UK government plans to revamp holiday pay calculation for part-year workers
Out-Law Analysis | 12 Apr 2022 | 2:53 pm | 5 min. read
In an atmosphere of rising energy prices and continued warnings from the Intergovernmental Panel on Climate Change (IPCC) about the urgent need for immediate action on the environment, the pressure is on to deliver a green agenda.
It is essential that both the public and private sectors work together to drive through the innovation and green technology required to achieve the net zero goals set by governments and companies around the world.
‘Green technology’ refers to environment friendly or clean technology, as well as products and innovative devices used in environmental science, green chemistry, monitoring, promoting sustainability and conserving the environment. Technologies that might not traditionally be considered to be ‘green’ can become so when combined with other technologies and this is where collaboration can come into its own.
However, collaboration brings both risk and reward. There are many benefits to collaborating on green technology, but for the partnership to be a success collaborators must navigate significant legal and practical issues.
Net zero is not just a regulatory or legal goal, it is a goal to stay up to date and relatable. The Covid-19 pandemic has accelerated collaborative working practices, in particular in the medtech and pharma fields, increasing sharing and open access amongst competitors and supply chains, and this model is being applied in climate change too.
Examples have included Unilever’s collaboration with carbon recycling company LanzaTech and green tech-based chemicals company India Glycols, to produce d a surfactant used in many cleaning products using recycled carbon.
Supermarket giant Tesco partnered with the World Wildlife Fund to undertake joint research on what supermarket shoppers want in terms of food sourced in a responsible, sustainable way, and introduced a ‘sustainable basket metric’ which measures the environmental cost of the retailer’s range with an aim to create affordable, healthy, sustainable food.
Construction company Balfour Beatty has worked with two universities and a publishing company to create a carbon calculator that calculates the amount of carbon generated by design choices, to help drive down the built environment’s carbon emissions.
There are also a growing number of more informal collaborations, for example ‘hackathons’ which bring people together to come up with solutions to known problems.
Competition law issues may arise when the organisations involved in collaboration are actual or potential competitors. It is not always clear when certain organisations or businesses would be considered competitors or potential competitors for competition law purposes, particularly in new, complex, or rapidly changing markets. This means that organisations contemplating collaborations should seek competition law advice to ensure compliance and mitigate potential antitrust risk. Breaching competition law can expose organisations to substantial risks, including investigations, substantial monetary penalties, contractual invalidity, exposure to damages, possible disqualification of company directors or even criminal sanctions.
Sustainability-focused collaboration, such as ‘sustainability agreements’, as well as other forms of collaboration – including the joint development of new technology – are governed by specific competition rules and related guidance both in the UK and across the EU. These rules are currently undergoing review and reform in both jurisdictions. Organisations planning to engage in collaboration projects should be mindful of the upcoming changes, including any relevant differences between the UK and EU regimes.
Not all collaborations will be the right fit for your organisation or its strategic plans. It is essential that the parties have the same purpose, vision and goal for the collaboration and that expectations and requirements are aligned.
It is important to do due diligence on the other collaborators, just as in any other business relationship. Commitment to the project, transparency, trust and healthy relationships will be the key to successful collaboration.
While there are standardised collaboration agreements out there, there is scope to be creative with the legal terms and there is no ‘one size fits all’ approach. Legal advisers should be involved early, and at a minimum a non-disclosure agreement (NDA) should be put in place when collaboration discussions begin. NDAs should be revisited if the collaboration goes ahead, to ensure it works for the wider project.
Once initial discussions have concluded, some form of memorandum of understanding (MOU) or heads of terms should be put together to illustrate the parties’ understanding and expectations prior to the formal legal process.
Even though they are not usually legally binding, it is worth investing the time to ensure that the MOU reflects the agreed core principles, in particular around funding, intellectual property (IP), data and future commercialisation. Moving away from these terms will be much trickier in later negotiations if agreed in the heads.
Including comprehensive confidentiality obligations in the collaboration agreement is important to protect know-how and technology. These provisions should deal with the pre-existing confidential information inputted by the collaboration parties and that generated as part of the project.
Particularly in the UK, it is likely funding will be made available for green innovation. If a collaboration is being funded by a public funding body, there will be a set of funding terms and conditions that must be complied with that sit alongside any collaboration agreement.
These funding terms often include reference to specific terms that must be included or reflected in the collaboration agreement, including in relation to intellectual property ownership and use. Terms relating to IP historically have been fairly benign and rarely grant the funder any specific rights but more prescriptive terms have crept in in recent years.
If a public funder is involved, ask for the funding terms upfront to determine how they may impact on the proposed collaboration arrangements.
IP is likely to be an important area of the collaboration, particularly in the digital space, and parties to a collaboration should consider issues such as copyright, patents, rights in confidential information and know-how, design and database rights, and trade marks.
Both background and foreground IP will come into play in a collaboration. Background – pre-existing or independently generated IP – may be involved if it is relevant or necessary to the project, while foreground IP is generated through the project. Ownership and usage terms for both should be clearly defined in any agreement.
Granting express rights to commercialise technology developed as part of the collaboration may be appropriate in some collaborations, particularly where input is more equal. These rights could be split out between the parties by field of use or territory.
However, in many circumstances granting exploitation rights to all parties is inappropriate and other more creative incentives for collaboration could be included, such as royalty share arrangements, licensing agreements, or exclusive access to the technology for collaborating parties.
Data also needs to be considered as it can be commercialised and does not fit neatly into the “IP” box. The ability to be able to use, analyse and share data can be agreed contractually and can be highly valuable and it is important to ensure collaboration agreements deal separately with how data generated during projects can and cannot be used, shared and disclosed by the parties.
Once the contract is signed and the collaboration is underway, it is important as with other commercial arrangements to closely manage and monitor the partnership to ensure success. A good reporting and governance structure is important to achieve this.
It is also important to determine during the agreement phase what will happen on termination of the collaboration either when it runs its course or prematurely or if a collaboration partner decides to leave.
Breaking up or terminating a collaboration can be costly and so partners are likely to want to find ways to resolve issues early and through appropriate dispute resolution procedures before pulling the plug entirely.
Agreements should specify what will happen to the ownership of IP generated and any IP licences granted in the event of termination or an early leaver and ensure the NDA provisions continue past the term.
It is also important to consider processes for substituting a replacement collaborator, if appropriate.
Additionally, as green technology becomes more commonplace it is likely to be subject to more regulation in the future. Collaboration agreements extending to commercialisation should consider this, and an individual appointed to be responsible for regulatory compliance.
While collaboration on green technology may involve a significant amount of planning, agreements and compliance issues, it is also certain that the rewards from a successful partnership can be significant in an arena which is only going to grow.
Co-written by Bella Phillips of Pinsent Masons
20 Jan 2022
08 Dec 2021
UK government plans to revamp holiday pay calculation for part-year workers