The week’s news included; Goldman settles 1MDB case with Malaysia, Landmark Uber drivers employment lawsuit, Virtual witnessing of wills legalised, Companies dodge Covid claim payouts
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- BBC News – What is redundancy, who can be made redundant and what are my rights?
- City A.M. – We can’t tax our way out of the Covid-19 crisis — instead, the chancellor must drive growth
- CNBC– ‘It is going to be brutal’: What to expect as oil and gas majors unveil their second-quarter results
1. CORONAVIRUS VACCINE
The University of Oxford has trialled a coronavirus vaccine and initial results prove it to be safe and effective at triggering an immune response. All participants in the trial made antibodies and T-Cells that fight coronavirus. It is not clear however, if it will protect against Covid-19 adequately across the population. The trial involved 1077 peopleand larger trials will be underway soon. There were no severely harmful side effects although 70% of participants suffered from headaches after taking the vaccine.
The UK government has ordered 100 million doses of the vaccine, but it will likely take another year until the vaccine becomes widely available. Last week’s progress is a positive step but there is still a long way to go. BBC News looks closer at the vaccine trials.
2. GOLDMAN SETTLES 1MDB CASE
Goldman Sachs has reached a $3.9 billion settlement deal with Malaysia over its role in the 1MDB scandal. The scandal saw $4.5 billion stolen from Malaysia’s sovereign wealth fund, depriving the national infrastructure from critical investment. Goldman Sachs bankers helped raise cash for the fund through bond sales alongside financier Jho Low who is still on the run from law enforcement. Goldman gave legitimacy to the project and received $600 million in fees. 17 Goldman Sachs bankers and 2 financiers have been charged with fraud.
The Malaysian government has now recovered the majority of the funds believed to be stolen. Jho Low was one of the primary beneficiaries of the theft. Stolen funds were allegedly used to purchase a private jet, numerous properties, Picasso paintings and even funded the Wolf of Wall Street film. The investment bank hopes to draw a line under the scandal with this settlement. The deal provides a $2.5 billion in cash and a further $1.4 billion in recovered money. US authorities may still take action against Goldman but settling with Malaysia was an important first step forward.
3. LANDMARK UBER CASE
Two ex-Uber drivers have started their landmark lawsuit against the company over the employment classification of drivers. The case, which began in 2016, has now reached the Supreme Court and will be crucial for Uber’s 45,000 UK drivers.
Uber classes drivers as self-employed contractors, meaning they are not entitled to basic employment rights. Former drivers, Yaseen Aslam and James Farrar, claim that drivers are employees and therefore entitled to employment rights. They argue this because Uber exercises substantial control over drivers and are the point of contact for passengers. Uber argues that they are merely an agent and connecting drivers with passengers. They add that drivers have control over the jobs they take and have total freedom to work when they want.
Uber could face a huge compensation bill and additional costs if drivers are classified as employees. If successful, claimants could be entitled to £12,000 in compensation each. Even if a third of their drivers made a claim, this would total £180 million in compensation alone. It is clear why Uber have appealed this case all the way to the Supreme Court. The full ruling is expected in the next few months.
4. VIRTUAL WITNESSING OF WILLS TO BE LEGALISED
From September, wills can legally be witnessed remotely in England and Wales. Under the Wills Act of 1837, two witnesses are required, and they must be physically present. This requirement is to reduce the risk of fraud and/or undue pressure on the testator when they are signing the will. A new statutory instrument will amend this requirement and allow for witnessing via video conference software. Witnesses will be posted wills of the testator and will sign it live on a video conference.
Though this option will be available, the government has stated it should be a last resort. This instrument will have effect until 31 January 2022 but may be extended depending on the need for remote options due to the pandemic. After this time, the Wills Act of 1837 will apply as normal.
5. KOREA FALLS INTO RECESSION
Asia’s fourth largest economy, South Korea, has slumped into recession due to the coronavirus pandemic. South Korea’s economy shrank by 2.9% year on year, driven by the biggest slump in exports in 57 years. Exports account for roughly 40% of the Korean economy but as the world begins to reopen leaders are confident of a bounce back. The Korean government has already pumped over $230 billion into the economy via stimulus packages. Asia’s other economic powerhouses have faced the same challenges. Japan and Singapore both sank into recession this year while China avoided recession but saw the weakest growth in decades.
6. FIRMS DODGING COVID CLAIMS
The UK Financial Conduct Authority has begun its legal action against insurers over their refusal to pay out in business interruption insurance claims. This will be a test case and may pave the way for thousands of claimants. Test cases allow for legal clarity on the point of law as opposed to each claimant bringing individual cases forward. Insurers argue their business interruption insurance does not cover government-imposed lockdowns. The case will focus on the disputed wording of the policies which is preventing policyholders from receiving pay-outs. Roughly 370,000 policyholders are affected by this case while eight major insurers are opposing. These insurers include; Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, Royal & Sun Alliance, and Zurich
Viagogo is refusing to refund customers for cancelled events. The ticket resale website’s terms provide a refund or voucher for 125% for cancelled events only. Postponed events are not eligible for these refunds or vouchers. Events cancelled due to Covid are considered “postponed” by Viagogo so users cannot be refunded, even if organisers had declared them cancelled.
This is not the first time Viagogo has come under fire for questionable practices. The CMA only dropped its lawsuit against Viagogo last September. This lawsuit was over its poor practices such as failing to display seat numbers, and misleading customers about availability.
7. SLACK CLAIMS MICROSOFT COMPETITION BREACH
Messenger platform Slack has filed a complaint over Microsoft’s alleged abuse of dominance by including Microsoft Teams in its Office 365 software. Slack is a messaging and video conference tool designed specifically for work places. The platform claims the automatic integration of Teams into Office 365 gives Microsoft an unfair advantage and makes it more difficult for Slack to market its product. Microsoft Teams saw its usage nearly double to 77 million users in one month when lockdown measures were introduced globally in late March. While Slack also saw user numbers grow to 12.5 million, it claims Microsoft’s practice is illegal and no doubt contributed to its exponential growth. The European Commission will now review the complaint to determine whether antitrust law has been breached. Zoom Video however, is no doubt the king of video conferencing seeing its users rise to 300 million daily users in April. Microsoft argues it holds only 29% of the market and is therefore not dominant.
The Royal Bank of Scotland has officially changed its name to Natwest Group. The name change was announced in February as a means to shake off its legacy as a bailout bank. RBS received a £45 billion bailout from the UK government in 2008 and went into state ownership. The bank is still 62% owned by the UK government.
Additionally, 49,000 of its staff are to work remotely for the remainder of 2020. This decision was taken for the safety and wellbeing of staff. This comes despite a change in government guidance which now encourages employers to bring workers back to the office from August 1. RBS’ decision will no doubt be a huge blow for the many high streets that rely on office workers for income.
9. M&S JOB CUTS
In the latest blow for the ailing high street, Marks and Spencer announced plans to slash 950 jobs. The majority of jobs will be lost in management roles in its head office. Coronavirus lockdown particularly affected Marks and Spencer as despite its online presence, shoppers were less drawn to its more lucrative formal wear.
Overall Marks saw an 84% decline in its sales. Like many retailers however, Marks and Spencer was struggling well before Covid-19 and fell out of the FTSE 100 last year. Chancellor Rishi Sunak said not every job can be saved by the government but with tens of thousands of job cuts across our high street a case for greater intervention grows, if our economy is to begin its recovery.
10. LINKEDIN JOB CUTS
LinkedIn is to slash 960 jobs as recruitment and hiring dries up. These cuts will apply mainly to its sales and hiring division due to the steep decline in their Talent Solutions business. There is simply insufficient demand to warrant such a large workforce in this field. The cuts account for roughly 6% of its 16000 strong work force. LinkedIn is owned by Microsoft after its $26 billion acquisition in 2016.