Useful articles: GDPR and the relationship between clients, contractors/ temporary workers, recruiters and umbrella companies

Published by Alisha McKerron 19 November 2018

I found the two articles mentioned below interesting reads, because they each ask a similar question in relation to a specific situation. My article, When is a Data Processing Contract Required? is more general. Also interesting, is the practical implications of being a data processor which I omitted to discuss in my article, GDPR is Coming: 7 Steps Processors Need to Take to be Compliant.  I chose to highlight the regulatory position.

The first article, Is a Contractor a Processor Under GDPR?, written by John Thompson asks the question Is a Contractor a Processor under GDPR? Unable to find any official guidance and having considered both sides of the argument, John concludes that contractors are data processors.

The second article,What May Compliance With The GDPR Require of Entities Who Use Temporary Workers From Recruitment Agency to Process Personal Data? written by Emmanuel Lazarididis, supports the first article. The second article looks more closely at the relationship between clients, recruitment agencies, umbrella companies and their workers and concludes that an umbrella company is a data processor and as such should sign a data processing agreement.

What I Learnt at The November 2018 Executive Leader Network Privacy/GDPR Conference in Reading

Published by Alisha McKerron on 15 November 2018

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My head was swirling with data privacy thoughts, when I left the Executive Leader Network Conference in Reading, last week. Not bad considering, I had arrived with an impenetrable head cold, which showed no signs of easing as the afternoon progressed.

By midmorning I had listened to three talks and a panel discussion with another two talks squeezed in before lunch. By the end of the day, my final tally was 9 talks and one panel debate. I certainly got my money’s worth, but would I remember all that I had learnt? Not without making some notes!

Below are the topics of each talk I attended and some information about the talks.

  1. What makes an ideal DPO?

I learnt from Christel Cao-Delebarre, that data subjects are lodging more complaints than ever. Although a company may not be obliged to appoint a data protection Officer (“DPO”), companies should consider volunteering one. Why? Because a DPO is a key contributor to transformative corporate changes, a key partner for end-user satisfaction and a key representative of the company for the EU and for non EU supervisory authorities. 

I agree with this approach, although I wonder if it would be prudent to give the office the title of Privacy Manager, in the voluntary instance. This would distinguish the office from a mandatory appointment, and allow for flexible compliance with DPO, Data Protection Regulations (“GDPR”).

When considering whether a DPO is mandatory, we should bear in mind that processing employee data or financial data is excluded from the test.

  1. The Ultimate Guide to New ePrivacy Regulations: Cookie Consent, DNT, and Online Tracking Technologies

Next up was Elliot Cranmer to talk about up- coming changes to the Privacy and Electronic Communications Regulations (“PECR”), which regulates the use of cookies in the UK.

PECR is due to be replaced by a European Regulation (“ePR) but no one knows when exactly this will happen. Although Parliament has agreed its version, the Council of Ministers has yet to agree theirs. It may be some time before the Commission, Parliament and the Council of Ministers will be able to enter a trialogue debate to agree a final version.

PECR requires for use of cookies: i) the provision of clear and comprehensive information about any cookies being used; and ii) consent to store a cookie on the users or subscriber’s device. These requirements fall away for cookies that are essential to provide an online service at someone’s request (e.g. to remember what’s in their online basket, or to ensure security in online banking).

GDPR has necessitated a higher standard of disclosure and consent in relation to cookies. Data subject are being made aware of cookies via banners. A common approach now is to categorise cookies and get consent for each, while also allowing easy withdrawal of consent.

The new ePR will apply to machine communications. It will extend the requirement of obtaining consent for storing cookies, to the processing of personal data used for tracking. It will address issues around ad-blocking and Wi-Fi location tracking. It will shift the focus from website cookie banners to users’ browser settings.

It will also tighten the rules on marketing, with the default position being that all marketing to individuals (whether a private individual (B2C) or an employee (B2B)) by phone, text or email must be opt-in. (At the moment direct marketing emails can be sent to employees working for corporates (B2B) or public authorities without consent, on an opt-out basis). In other words the new law will align B2B marketing with B2C.

The advertising industry is up in arms. If adverts are blocked because consent to tracking has been denied, it will strip European publishers of the right to monetize their content through advertising. The only other way publishers will be able to monetize content is to start charging consumers. Some publishers have begun doing this. Others have made their websites inaccessible to the EU.

The Interactive Advertising Bureau (“IAB”) is lobbying for an inclusion of a legitimate basis as a way round consent.

  1. Panel Discussion

GDPR is Here to Stay

According to the panel one of the biggest mistake’s companies are making, is to underestimate the ongoing importance of GDPR. GDPR policies need to become part of businesses’ DNA.

ePR and Consent

 At first, I found the comments the panel were making about consent, contradictory: either is was needed for direct marketing, or it was not. Once I realised the importance of distinguishing between businesses and individuals and which channel of marketing is being used (mail/ sms, phone/fax or post) things became clearer. So that you don’t fall into this trap the position is: consent is not required for marketing emails or texts to businesses (i.e. first name.last name@company.com), so long as there is a lawful basis together with an opt out. (Apparently, it is good practice to keep a ‘do not email or text’ list of any companies that object). Consent is required for marketing emails or texts to individuals although there are some exceptions (see below).

If the ePR comes into effect, consent will be required for the processing of electronic personal data used for tracking. This requirement will have a catastrophic effect on the advertising industry because it relies on the processing of this type of personal data. The Direct Marketing Association (“DMA”) is lobbying hard to have an exception included.

Direct Marketing Emails

The DMA has had past success in lobbying for changes in draft laws. It managed to get an exception to the rule that individuals must have given their consent to received direct marketing emails. If the individual is a previous customer and the marketing is in relation to a similar product, consent is not required, because there is a ‘soft opt-in.

It is also important to distinguish between informative emails and advertising emails. I am not persuaded by the argument that no consent is required in the instance of an informative email which has a bit of advertising in it.

Legitimate Interest and Marketing

If e-privacy laws do not require consent, legitimate interests may be relied on. For example, direct marketing by post. This seems to have been lost in translation post GDPR.

 Data Subjects Right to be Informed

Data subjects have the right to be informed via a privacy notice whenever their personal data is being processed. This is still the case, if personal data is sourced from the public domain or if public personal data is aggregated with private personal data. This is especially relevant to recruitment agencies.

 Data Processors and Data Controllers

The role of data processors and data controllers is more equivalent. It is important to always be considering the risks associated with processing personal data and potential harm to data subjects.

Provenance of Personal Data

Companies must know the provenance of third-party personal data i.e. where it comes from, how it was collected, the legal basis for collection, whether the data subjects have been correctly informed etc. Consider whether the communication made at collection is sufficient further down the line. If data has been improperly collected, it may damage a company’s branding. Sellers of personal data need to be careful who they sell to, for example Life Cycle Marketing (Mother and Baby) Limited was fined for selling personal data to a political party.

  1. Email Marketing in a Post – GDPR World

 Jenna Tiffany took us back in time, when the first Nokia mobile phone came on the market. She pointed out how much has changed since then. She observed, that the GPPR journey thus far has been an emotional one, beginning with denial, and ending with acceptance with everything in between.

What we should not lose sight of, is the consumers desire to protect their personal data and the importance of building up a relationship of trust. Some companies have understood this better than others and been more successful in rolling out their new GDPR policies. They have used this to differentiate themselves from their competitors.

We should view the changes in privacy law as a wonderful marketing opportunity to strengthen our relationship with our customers.

  1. Privacy, Compliance in a Fast-Changing Landscape

Ivana Bartoletti extolled the virtues of good governance with sound data protection policies. For example, policies which will trigger Data Protection Impact Assessments (DPIA) analysis. The policies should set out how DPIA’s should be done and by whom and how frequently they should be reviewed. Ivana suggested preparing a matrix of criteria using WP248 as a source. Only two criteria need to be met. Ivana discussed other tools including data minimisation (do I really need this data?), threat analysis (what is the harm on the data subject?), privacy by design and default and procedures in place for data breaches.

  1. Life after GDPR….. Accountability Transparency and What is Still to Come

Towards the end of the lunch break, Christine Andrew gave us 6 tips about life after GDPR.

  • Don’t Panic: Not everyone is GDPR compliant
  • Check Breach Management

The Information Commission (“ICO”) is only really concerned with systematic breaches rather than individual breaches. If ICO does not respond quickly it is almost always good news. Complaints have increases and so ICO has had to prioritise more severe breaches over less severe. What is important is that businesses are able to show that they have clear internal processes to pick up every breach, no matter how minor. Look at ICO’s webcast on How to Report Data Breaches

  • Subject Access Reports

 Subject accesses reports are nothing new and are best dealt with by engaging with the data subject to determine their motivation. Are they a vexatious employee or do they no longer want to receive direct marketing?

  • Make sure you know where all personal data is processed
  • Audit third parties

Companies should ensure that third party processors which are processing personal data on their behalf, have been audited. Check that there is continual data mapping and that correct records of processing are being kept.

  • Rate yourself

 Use ICO’s Guide to Audits to understand what  evidence (existence of committees, minutes, risk register, PIA’s, staff training, art 30 records etc)  CO will be looking for and what controls they would expect to see in place.

  1. Creating a Culture of Privacy Compliance

Ben Westwood spoke about creating a culture within a business of privacy compliance. The first thing a business needs to do is set about defining its mission. ICO’s mission statement is a useful precedent to look at. Next is getting everyone on board from senior management right down to a single contact person. Seeking endorsement and support is crucial. Proactive engagement is necessary. DPO’s should seek out an audience via privacy events, training, information lunches and competitions. Adopting an open-door policy and appointing brand ambassadors should help too. They must introduce a methods of demonstrating compliance, for example how many subject access requests the business has dealt with. A record of data processing is essential. ICO’s template is a useful tool. Another very useful tool is the guide created by the American Institute of CPAs and the Canadian Institute of Accountants with help from ISACA. It is based on the Generally Accepted Privacy Principles (GAPP) and aims to assist organizations in strengthening their privacy policies, procedures and practices.

  1. Breach Markers: How to be Certain that Your Data Has Been Breached and Know Where the Breach Originated

Jeremy Hendy extolled the virtues of breach markers particularly when a business’s personal data sits on a third party server outside the businesses control.

  1. Can Email Marketing Survive GDPR?

Dean Seddon went to great lengths to correct the misconception that direct marketing emails can no longer be used without consent. This is only the case in relation to B2C direct marketing emails. PECR does not require consent for B2B direct marketing emails. Legitimate basis can be relied on instead so long as there is an opt out. ICO’s guide explains when this legitimate interest may be relied on.

Direct marketing’s biggest challenge is consumers ire and the work of trolls. Consumers may have forgotten that they opted in to direct marketing emails or may not have fully understood what they were consenting to. Full disclosure is essential. It’s also important to develop a policy on how to handle complaints to prevent brand damage further down the line.

  1. Defence Against Malicious Data Subject Requests.

Shane Reed explained the various steps business should take upon receipt of a data subject request. The first step is to alert all the various departments that may be involved and complete an office 365 search in share point. Next identity of the data subject. Bear in mind that you have 30 days to respond. If business have a clear data retention policy designed to minimise personal data this should reduce the amount of personal data that may need to be handed-over.

 

 

 

 

 

 

 

 

 

 

 

 

 

When is a Data Processing Contract Required?

Published  by Alisha McKerron on 3 October 2018

In today’s privacy climate, it is easy for companies to rush into signing data processing contracts with their service providers, for a variety of reasons. The most obvious reason is that, no one wants to breach the General Data Protection Regulation (“GDPR”) (art 28(3)) and Data Protection Act 2018 (s 59(5)), which provide that processing done by a processor on your behalf (as data controller) must be governed by a written contract between you and the data processor. The new sanctions under GDPR for breaches are too severe to be ignored.

Another reason for companies rushing to sign is an increased likelihood of breaches; the new definition of processing is all encompassing, and the definition of personal data is much wider. The new regime also requires that certain  mandatory provisions be present in data processing contracts, which has meant that old data processing contracts might need to be updated by new ones, if not compliant with the new provisions.

However, is it always necessary to sign data processing contracts? Yes, service providers may have historically preferred to be classified as data processors as opposed to data controllers, in order to benefit from the less onerous obligations imposed on them by pre-GDPR laws. However, since the GDPR is far stricter on data processors, this argument no longer makes sense – and so it’s now necessary to consider whether your service providers really are data processors under this new law. The question is best answered with firstly a clear understanding of GDPR and secondly an understanding of the service being provided.

Understanding GDPR

Starting with GDPR, the official guide from the Information Commissioner’s Office (ICO) (the relevant Supervisory Authority for the UK), although not up to date, is helpful in explaining the difference between the two roles and provides various examples of service providers including a market research company, a payment service company, a mail delivery company, solicitors, accountants, IT services  (a vehicle tracking company) and a cloud provider (a storage service provider). In its examples its concludes that only one out of the seven is a data processor: the storage service provider; five out of seven are data controllers: the market research company, the payment service company, solicitors, accountants and the vehicle tracking company; and the mail delivery service is neither a data controller or data processor.

What is interesting is that, if you asked a person with no knowledge of GDPR, to classify each provider as either a data controller or a data processor, they would probably guess that the storage service provider is the data controller and all the rest are data processors! This is because, it seems logical to assume that the first six service provider will be processing personal data on behalf of their clients, and therefore are data processors, and that the storage service provider, which stores and seemingly controls the data, must therefore be a data controller.

IT service providers can be difficult to classify correctly. This is because of the technical complexity involved, and different ways the information technology services are delivered e.g. on-premises (where software is run on your premises) or off-premises (where software is run on the service provider’s servers, which aren’t under your control). There are also many different IT services providers such as hosting service providers, managed service providers, storage service providers and application service providers to name a few.

The only way to come up with the correct answers is to carefully consider the GDPR definitions.

“ ’processor’ means a natural or legal person,……….. which processes personal data on behalf of the controller;” art 4(8) of GDPR

“ ‘controller’ means the natural or legal person,……….. which, alone or jointly with others, determines the purposes and means of the processing of personal data;”  art 4(7)  of GDPR

Every instance needs to be considered on its own, for example ICO concludes that a vehicle tracking provider is a data controller, which might lead you to conclude that a video conferencing service provider is too, when it is not.

A vehicle-tracking provider installs hardware (devices in cars) and monitors them (on its servers) so that cars can be recovered if they go missing. Although the service it provides, is to track and send back location data in certain circumstances, the vehicle-tracking provider is a data controller in its own right. This is because it has sufficient freedom to use its expertise to decide which information to collect about cars (and their drivers) and how to analyse them for its own purpose i.e. making decisions in relation to purpose and means.

A video conferencing service provider installs hardware (screens and computers) for example in your conferencing suites and uses its own software and technical expertise to allow people to videoconference with each other. Unlike the vehicle tracking provider there is not the same freedom to decide which information to collect and use. This is because all the personal data the service provider holds in connection with the service, would be provided by yourselves- therefore the video conferencing provider has no scope to use the data for any of its own purposes. Unlike a vehicle tracking provider, the video conferencing provider is a data processor.

What about IT Managed Service Providers (MSP’s) which retains responsibility for the functionality of IT services and equipment and allow you to benefit from predictable pricing and the ability to focus on core business concerns rather than IT management chores?

Although a MSP may decide such matters as what IT system to use to collect personal data, and how to store, secure, and transfer it, (all seemingly control functions)  these are technical decisions which a data processor is free to make. You would retain exclusive control over the purpose for which the data is processed and the manner in which the processing takes place. As in the example above, all the personal data the MSP holds in connection with the service would be provided by you. Accordingly, the MSP is a data processor.

There are many other examples that can be considered; so long as one is constantly considering who exercises overall control over the ‘why’ and the ‘how’ of a data processing, the distinction between the roles should become clear.

Understanding the services being provided

With regards the second leg namely understanding the services being provided, this is largely dependent on the relationship you have with our service providers. Where service contracts have been agreed some time ago, this can be a real challenge; memories fade, personal may have moved on to another department or company and the service provider is not incentivised to co-operate fully since it has a service contract in place.  Accordingly, it is important not to neglect the relationship you have with your service providers.

It is also useful to bear in mind, uncertainty about each party’s role can not only result in unnecessary data processing contracts, but more worryingly, prevents each party from determining where responsibility lies. This is essential to know, for example in the event of personal data being hacked.

Conclusion

In summary, in today’s privacy climate, one should not rush into signing data processing contracts or to update existing data processing agreements without a good understanding of GDPR and an understanding of how the delivery of services impacts the collection and processing of personal data. Since this is not so easy to do on one’s own, it seems prudent to make every effort to forge an open and collaborative relationship with one’s service providers.