Top 10 Stories of Last Week! 28/03/2022

The week’s news included; Amazon forced to recognise trade union for the first time, P&O facing criminal investigation, EU launches WTO challenge against the UK, Waitrose sends legal letter to Asda demanding they rename their “Just Essential” range.

Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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: 

  • Charged Retail – Five retail technologies that will shape the sector in 2022. 
  • BBC News – Five reasons why prices and bills are going up.
  • Legal Cheek – How students can stand out in today’s legal market.  

1. AMAZON FORCED TO RECOGNISE TRADE UNION IN THE US

Amazon has been forced to recognise a trade union in the US for the first time. 55% of workers at Amazon’s New York warehouse voted in favour of joining the Amazon Labour Union. The drive for unionisation was led by former Amazon worker Chris Smalls. Smalls has been an activist for better working conditions for staff at Amazon warehouses. He was fired in 2020 for quarantine violations as he protested against poor working conditions during the pandemic. Smalls set up the Amazon Labour Union in 2021 and seeks higher pay, medical benefits, better leave and other changes for staff. This latest vote marks a significant victory and could mark a shift in the employee relations at Amazon, not just in New York but across the US.

Amazon had strongly opposed unionisation and said it was disappointed by the outcome. Unionisation brings stricter employment rules and stronger bargaining power for workers. For Amazon, this hinders their flexibility and limits their power with regards to employee relations. The tech giant may soon challenge the result but it is currently exploring its options. While it lost the vote in New York, workers in one of its Alabama warehouses voted against unionisation. Amazon employs 1 million people in the US.

2. P&O FACES CRIMINAL & CIVIL INVESTIGATIONS

P&O Ferries is facing criminal and civil investigations launched by the Insolvency Service over its sacking of 800 staff. CEO Peter Hebblethwaite already admitted to breaking the law in failing to give notice before sacking staff. Hebblethwaite said it was cheaper to fire then compensate workers and hire foreign agency staff to replace them than continue business as normal. He noted that the business was facing collapse and needed drastic cuts in expenses. P&O knew that no union would accept the proposals so they fired staff without notice to unions or the staff themselves. Last week, UK Transport Secretary Grant Shapps confirmed that formal investigations by the Insolvency Service have commenced. The Insolvency Service can disqualify unfit company directors and prosecute firms for breaches of company or insolvency law. It is likely P&O will face repercussions given their flagrant breach of the law.

3. AIR FRANCE-KLM LOSES APPEAL OVER €300M EU FINE

Air France-KLM lost its appeal against a €300 million EU fine for its involvement in a cartel. Air France, KLM, British Airways, and 10 other airlines were found guilty of fixing air freight, security and fuel surcharges for 7 years until 2006. This was found to breach competition law and the European Commission fined all parties. This was overturned in 2015 after a court battle found procedural errors. The EU’s competition regulator later corrected the procedural errors and reissued the fines in 2017. Air France-KLM appealed to the EU General Court but saw its appeal rejected last week. It will now explore appealing to the European Court of Justice. Air France merged with KLM in 2004.

4. EU LAUNCHES WTO CHALLENGE AGAINST UK

For the first time, the EU has launched a World Trade Organisation (WTO) challenge against the UK. It claims that the UK’s green subsidy program breaches trade rules by being biased towards British companies. The program provides subsidies for green projects such as wind farms.  WTO rules require a level playing field, meaning imports must receive equal treatment to domestic goods. By favouring UK companies, the EU claims the UK’s policy hampers the deployment of green energy and unfairly harms EU businesses.  Concerns had been raised to the UK government but the EU claims the answers they received were unsatisfactory. The UK and EU will now have a 60 day consultation period to formally discuss the matter. If talks don’t resolve the matter, the EU can ask a WTO panel to issue a ruling. This process however, can take years. This marks the first trade dispute between the EU and the UK lodged with the WTO.

5. WAITROSE CHALLENGES NAME OF ASDA’S ESSENTIAL RANGE

Waitrose has written a legal letter to Asda, requesting that it renames its new “Just Essential” range, claiming this is too similar to its own trademarked Essential Waitrose range. Asda has said essentials is a “commonly used term” for basic products. Asda’s low cost Just Essential range is designed to offer cheap, basic goods to help customers with the rising cost of living. It will include 300 products and replace its  Smart Price range which currently has 200 products. Waitrose sent a legal letter to Asda voicing its concerns and awaits a formal response. The supermarket is owned by the John Lewis Partnership.

Shoppers are facing a cocktail of price rises. Along with National Insurance increases, fuel price hikes and soaring household energy bills, food prices will also rise. Around 30% of global wheat and fertiliser exports come from Russia and Ukraine, causing huge inflationary pressures for food prices. 70% of global sunflower oil is supplied by Russia and Ukraine and due to the war, its become unobtainable. Supermarket basic ranges of food, regardless of their names, could provide a lifeline for many households.

6. CRYPTO HEIST SEES $600M STOLEN

Last week saw one of the largest cryptocurrency heists in history as over $600 million in crypto was stolen from a blockchain project.  Hackers stole 173600 ether tokens and 25.5 million USD Coin tokens from the Ronin blockchain project. The total value of the stolen tokens was worth $540 million, but after a spike in prices is now worth $615 million. This makes it the second largest crypto heist ever. It comes behind the heist of Poly Network where hackers made off with $610 million but later returned most of the funds.

Ronin is the engine behind the popular Axie Infinity game that uses non-fungible tokens (NFTs). In the game, players fight with cartoon animals to earn cryptocurrency and NFTs. Thousands of customers hold cryptocurrency tokens on the platform. The company said hackers stole private keys to access accounts and steal tokens. Users were subsequently unable to perform transactions on their accounts. Ronin has not yet informed customers whether they will get their money back.

7. FCA SENIOR MANAGER INVESTIGATIONS

The number of Financial Conduct Authority investments into senior manager misconduct have halved to just six in the past year. This comes in spite of 50,000 newly authorised managers under the Senior Manager and Certification Regime. In 2020, there were 13 investigations into senior manager misconduct so the steep drop in 2021 has caused concern. 

These low numbers of investigations are leading to calls that the regime does not effectively regulate senior managers. While it was recognised the pandemic may have disrupted investigations, there is still need to ensure misconduct is handled effectively by the regulator. Since 2016, only 2 of 54 investigations led to penalties, while over 30 have not been resolved.

8. UK GOVERNMENT SELLS NATWEST SHARES

The UK government has sold off £1.2 billion worth of Natwest shares, taking the bank out of majority public ownership. Natwest was bailed out by the government during the financial crisis for £45 billion and became 84% owned by the taxpayer. Now, the government’s stake has fallen below 48.1%, over 14 years after the initial bailout. Natwest, formerly Royal Bank of Scotland, has been gradually buying back these shares as it has returned to profitability.

9. STUDENT LOAN CHANGES TO HIT GRADUATES

Economists are warning that proposed changes to student loans are expected to severely hit graduates. The government plans to cut the salary threshold at which students repay student loans from £27,295 to £25,000. Furthermore, the debt will be cancelled after 40 years rather than 30 years. Interest rates will also rise with inflation. This will see average graduates with £45,000 of debt end up repaying over £100,000, instead of just £47,000 under current rules. Many have criticised the plans, arguing that they push the financial burden of the pandemic and Brexit on to graduates. The new rules will only affect those who join after September 2023.

10. H&M TO SHUT 240 STORES

H&M will shut 240 stores across the globe but will open 95 new stores. The closures come as it suspended its business in Russia and global revenues shrunk. H&M is opening the stores in growth markets but will close stores in  oversaturated “established markets”. 185 stores in Russia, H&M’s sixth largest market, are currently shut due to the invasion of Ukraine.

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