European Union: The GDPR Countdown: Employers Are You Ready? – Penalties

As mentioned in our previous GDPR update, the tenth update in this series will deal with penalties. Given the potential for large fines and liabilities under the GDPR as set out below, employers should ensure they are in compliance with the GDPR from 25 May. We have set out below the penalties that may be imposed on companies for non-compliance with the new rules.

Administrative Fines

One of the most dramatic changes that will occur under the GDPR is the manner in which sanctions will be imposed on employers going forward. This change is significant for two reasons.

Firstly, under current Irish laws, only the Courts can levy fines on offending parties. Traditionally, this has meant that, in every instance, the Data Protection Commissioner (the "DPC") would have to issue legal proceedings against an offending employer. The GDPR however introduces the concept of 'administrative fines'. This means that the DPC no longer has to initiate legal proceedings in the Courts but can instead directly impose fines on offending organisations. It appears therefore that it will become much easier and quicker for fines to be imposed and this may result in a stark increase in the number of fines that will be levied in the future.

The second significant change in respect of data protection sanctions is the maximum level of fines that can be imposed. Currently, in Ireland, the maximum monetary fine that the courts can impose under data protection legislation is €100,000. From 25 May 2018, an administrative fine of either 2% of an employer's annual worldwide turnover, or €10 million (whichever is higher) can be levied for an infringement of the lower-tier provisions. Infringement of the higher-tier provisions of the GDPR can result in an administrative fine of either 4% of annual worldwide turnover, or €20 million (whichever is higher).

Whether the lower or higher tier fines will apply will ultimately depend on the type of breach that has occurred. Examples of infringements that will result in the lower tier of fines include:

  • appropriate consent is not received from children;
  • failure to appoint a Data Protection Officer;
  • security measures in place are inadequate;
  • failure to appoint a representative within the EU by non-EU controllers or processors;
  • a controller uses a processor that does not meet the standards laid down in the GDPR;
  • failure to adhere to record keeping obligations under the GDPR; and
  • failure to notify personal data breaches under the new notification regime;

Examples of infringements that will result in the higher tier of fines include:

  • failure to adhere to the core principles of data protection;
  • infringement of the rules governing the processing of special categories of data (ie, sensitive data);
  • breach of the rights of data subjects;
  • sharing personal data with non-EEA countries that do not provide sufficient protection and safeguards; and
  • failing to comply with an order of the DPC or other supervisory authority. (This category of infringement is noteworthy because a higher tier fine can be imposed on an employer if it does not follow an order from the DPC relating to a lower tier breach).

There is no provision for strict liability under the GDPR but sanctions must be effective, proportionate and dissuasive. The fines outlined above are the maximum caps that may be imposed and in determining the level of a fine, the DPC will look at various factors. These factors include the nature, gravity and duration of the infringement. In addition, the DPC will consider if the breach was intentional or negligent, if any steps were taken to mitigate the damage and the level of technical and organisational measures in place to prevent the breach. The DPC will also assess how it became aware of the infringement (i.e. did the employer notify the infringement or was it discovered by the DPC through an investigation) and assess the level of cooperation provided by the employer to remedy the breach.

Corrective Measures

In addition to administrative fines, the DPC will also have the power to investigate breaches of the GDPR and to impose "corrective measures" on offending employers. Such corrective measures include the ability of the DPC to:

  • order an employer to comply with a data subject's requests to exercise his or her rights;
  • order an employer to bring processing operations into compliance with the GDPR (within a specified manner and time);
  • order an employer to communicate a personal data breach to a data subject;
  • impose a ban on processing;
  • order the rectification, restriction or erasure of personal data;
  • order a certification body to withdraw a certification issued to the employer; and
  • order the suspension of data flows to a non-EEA country.

The DPC must consider all corrective measures when dealing with an infringement. This means that the DPC can levy an administrative fine together with a corrective measure, or impose an administrative fine or corrective measure on its own.

Individual Redress

Another key change that will occur under the GDPR is an individual's ability to seek redress due to the GDPR specifically providing for a right to compensation. This means that any person, who has suffered damage as a result of an organisation infringing the GDPR, has the right to receive compensation from that organisation for the damage suffered.

In this regard, the GDPR provides for a "joint and several" style liability. This means that where a controller and a processor are involved in the same processing, both parties will be fully liable in circumstances where they are both responsible for the damage caused. This provision endeavours to ensure that there is always an effective remedy for a data subject. As a result, data subjects may have a choice of different organisation to pursue, and will likely opt for the one with the greatest resources, which in many cases could be an employer.

The GDPR further clarifies that the damage suffered can be both "material" damage (ie, damage resulting in direct financial loss such as loss of earnings) and "non-material" damage (ie, non-quantifiable damages such as pain and suffering). This is significant because the Irish Courts have not previously recognised claims from individuals in data protection cases for non-material damages. From 25 May 2018 however, this will no longer be the case. This change will mean that employees and other data subjects will be able to sue for stress and emotional suffering as a result of breaches of data protection legislation.

We expect that these new changes will result in a significant increase in litigation from data subjects who feel that their data protection rights have been infringed. As a result, employers should work to ensure that they meet all their obligations and responsibilities under the GDPR.

The substantial strengthening of data protection rules, and in particular the potential liabilities under the GDPR, highlights the need to ensure that each organisation has in place appropriate procedures to ensure compliance with the new rules. If you are interested in further detail on the HR aspects of the GDPR, you can access a panel discussion on this from the Matheson Employment Law Podcast series.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions