering its particular factual circumstances, a prudent approach mandates a careful analysis of its impact on employers’ conduct and actions on employee monitoring. This is especially advisable in the context of the expected EU General Data Protection Regulation and considering also that the ECHR Decision does not perform an analysis of applicable data protection legislation to the facts.

1. Background

The case originated when Mr B?rbulescu (“Applicant”) filed an application with the ECHR (after having exhausted the available domestic remedies), alleging that his employer’s decision to terminate his employment contract had been based on a breach of his right to respect for his private life and correspondence and that the domestic courts had failed to protect his right. 

The Applicant had created an Yahoo Messenger account at his employer’s request for the purpose of dealing with client enquiries. In 2007, the employer informed the Applicant that his Yahoo Messenger communications had been monitored for a limited period of time and that the records had shown that he had used the Internet for personal purposes, contrary to internal regulations. After the Applicant’s denial of this accusation, the Applicant was presented with a transcript of his communications using Yahoo Messenger, which included certain personal matters. 

On this basis, the employer terminated the Applicant’s employment contract for breach of the company’s internal regulations.

The ECHR ruled against the Applicant and noted, among others, that the employer’s monitoring was limited in scope and proportionate, as well as legitimate, as being performed in belief that the account only contained professional messages, based on the Applicant’s denial of having used it for personal purposes.

2. What does the ECHR Decision bring new?

The ECHR Decision is a good step forward towards a balanced approach where employers’ interests are equally considered, but also as a more articulate reminder of the need for all organizations to have in place clear policies regulating the use and monitoring of the Internet and other various systems made available to their employees for professional purposes. The ECHR Decision must not be regarded as granting an absolute right of the employers to monitor their employees’ correspondence at work, but may be used as reference point. There are cases in which such monitoring is justified and others when it is not. The ECHR Decision is rather a reminder that employers must ensure that (i) appropriate and well documented policies on the matter are in place and such are duly acknowledged by the employees, as well as (ii) appropriate notice / warning must be given by an employer before engaging in any legitimate monitoring of its employees’ Internet/systems use (providing a detailed notice being advisable).

2.1. Obligations of the employer

Under the Romanian Labour Code , while employers have the right to exercise control over the employees’ manner of performing work, they also have the obligation to ensure the confidentiality of their personal data. As the provisions of the Romanian Labour Code are more general in nature with regard to these obligations, the ECHR Decision has the merit to re-state such obligations using more concrete terms, as detailed in Section 3 (The holding of the ECHR decision) below.

2.2. Data privacy

Under the Personal Data Protection Law2, a personal data controller shall process personal data of a data subject only if the data subject consents to the processing. Additionally, the data subject must be duly informed about the processing prior to the commencement of such processing. While the ECHR Decision did not specifically rule on the unlawful processing of personal data, we note that the provisions of the Personal Data Protection Law require the consent of the employee and his/her prior notification about the processing. In this case, it is unclear if the Applicant had been duly notified about his monitoring in advance.

3. The holding of the ECHR Decision

ECHR Decision crystalizes the boundaries of the right to respect employees’ private life while checking the manner in which they complete their professional tasks, as follows:

• access to the Applicant professional Yahoo Messenger’s account had been legitimate based on the assumption that the information in question had been strictly related to the professional activities; 
• it is reasonable for an employer to verify that the employees are completing their professional tasks during working hours;
• the employer’s monitoring was limited in scope and proportionate, as, except for communications included in the professional Yahoo Messenger account, no other data and documents that were stored on his computer were examined by the employer. 

4. Points to consider

As a timely reminder, if an employer decides to engage in the monitoring of its employees’ use IT systems and Internet access, to check whether its employees are performing their professional tasks during the working hours, the employer should:

• carry out a prior assessment to examine whether employee monitoring is necessary and justified; if so, clearly document the reasons for such monitoring (in the policy mentioned below);
• have in place a clear, comprehensive and specific policy on the use of the employer’s IT systems and Internet access; such policy should fully explain how the IT systems and Internet may be used, how the monitoring is conducted, how information obtained thorough monitoring may be used, who has access to the information, etc. The possibility of imposing an absolute ban on Internet access for personal use is still debatable, however, certain clear rules on the matter should be documented (such as strict limits to personal use, eg during lunch / other breaks);
• ensure employees are fully aware of such policy – it being communicated to them (ideally under signature of acknowledgment), including about the enforcement and the consequences (including on the disciplinary front) of non-compliance with such policy;
• ensure proper and detailed prior notice is given to any employee before commencing any actual monitoring of his/her professional activity, within the lines of the policy;
• ensure that any monitoring activity is limited in scope and proportionate.

In conclusion, any such actions may potentially trigger various data privacy, employment and human rights implications. Thus, our recommendation is that employers seek legal advice to have such policies, which include employee monitoring, drafted and implemented in full accordance with the law.

By Monica Georgiadis, Partner, and Ana-Maria Andronic, Head of Intellectual Property & Technology, DLA Piper

Hogan Lovells has announced what it calls “two significant victories” in the High Court in the ongoing case against Sergei Pugachev, which was commenced by the Deposit Insurance Agency (DIA) in Russia in December 2013 after he was accused of helping himself to over USD 2 billion from Mezhprombank, while allegedly controlling and beneficially owning it.

Civil proceedings were subsequently initiated against Pugachev in England in July 2014. At the same time, an injunction freezing Pugachev’s worldwide assets up to the value of GBP 1.17 billion, and requiring him to disclose all his assets worth GBP 10,000 or more, was granted by the High Court of Justice on July 11, 2014 in support of the proceedings in Russia.

The DIA obtained judgment against Pugachev in Russia in April 2015 in the amount of over USD 1 billion. Following the dismissal of two separate appeals by Pugachev, Hogan Lovells has now initiated further proceedings to have the judgment enforced in the UK.  

In the first of the two victories announced last week, Pugachev was sentenced to two years in prison after being found guilty on 12 counts of contempt of court for fleeing to France following orders to disclose his assets, and despite an injunction prohibiting him from leaving the UK and a warrant for his arrest. According to Hogan Lovells, “this is the maximum sentence available for contempt of court, reflecting the seriousness and scale of Mr Pugachev’s wrongdoing.”

Hogan Lovells Partner Michael Roberts, who led the firm’s team representing the DIA, said: “The sentence imposed on Mr. Pugachev today – the maximum available for contempt of court – reinforces the seriousness of Mr. Pugachev’s wrongdoing. The Judge found him guilty of a staggering and quite possibly unprecedented number and range of allegations of contempt of court, confirming that has repeatedly lied to the Court, breached the Court’s orders and cannot be trusted. It is an important step forward in the DIA’s on-going efforts to recover assets for the Bank’s creditors.”

Justice Rose, who delivered the judgment finding Pugachev to be guilty in the High Court earlier this week, described Pugachev’s breaches of numerous orders made by the English Court, including the worldwide freezing injunction granted in July 2014, as “egregious”, “serious” and “deliberate”.  Hogan Lovells reports that the judgment also conclusively establishes that Pugachev “has repeatedly lied and cannot be trusted,” and that the Judge concluded by saying that she could not “safely rely on any evidence he gave,” variously describing it as “impossible to believe” and “wholly unsatisfactory.”

In connection with the DIA’s concerns that Pugachev failed properly to disclose the whereabouts of the hundreds of millions of dollars extracted from Mezhprombank prior to its collapse in 2010, the Judge accepted that “the trail provided by Mr Pugachev goes cold.” The Judge also found that Pugachev’s eldest son, Victor, had been used as a nominee in a dishonest attempt to conceal Pugachev’s beneficial ownership of assets worth at least USD 150 million. 

Pugachev has the opportunity to reduce the sentence imposed on him if he purges his contempt by complying with the Court’s orders. If he refuses to purge his contempt or serve his prison sentence, and instead chooses to remain a fugitive from justice, the English Court will be able to debar Pugachev from participating in proceedings in this jurisdiction and he will be imprisoned as and when he comes back to England. Pugachev has previously said that he intends to return once his legal difficulties are resolved, and had been living in London for several years with his family until he fled to France last summer in breach of a court-imposed travel restriction. Pugachev claimed that the reason he fled was because he feared for his safety in England, but the Judge said that she was “fully satisfied that there was no link between his fears for his safety and his decision to leave England” and that “his explanation as to why he felt safer in France than in England does not bear any scrutiny.”  

In a separate judgment, the High Court of Justice dismissed the New Zealand trustees’ attempts to set aside the ground-breaking judgment made by the English Court of Appeal last year which froze assets in discretionary trusts disclosed by Pugachev (pursuant to a Court Order, as reported by CEE Legal Matters on March 2, 2015), including valuable London real estate. The Court found that there is “a very good case” for saying that the assets within the trust structures are in fact under Pugachev’s control.  

The Judge comprehensively rejected the trustees’ application, stressing that a number of the allegations made were “misconceived” and/or “should not have been made.”  He also found that, unless the injunction is maintained, there is “a very serious risk” that the trustees will allow Pugachev to dissipate the trust assets.

According to Hogan Lovells, “today’s decisions are both significant steps forward in the DIA’s on-going efforts to trace and recover assets for the benefit of the creditors of Mezhprombank, who are the victims of Mr Pugachev’s fraud. The DIA’s judgment against Mr Pugachev, finding him liable in the amount of RUR 75.6 billion, has now been upheld by three appellate courts in Russia. The DIA is moving forward with its steps to enforce the judgment against Mr Pugachev’s assets in Europe.”

The Hogan Lovells team includes Partners Michael Roberts and Rebecca Wales in London and Partner Alexei Dudko in Moscow.

On February 1, 2016, Ewa Kurowska-Tober, the former head of Linklaters’ TMT/IP practice, joined DLA Piper in Warsaw as Partner and Head of the Intellectual Property and Technology department.

Kurowska-Tober is an attorney-at-law with over 15 years of professional experience in advising telecommunications, media, and technology sector clients on a variety of M&A and private equity transactions. She specializes in IP law, with a focus on copyrights, trademarks, unfair competition, data privacy and data protection. She advises media and technology companies on IT and Internet law, e-commerce, broadcasting, and distribution contracts, as well as on licensing agreements and agreements for the implementation and maintenance of IT systems.

Prior to joining DLA Piper, Kurowska-Tober spent almost 8 years with Linklaters, and before that another 7 and a half with Salans. She received her Masters’ of Laws in 1999 from the University of Warsaw.

In August 2015 Kurowska-Tober co-authored an article for the CEE Legal Matters magazine on the significance of recent amendments to the Polish Act on the Protection of Personal Data.

Clifford Chance’s Prague Real Estate team has advised Atrium European Real Estate on the successful sale of a portfolio of retail assets in the Czech Republic to a private client account managed by the Palmer Capital real estate investment management company. White & Case advised Palmer Capital on the deal.

The sale by Atrium, undertaken as part of the rebalancing of its Czech portfolio, included the disposal of ten of its non-strategic assets. The asset value of the sale exceeded EUR 100 million.

Encompassing a total lettable area of approximately 86,200 square meters, the portfolio of retail assets includes eight hypermarkets and two associated retail parks located in Prague and seven other cities throughout the Czech Republic. The retail parks are comprised of smaller format retail properties anchored by Albert hypermarkets (AHOLD) with other reputable local and international brands making up the catalogue of tenants, including dm-drogerie, Takko, Deichmann, and Sportisimo. 

Josip Kardun, CEO of Atrium Group, said the sale of the portfolio marked an important milestone in the Atrium Group’s evolution and continued the process of divesting legacy non-strategic assets in the Czech Republic. “It also represents another significant step forward in our strategy of reweighting our portfolio and income towards well-established, dominant shopping centres, where we see greater opportunities to create value,” Kardun said. 

Clifford Chance also advised Atrium on its 2014 acquisition of the Atrium Palac shopping center in Pardubice, in the Czech Republic (as reported by CEE Legal Matters on November 26, 2014) and its 2011 acquisition of the Atrium Flora in Prague, as well as several disposal transactions of non-strategic assets or portfolios of assets. 

The Clifford Chance team advising on the transaction was led by the Prague office’s Head of Real Estate Emil Holub, who was primarily supported by Associate Milan Rakosnik and Junior Associate Eliska Kadlckova.

The White & Case Prague team advising Palmer Capital consisted of Partner Petr Panek, the Head of the firm’s CEE Real Estate practice, along with Local Partners Vaclav Kubr and Jan Linda.

AstapovLawyers International Law Group has agreed to act as legal advisor for the Kyiv Chess Federation in 2016. On February 11, 2016, AstapovLawyers Managing Partner Andrey Astapov signed the Memorandum of Cooperation with the Kyiv Chess Federation, represented by President Pavel Kufturev.

According to a statement released by AstapovLawyers, “cooperation with the Federation will be realized in the form of GR-consulting, and also in the development by AL leading lawyers [of] necessary regulatory frameworks.”

Poland’s Patpol law firm has announced that Izabella Dudek-Urbanowicz was elected as Managing Director of the firm at the beginning of February, 2016. Dudek-Urbanowicz has headed the firm’s Trademark and Industrial Design Department since April, 2013, and the firm describes her as “an experienced patent attorney and a capable team leader with good managerial skills.”

Patpol is celebrating its 50th anniversary this year, and a statement released by the firm declares that Dudek-Urbanowicz’s “first important task” will be “maintaining and strengthening the position of the firm on the domestic and international market.”

Dudek-Urbanowicz began her career with almost 10 years as a Trademark Attorney at Baker & McKenzie before joining Patpol in November, 2008.

Wolf Theiss has advised Union Investment on the “Aqua” real estate deal, involving its acquisition of the Florido Tower and Solaris office buildings in Vienna from Amundi Real Estate. Schoenherr advised Amundi on the deal.

According to Wolf Theiss, “Union Investment Real Estate GmbH sold its ‘Aqua’ portfolio, consisting of 17 office buildings, encompassing 278,000 square meters of rentable area in six countries in Western Europe.” The portfolio is comprised of buildings from four real estate mutual funds managed by Union Investment. Wolf Theiss reports that 75% of the mega-portfolio, which is valued at over EUR 1 billion, is concentrated in Great Britain, France and Germany.”

According to Wolf Theiss, its mandate “encompassed both the execution of the vendor due diligence for Florido Tower and Solaris and legal advice regarding the share purchase agreement under Austrian law.  

The Wolf Theiss team of advisers consisted of Partner Peter Oberlechner, Karl Binder, and Gabriele Etzl.  

The Schoenherr team was led by Partner Peter Madl, and included Partner Michaela Petritz-Klar, Counsel Stefanie Stegbauer, Attorney at Law Constantin Benes, and Associates Lukas Humaj and Sandra Seldte. 

Image Source: panoramio.com

Hogan Lovells has announced that it advised Empik Media & Fashion on the sale of 100% of the share in both Optimum Distribution CZ&SK s.r.o. and Optimum Distribution Sp. z o.o. to Orbico d o.o. As reported last week, SK&K advised Orbico on the deal.

The Hogan Lovells team consisted of Partner Marek Wroniak, who heads the Warsaw office’s Corporate/M&A department, and Associate Grzegorz Barszcz.

Law No. 1/2016 (“Amendment Law”) for the amendment of Law No. 62/2011 on social dialogue (“Social Dialogue Law”) has been published in the Official Gazette of Romania No. 261 of 14 January 2016 and will come into force on 17 January 2016.

With the aim of facilitating employees’ access to collective labour bargaining agreement (“CLBA”) negotiation (apparently) primarily via union organisations, the Amendment Law enforces new rules (some partly unclear) regarding (i) employee representation in CLBA negotiations, (ii) sectors of activity, (iii) payment of union membership contributions, and (iv) other social dialogue matters (especially related to the public sector).

Without intending to provide an exhaustive overview of the Amendment Law, the below aims to provide an outline of the core changes.

1. Employees’ representation in CLBA negotiations

1.1 Former rules

Under the Social Dialogue Law prior to the Amendment Law, the employees were represented in CLBA negotiations at company level by (i) the legally constituted and representative union or (ii) employees’ representatives, as appropriate (“General Rule”). The Social Dialogue Law also provided guidelines for applying this General Rule, by clarifying how CLBA negotiations take place in the absence of a representative union, namely (A) if there is a (non-representative) union affiliated to a sector representative federation, the federation (at the request and based on the mandate received from the union) together with the employees’ representatives negotiate for the employees, and (B) in case of a union not affiliated to a representative federation or no union whatsoever, the employees’ representative alone negotiate for the employees (“Guideline Provision”).

1.2 New rules: apparent priority to union organisations

Under the Amendment Law, the General Rule was amended in the sense that employees are now represented at company level by:

(i) the legally constituted and representative union; or

(ii) in case of a non-representative union, the federation to which such union is affiliated, subject to such federation being representative in the sector in which the company activates – (apparently) eliminating the employees’ representatives’ involvement in this case; or

(iii) in the absence of any union, the employees’ representatives. 

Thus, based on this new provision, on the general reference to employees being represented for CLBA purposes by union organisations and considering the grounding of / discussions having preceded the Amendment Law, it seems that, in collective negotiation context, union organisations are apparently given priority, gaining a stronger position in front of employees’ representatives. 

1.3 Debatable / unclear provisions

The Amendment Law does not however regulate all possible scenarios (leaving open a legislative gap) and lacks clarity on the cases in which employees’ representatives participate in collective negotiations. This is because the Amendment Law (1) did not repeal, nor amend the Guideline Provision (which is still in full force and effect), but only the General Rule, and (2) does not set forth any express rules for the case of a union existing in the company, however, non-representative and not affiliated to the sector-representative federation.

Consequently, several interpretations may be considered, as follows:

• employees’ representatives may only participate in CLBA negotiations in the absence of any union (be it representative or not); or
• employees’ representatives may participate in CLBA negotiations not only (a) in the absence of any union, but also – as applicable prior to the Amendment Law coming into force – (b) in case there is a non-representative union (in the circumstances mentioned by the Guideline Provision). 

Thus, it is not clear whether the maintaining into force of the Guideline Provision was intentional (as it contradicts the Amendment Law on certain points) and what its actual implications in each particular case are.

2. Establishing the sectors of activity 

The Amendment Law provides new rules on establishing the sectors of activity, by implementing a two phased process under which sectors of activity are (i) established by the National Tripartite Council (a consultative organism, comprising representative union confederations, national-level employer organisations, Government representatives, as well as members from certain public authorities) and afterwards (ii) approved by Government decision. Furthermore, sectors of activity are no longer defined by reference to the main business object of companies (Romanian, CAEN), as the Amendment Law only generally provides that these are sectors of the national economy, without providing any criteria for defining them.

Prior to the Amendment Law, the sectors of activity were expressly defined as comprising areas of activity established based on companies’ main business objects, the exact sectors being provided by Government Decision No. 1260/2011 (“Sectors GD”).

This amendment potentially has implications regarding representativity at sector-level, including in company level collective negotiations, especially during the upcoming transitory period. For example, in lack of a representative union, it is unclear how the federation representative in the sector in which the company activates will be determined – either with reference to the former sectors provided by the Sectors GD or the new ones, not yet established.

Consequently, until a new government decision regarding the new sectors is passed, the approach to sectors of activity (in the sense of still recognising the sectors provided by the Sectors GD or not) is debatable in lack of transitory provisions in the Amendment Law to give some guidance. Thus, the National Tripartite Council should bring more clarity by establishing the new sectors of activity, which might be more balanced as the private sector (via national-level employer organisations) are also involved in the process.

3. Payment of union membership contributions

The Amendment Law provides that, upon the union’s request and subject to the employees’ consent, the employer will withhold and transfer directly to the union the union contribution for their members, on the monthly payroll.

This provision is not quite a novelty, as having also been similarly provided in the past, under the CLBA applicable at national level during 2007-2010 (no longer in force).

While being intended as a practical measure, as such withholding has been debated during the legislative process (as infringing employee rights to receiving their full salary), a safe approach for all parties involved could be to base such withholdings on written and clear consent from union member-employees.  

4. Conclusion

Although the actual consequences of the Amendment Law cannot be clearly predicted at this point – whether achieving its goal of increasing CLBA negotiations or not – it seems that companies in which there is a non-representative union (arguably regardless if there also are any employees representatives) are the ones that need to further investigate their particular situation (depending on their sector of activity, the existence or not of representative federations, the union affiliation etc).  

By Monica Georgiadis, Partner, DLA Piper