GP Partnerships: So who do you think you are? Are you a self-employed Partner or are you an Employee?
Most GP practices continue to be organised as partnerships: an ‘independent contractor’ status which has outlived innumerable changes in the NHS. The ‘golden hello’ new to partnership scheme has attracted over 1,300 applicants over the last year, demonstrating that there are still plenty of people who aspire to becoming a partner in a GP practice. However, in an effort to keep up with the fast changing environment and to appeal to a broader range of partner candidates, many GP partnerships are looking at ways of flexing the traditional partner role, to the benefit of all concerned.
In this blog, we look at the 3 main types of partner we regularly encounter in GP practices.
1. Equity Partner (self-employed)
This is the most traditional partner model. Equity Partners are self-employed and have full and equal rights to decision making and are part of a collective management team which is jointly responsible for all aspects of running the practice. Profits and losses are shared equally, although sometimes there is a ‘path to parity’ over a period of a few years. With the rise of part-time working, a common variant is to share the profits and losses on the basis of planned sessions. Equity Partners are expected to contribute capital to the business (as a minimum working capital, but sometimes also property or other capital) which is usually called ‘buying in’. An Equity Partner is jointly and severally responsible for any losses and liabilities that arise in the partnership. This means that creditors can choose to pursue one or all of the partners for the full amount of the partnership debts.
2. Fixed Share Partner (self-employed)
Fixed Share Partners are also self-employed. A Fixed Share Partner typically receives a fixed, guaranteed income for a defined period of time (sometimes during a mutual assessment period) and there should also be an element of variable income based on the profits or losses of the practice. The ‘golden hello’ scheme does not apply to Fixed Share Partners where the fixed share period extends beyond the expiry of any mutual assessment period. Fixed Share Partners still share full liability alongside the Equity Partners so they ought to be suitably indemnified by the Equity Partners in the partnership deed. Fixed Share Partnership arrangements need to be carefully documented to avoid HMRC viewing the tax status of the person as an employee.
3. Salaried Partner (employed)
Salaried Partner and Fixed Share Partner are often (incorrectly) used interchangeably. The key to this person’s status is in the word ‘salary’. Whereas partners take drawings on account of their profit share, Salaried Partners are employees who receive a salary. Salaried Partners should have an employment contract, they benefit from the protection of all relevant employment legislation and they receive a salary with tax and NI deducted at source under PAYE. Salaried Partners may have an element of ‘bonus’ depending on the profitability of the practice and this will be documented in their employment contract. Salaried Partners will not be a party to the partnership deed and they should have no share in the partnership profits and no voting rights. For a Salaried Partner, the word ‘partner’ is just a title and nothing more so they need to be suitably indemnified by the Equity Partners in their employment contract.
A word of warning…
Third parties can bring a claim against anyone who calls themselves a partner, be they an Equity, Fixed Share or Salaried Partner. So behind the scenes, Fixed Share and Salaried Partners are usually protected by way of an indemnity from the Equity Partners. An indemnity is a promise from the Equity Partners to financially compensate the Fixed Share or Salaried Partner in the event of a loss or liability arising. However, the indemnity will not be worth the paper it is written on unless the Equity Partners are good for the money.
Conclusion
If you are a GP practice or a partner or you are thinking about partnership and you want clarification on this blog or any other matter relating to primary care, then it’s time to contact us. Please call us on 01483 511555 or send an email to info@drsolicitors.com
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Protecting yourself & your business: getting ready for VCOD2
At the time of writing this article, the Government looks poised to delay the controversial new legislation known as ‘vaccination as a condition of deployment’ (or ‘VCOD2’) which will make Covid vaccines mandatory for NHS workers in England. The debates for and against the new laws continue to be heard, but even if the mandate is delayed, it will mean those working in the NHS will be facing the same dilemma this summer as they would otherwise face now: comply with the mandate or face dismissal.
As things currently stand, in order for a person to have received two doses of the Covid vaccine by the 31 March 2022, they will have to have had their first dose by 3 February. This is likely to account for the large number of enquiries we have seen pouring in from GP practices, seeking advice on their position.
In this article, we look at what the new law means for Practices and their employees.
What if an employee refuses to be vaccinated?
If VCOD2 goes ahead as planned, then an employee refusing to be vaccinated could face dismissal under the definition of ‘Some Other Substantial Reason’ or ‘SOSR’. An employer intending to rely on SOSR to dismiss an employee is advised to follow a fair procedure, which may include discussing the employee’s concerns about vaccination with them, and taking steps to find alternative work for an affected employee.
Some employers will argue that the obligation to follow a fair procedure is not necessary, because in all likelihood, in light of the mandate and the limited opportunities for re-deployment within GP Practices, doing so is unlikely to make a difference to the outcome. If this argument were to be successful, it could lead to any award for unfair dismissal being substantially reduced.
Redeployment
Many Practices will struggle to find space in their current premises to ensure separation of an affected employee. Potential for redeployment and in particular, selection for alternative work is an aspect of the dismissal process where disputes are likely to arise. If you are an employer dismissing several unvaccinated staff but have identified just one alternative position, you may need to take advice on how you choose which employee to save from dismissal and redeploy.
New policies, pre-employment checks and contracts
If vaccination status is to be a permanent pre-condition to NHS employment, all employers will need to develop policies to reflect the new law. Safe systems to ensure validity of proving vaccination status will need to be put in place and pre-employment checks and checks on locums and contractors will also be essential.
Redundancy
NHS England has made clear that employers must not treat VCOD2 dismissals as redundancies; the consequence being that dismissed staff will not be eligible for any redundancy pay.
Legal claims
The controversy and perceived unfairness by many of VCOD2 dismissals, suggests that dismissed staff are unlikely to go quietly. Class actions may even follow. Although compensation for unfairness will be limited (if awarded at all), we predict claims will be issued and employers will face the unwanted repercussions of this, in terms of time and money spent and reputational impact.
Keeping pace with change
Unlike other preconditions to employment, what constitutes “fully vaccinated” is a moving target. It is unclear how the Government intends to deal with this, save for the fact that Ministers have recently said that the booster is being considered as an additional precondition. How will employers deal with the state of flux in their contractual documentations and policies?
Impact on staffing and recruitment
VCOD2 dismissals will leave significant gaps in staffing across an already stretched NHS. Any dismissals will have a knock-on effect on the remaining workforce with employees being forced to take on additional responsibilities and work longer hours. Further pressure on NHS staff will be seen by most as unreasonably burdensome and the impact on staff retention and recruitment could be dramatic.
Morale and support
How can employers and employees keep buoyant and continue to feel supported at this time? For many, VCOD2 could see long serving members of staff leave NHS service in a matter of weeks, whilst those that remain must continue to provide high levels of care in what is the most demanding and uncertain of environments.
Conclusion
Whilst many questions remain unanswered, our view is that whether the VCOD2 comes into force in two months or later this year, the time for employers to develop workforce strategies to cope with the change and to inform and consult with affected staff is now.
We can advise GP Practices and PCNs on how to engage with staff, the potential redeployment of staff, as well as advising on staff handbooks and Partnership Deeds. Please contact Daphne Robertson for a free initial consultation: d.robertson@drsolicitors.com or telephone 01483 511555.
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Fixing the Fixed-Term Employment Contract
Use of fixed term contracts in primary care can be beneficial to both the employee and the employer, but should be used with caution. Read on to learn about some of the key risks and how to avoid falling foul of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the “Regulations”).
If you are an employee, a fixed-term employment contract offers some benefits, such as a degree of flexibility and the ability to test out working in a new specialism or location.
As an employer, a fixed-term is the ideal solution if a role is established to carry out a temporary or time limited project; where a role requires specialist high-level skills to achieve a certain objective; where there is limited funding available or to cover for sick leave or secondment.
The Regulations are in place to protect an employee’s rights but are frequently overlooked in the busy world of primary care. Some of the issues are explored below.
Less favourable treatment
An employee on a fixed term contract has the same general employment rights as a permanent employee, such as protection against discrimination. In addition, the Regulations protect fixed-term employees from being treated less favourably than permanent staff working for the same employer, unless there is objective justification for the treatment. Employees on fixed-term contracts have a right under the Regulations not to be treated less favourably than comparable permanent employees in relation to:
- terms and conditions of employment
- training, promotions or transfers
- permanent positions within the organisation (employees on fixed-term contracts must be informed of any permanent vacancies that arise)
If an employee believes that they have been treated less favourably than a permanent employee, they can request a written statement from the employer to explain the reasons for the less favourable treatment. The employer must respond to the request within 21 days.
Ending the contract before or after the term
There is no legal requirement to include a notice clause in a fixed-term contract, but it is usually advisable to have one as it allows each party the chance to end the relationship before the expiry date should it be necessary to do so.
If there is no notice period in the contract and one party wishes to end the contract early, the other party may be able to claim damages to cover any losses for the balance of the contract period.
If a fixed term contract is left to run over, then each party will be required to give notice in order to end the employment. The contract will no longer end on the expiry of the fixed term because that moment has passed. Often, the need to serve notice was not envisaged when the contract was entered into, so the question of how long the notice period should be can become the subject of dispute.
Repeated renewals and conversion to permanent employment
You should be aware of the four year rule. A fixed term employee will be considered a permanent employee if they have completed 4 years’ continuous service under one or more fixed term contracts, unless the employer can justify the continued fixed-term status, which is not easy to establish.
If an employee believes that they have become a permanent employee on this four-year basis, they are entitled to ask the employer to confirm in writing that their contract is permanent and no longer fixed-term. The employer must respond within 21 days of such request or, if it does not agree, then it must justify and give reasons as to why it believes that the employment is still for a fixed-term.
Fairness of ending a fixed-term contract
In law, the expiry of a fixed term contract without its renewal is regarded as a dismissal. If an employee has two years continuous service, they will be entitled to claim unfair dismissal if their contract is not renewed. The employer will need to demonstrate that there is a genuinely fair reason for the non-renewal (and there may be redundancy rights to consider) and that a fair process was been followed. It is important that the employer consults with the employee in good time before the expiry of the contract, so the likely impact of the non-renewal of the contract can be properly explored and other potential job opportunities considered.
Need advice?
At DR Solicitors, we specialise in all aspects of primary care, including employment advice and dispute resolution. Please contact us for an initial free consultation by calling 01483 511555 or email info@drsolicitors.com
About the Author
Karen Black of DR Solicitors has over 20 years’ of specialist experience in employment law. She has been specialising in primary care for 4 years and her knowledge of the latest trends in this ever-changing environment result in her sensitively handling employment disputes and devising practical solutions to keep disruption and costs to a minimum.
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ARRS Chaos – How to avoid some of the ARRS employment traps
One of the underlying issues with ARRS resources is the challenge in deploying staff across multiple member practices. This sharing of resources cuts across the usual employment relationship where an employee works for a single employer, and across most employment laws and regulations which have a single employer arrangement in mind.
Because a PCN is a contractual construct (as opposed to a legal entity), it cannot employ staff in its own name. PCNs are therefore forced to come up with structuring and contractual workarounds to achieve the desired result.
These workarounds include:
- appointing a ‘lead practice’ to act as the employer;
- entering into a ‘joint employer’ arrangement;
- sub-contracting with a GP Federation or third party;
- incorporating the PCN.
The desired outcome is the same, namely a PCN resource who works across all the member practices, and where all the practices have the same or similar rights and obligations towards that member of staff.
Where to start? Identify the key responsibilities
The easiest way to achieve the desired outcome is to break down the various responsibilities associated with engaging staff, and agree which entity will perform it and how. Key responsibilities include:
- Recruitment responsibility
- Day to day management, eg scheduling & work allocation
- HR management, eg disciplinary and grievance procedures, annual review, agreeing pay and pay rises.
- Organising cover in the event of absence and deciding who will pay for it (ARRS does not currently reimburse this cost).
- Planning and paying for dismissal or redundancy
- Managing plans to restructure the PCN and deciding what should happen to the ARRS staff members
In a traditional employer/employee scenario, all of these responsibilities would sit with a single employer. By contrast, in a PCN the responsibilities can be shared amongst core network practices, or transferred, in whole or in part, to another organisation entirely. The answer will depend upon your structuring choices and could be any one of (1) to (4) above, but what is clear is that not all of the responsibilities need to reside in one place, indeed there may be differing optimal solutions for each different resource.
Case Studies
In our previous blog we gave some examples of resourcing problems that PCNs are encountering, and will now explore those further:
Q Who will cover my Clinical Pharmacist when they are on short term leave?
A Firstly, consider whether cover will be required for the duration of the staff member’s absence. This needs to be agreed between the practices, but full cover is more likely in the case of a clinical resource than a non-clinical one.
If cover is required, then who will provide and pay for the cover is a contractual question. Broadly, unless you’ve agreed amongst yourselves or with your supplier (in the event you’ve sub-contracted) that there will be cover, then the default position is there will be no cover.
If the employer is a lead practice, the answer should lie in your PCN Agreement or more likely, a Workforce Sharing Agreement.
If the employer is a GP Federation, Trust or similar, the answer should lie in the PCN sub-contract with that party.
Q My Occupational Therapist is under-performing and I want to move to an alternative provider – can I do so?
A This scenario clearly assumes that a third party is providing the occupational therapist. Subject to any termination provisions in the contract, you would normally be free to move to another supplier of services. However, if the occupational therapist is working exclusively for your PCN, then the switch may be a service provision change to which the TUPE Regulations will apply. The effect of this is that even if you were to move to another supplier, the under-performing occupational therapist is likely to automatically transfer to the new supplier and you could therefore still have the same person turning up for work.
In reality, this is likely to be resolved by discussion with the supplier and you will have to go through the contract management processes with that supplier. This will only be possible if you have a well drafted contract setting out the expected service levels and you are able to explain in what ways those service levels are not being met.
Q Who picks up liability in a redundancy situation?
A The answer to this is always the employer in the first instance. The employer may be able to recover the costs from the member practices but only if there is an agreement in place stipulating that they can do so. This would either be the PCN Agreement, a Workforce Sharing Agreement or a sub-contract depending on the structure.
Inevitably, this is something which is likely to be hotly contested so it is important that these documents are well drafted so that all parties are confident that they rely on them. Also bear in mind that any contractual promise is only as good as the party who has given it, so you will want to make sure you understand the financial standing of your contracting parties.
Conclusion
In summary, the use of ARRS resources is inherently complicated and goes against the normal way of employing staff. Our recommendation is that you analyse the key responsibilities and figure out which legal entity is going to be responsible for each of those and then critically, make sure that this is written into the relevant agreements. Those agreements could be a PCN Agreement, a Workforce Sharing Agreement or a sub-contract. The key is that these documents are well drafted and properly negotiated. Remember that these are all legally binding documents and are the only mechanism to achieve any of the above outcomes.
Once you’ve determined this, then the relevant employer must ensure that each contract of employment with a PCN resource reflects the unique arrangements have been made. It is unlikely that a standard ‘off the shelf’ employment contract will do this, so this will usually need some careful drafting.
As can be seen, working with an ARRS resources can be complicated and unfortunately, problems are likely to emerge. As always, the risks can be minimised by taking appropriate advice in advance.
If you would like to speak to an expert solicitor who can help you with your PCN Agreement, Workforce Sharing Agreement, employment contracts or third party sub-contracts, then please call Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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The importance of keeping your staff policies and training current and relevant
How up to date is your staff training really? Take a moment to answer these 5 questions:
- Do you have policies and procedures dealing with equality and diversity, for example in your staff handbook or intranet?
- When did you last review and update your policies and procedures?
- When did you last provide training to all staff, including your Practice Manager?
- Have you provided refresher training?
- Do you know how to investigate a complaint of discriminatory treatment?
If you have answered ânoâ, ânot sureâ or âover six months agoâ, you should read onâ.
A recent decision in the Employment Appeals Tribunal raises the question of what is considered ‘reasonable’ when it comes to employers providing ongoing training to employees. In the case of Allay (UK) Limited v Gehlen, a colleague made racist comments to Mr Gehlen, who was of Indian origin. These comments were heard by and reported to other colleagues, including two managers, but nothing was done. Allay (UK) Limited sought to defend the claim brought against it by relying on section 109(4) of the Equality Act 2010, which states that an employer can defend a claim resulting from otherwise unlawful discriminatory actions of an employee, if it can demonstrate that all reasonable steps were taken to prevent employees from committing discriminatory acts. Here, the employer pointed to its policies and procedures on equality and harassment and training given to staff in 2015.
Allay (UK) Limited’s defence failed. Although the training clearly informed staff about what to do should harassment or discriminatory behaviour occur, at least three members of staff were aware of the racist comments made to Mr Gehlen and did nothing about it. The perpetrator tried to pass off the comments as banter. The Tribunal said that this showed that the training was âclearly staleâ and that refresher training was a reasonable step which the employer could and should have taken, even though Allay (UK) Ltd was a relatively small employer. The failure to take this ‘reasonable’ step meant that they could not rely on the defence which required them to have taken all reasonable steps and compensation was payable to Mr Gehlen.
What steps should an employer take?
You may wish to review your current employee training schedule to make sure that it properly meets your requirements and provides for regular refresher training – then make sure the refresher training is undertaken.
Your policies and procedures should be reviewed regularly to ensure they are up to date both in terms of the law and relevance to your Practice. Do not rely on generic, off-the-shelf policies that are unlikely to reflect accurately your Practice’s specific needs. Similarly, your staff handbook should be bespoke to your Practice, to show that you have really considered the needs of your Practice and the policies adopted.
Conclusion
Achieving the standard required to rely on the defence is possible and within reach of all our primary care clients. If you would like to find out how we can help you make sure that you do not unintentionally cut off this potential line of defence, please contact Karen Black by email k.black@drsolicitors.com or call 01483 511555
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Important changes to employment law from April 2020
Very few employers are increasing their workforce while the country is in lockdown, so there has been remarkably little discussion about the changes to employment law which have recently come into effect. Since healthcare is one of the few sectors still recruiting, it will ironically be one of the first which needs to adjust. Some of the changes are very significant, so we have set out below what you need to know.
New Section 1 Statement (of Terms)
A Section 1 Statement is the minimum information an employer is required to give an individual about their working terms and conditions. For most practices, the contract of employment (sometimes together with the offer letter) comprise the Section 1 Statement.
Currently, employers have up to two months to issue written terms to any employee working for them for more than a month. From 6 April 2020 all new joiners must be provided with written terms in a single document on or before day 1 of starting work.
The new rules apply to workers as well as employees so it is important to be aware of this wider group.
Section 1 Statements now need to include more information and it is mandatory to include details of:
- the normal working hours, the days of the week the worker is required to work, whether such hours or days may be variable, and if so how they will be varied
- paid leave entitlement beyond holiday leave, such as maternity leave, paternity leave and sick leave
- the duration and conditions of any probationary period
- all remuneration and benefits such as vouchers, health insurance etc
- any training requirements and who is expected to pay for such training
Some information can be provided in a ‘reasonably accessible place’ such as a staff handbook, but if this approach is adopted the information must still be referred to in the statement and it will be important to make clear which parts of the handbook are contractual and which are not.
An existing employee has a right to ask for a new S.1 Statement and if an employer receives a request, then it must provide the more detailed contract terms within one month of the request.
There is no obligation to provide existing workers who are not also employees with a written statement unless they are re-engaged after 6 April 2020.
If an employer changes one of the mandatory S.1 Statement details, then the employer must give existing employees a statement of change at “the earliest opportunity”, and in any event within one month. This is likely to become important as employers endeavour to change terms and conditions in response to the Covid19 crisis.
Parental bereavement leave
This new right (known as “Jack’s Law”) entitles employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, to two weeks’ unpaid leave as a right from day one of their employment. Parents can take up to two weeks’ leave, either in one block of two weeks or in two blocks of one week, within 56 weeks of the child’s death.
The new right applies to parents, adoptive parents, intended parents, parents-in-fact and the partner of any of these individuals as well as foster carers, employees with day to day responsibility for the child (who are not being paid for such care) and employees who expect to be granted a parental order in respect of the child. The right came into effect from 10 March 2020.
Although this new right does not extend to GP Partners unless it has been written into their partnership agreement, practices should review the new right in the context of other leave provisions for partners, such as compassionate leave.
Recommended Action Points for Practices:
- ensure a process is in place to provide all required information to all new joiners (including workers who are not employees) by day 1, at the latest;
- review template contracts of employment and offer letters for new joiners to ensure that they include the prescribed information;
- ensure processes are in place to provide updated statements on request and when any prescribed terms and conditions change;
- review training requirements and practices so that contracts/Section 1 statements can be updated accordingly
- Implement the new bereavement leave policy by updating staff handbooks and contracts
- Consider whether you wish to include parental bereavement leave in your partnership agreement or any other provision or arrangement which would assist partners in coping with a child bereavement
- Assess how the parental bereavement leave will interact with compassionate leave
For assistance in implementing these changes or for other advice on employment law, contact Karen Black or Daphne Robertson on 01483 511555 info@drsolicitors.com
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How should PCNs share their employees and workforce effectively?
Summer 2019 – memorable for heated political debate, spectacular cricket … and the establishment of Primary Care Networks!
With PCN Agreements concluded, members must now turn their attention to the growth of the network workforce. Over the next five years it is estimated that some 22 000 additional staff will become network employees. This year, each network will recruit a clinical pharmacist and social prescriber, shortly followed by a first contact physiotherapist and a physician associate next year.
First step: structure
Unlike the procedure for standard recruitment by individual practices, the introduction of the new network workforce necessitates network members to first decide how to employ network staff.
The BMA have identified five potential operating models for PCNs and each model has different consequences for the structure of the workforce within the network.
At DR Solicitors, we notice a marked preference amongst our clients for the lead provider and the federation model, but it is important to realise that in the same way as a practice can hire staff as partners, employees or locums, a PCN can hire different resources using different models. The resourcing model is therefore a critical factor to consider every time a resourcing decision is made.
Factors to consider when deciding on structure include control, tax, cost, liability operating model and resource availability. There is no one size fits all answer, and what works best may well change over time. The key is therefore adopting a model which is flexible and suits your local circumstances.
Second step: Document the sharing agreement
When agreement has been reached as to the employment structure, the sharing arrangement must be documented. In cases where the individual is employed by a PCN member acting as a lead provider, a Workforce Sharing Agreement (‘WSA’) will be required.
This Agreement sets out employer and employee responsibilities and importantly, makes clear cost sharing arrangements for the shared employee. The agreed framework for managing the shared employee should be set out in detail, including procedures to deal with absence, confidentiality, recruitment, termination, changes to Ts&Cs and more.
The WSA cannot be generic as specific details will depend on the resource being shared. For example, it should state whether the particular shared resource will need to be back-filled or not.
If the new resource is being provided from a third party like a Federation or Trust, a Sub- Contract will be a more appropriate document. This is because the primary responsibility lies with the Core Network Practices through their DES, and they will want to ensure that the same obligations are passed through to the Federation or Trust. This requires a different set of decisions. For example, in a WSA the main purpose will be to ensure that all costs and liabilities are shared, whereas in a sub-contract practices will need to decide whether to pass the risk of cost over-runs and employment claims onto the sub-contractor. Just because the PCN receives a certain amount of funding for a particular role does not mean that this is what they have to contract to spend.
Do I need any other agreements, in addition to the WSA or Sub-Contract?
The network employee will not be party to the WSA or Sub-Contract and therefore it will be necessary to have a contract of employment between the employer and the individual. There are no mandatory contractual terms for staff employed under the PCN DES, but there are nonetheless important considerations, such as the levels of reimbursement available and the newly identified responsibilities for each role.
Mobility for the employee within the network is essential and we recommend that a Licence to Attend is signed, permitting the employee to carry out work at PCN locations other than the premises of their direct employer.
Recommendations
Remember that a PCN is a wholly contractual arrangement. Since PCNs do not exist as a legal entity, there is no body of law to fall back on and this means that all arrangements within a PCN must be documented particularly carefully. Workforce sharing arrangements are no exception to this.
If one or more of the Core Network Practices are going to employ the shared resources we recommend that a WSA is concluded before terms and conditions of employment are agreed with each new network employee. Until the WSA has been agreed, you risk that some or all of the risks and costs of employment will remain with the employing practice.
If you have decided to sub-contract the resources to a different entity like a Trust or Federation, we recommend that you agree a Sub-Contract before any of the new resources start work in the PCN. This is the time when you will have most negotiating power, and will ensure that all parties are clear about who is picking up which costs and risks. An appropriate sub-contract also happens to be one of several rules regarding sub-contracting which are set out in your GMS Contract.
The area is very complex so as ever it is a good idea to take specialist advice. At DR Solicitors we have supported well over 100 PCNs so are experts in this field. For advice on Workforce Sharing Agreements, Sub-Contracts or PCNs generally, contact Karen Black or Daphne Robertson on 01483 511555 info@drsolicitors.com.
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What pregnancy and maternity rights does a partner have?
A partner is a business owner and employer, which by definition means they are not an employee. As a consequence, partners do not benefit from all the various employment protections afforded to employees. Despite this, we are often asked about partner entitlements, particularly regarding maternity and childcare.
What is the legal position?
Partners do not benefit from statutory maternity and childcare entitlements, although they are protected from being discriminated against by reason of their pregnancy and maternity, gender and marital status under the Equality Act 2012.
Broadly speaking, the Equality Act provides that women should not be subject to “less favourable treatment”, or subject to unreasonable requirements that they cannot meet because of their pregnancy/maternity or childcare commitments.
The majority of the maternity rights for a partner will be set out in their partnership agreement. These will be binding unless they are found to be discriminatory. In the absence of a partnership agreement, there are very few automatic rights that will accrue.
Common Issues
Particular issues where liability under the Equality Act could accrue include:
- Not engaging or promoting someone to Partner because of concerns that they will be absent due to maternity leave, or won’t be able to “pull their weight” because of childcare commitments;
- Not allowing for any maternity leave at all or a very short period only;
- Not allowing a female Partner who has a pregnancy related illness the same sickness absence entitlements as other sick Partners;
- Reducing profit share during maternity leave;
- Not accruing holiday leave during maternity leave;
- Not allowing a partner to work part time or change session times to deal with childcare commitments.
None of the above are entirely clear-cut and would need to be looked at on a case-by-case basis. For example, the Equality Act certainly indicates that holiday leave should accrue in the normal way during some of a partner’s maternity leave, but it is less clear whether this would accrue during the entire period of their absence.
Practices should be aware that they can claim under the SFE for payments to cover locum expenses during maternity, paternity and adoption leave. The common practice is that the absent partner continues to receive profit share whilst the SFE payments are being received. However, if you wish to do this, you will have to ensure that this is set out in your partnership agreement.
Conclusion
This is an area of law that is both complex and uncertain. There is only a limited amount of case law applying specifically to Partners, so each case is likely to be determined on its own merits.
Practices should be very wary of opening themselves to the risk of a discrimination claim, as these have unlimited liability. The best protection is to:
- Ensure that the practice has a clear non-discrimination policy in place which includes discrimination on the grounds of maternity and childcare commitments.
- Make clear that this policy applies to all staff, including partners.
- Ensure that the Partnership Deed is professionally prepared, that it is clear on the subject of maternity and other forms of leave, and that it is kept reasonably current as the law changes. Anything drafted more than 3 years ago may well be out of date with current best practice.
If you have any questions about this or any other matter, please contact Daphne Robertson on 01483 51155 or d.robertson@drsolicitors.com
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Does your professional indemnity insurance put you in breach of your employment contract?
GP practices and salaried GPs are advised to check the terms of their employment contracts if employed clinical staff are considering taking out “claims made” insurance, such as that recently offered by the MDU.
In a previous blog, we looked at the broader implications of claims-made insurance policies (Will you or your practice be impacted by the MDU policy changes?). However, another potential consequence, which we’ll be focusing on here, is how claims-made policies may inadvertently put salaried GPs in breach of their employment contract.
So, what exactly is the issue and what action should you take?
Current employment contracts
The ‘BMA Model Employment Contract’ states that “The practitioner will maintain full registration with the General Medical Council and membership on an occurrence based basis with a recognised medical defence organisation commensurate with your responsibilities”. (What is the BMA model contract and does it apply to me?)
This point is regarded as so important, that it is repeated in both the BMA model contract and in the BMA model offer letter. It is clear that the BMA negotiators assumed that all salaried GPs would be insured on an occurrence based basis – i.e. a policy that offers protection for any incident which occurs during the policy period, even if the claim is filed after the policy has ended.
Since all GMS practices, and many PMS practices, are required by their provider contracts to engage their salaried GPs on employment contracts that are ‘no less favourable’ than BMA model terms, it is likely that most salaried GP contracts will include a similar clause.
As a consequence, if a salaried GP moves to a claims-made indemnity policy, they may be unwittingly breaching the terms of their employment contract.
Our recommendations
As a first step, we would advise all practices and salaried GPs to look at their employment contracts and Staff Handbook, to see whether there is a requirement for employees to have an occurrence based indemnity policy.
If the requirement is included, practices need to have procedures to ensure compliance. The BMA model contract states that salaried GPs should provide “written proof and evidence of such membership”, so practices would be free to request this.
If there is currently no written requirement, practices should consider whether they are content to allow salaried staff to move to a claims-made contract or not, and employees should consider whether they wish to make the move. This is a question of understanding the risks involved, such as whether the employing practice is exposing itself to more risk by permitting claims made policies. All parties would be well advised to speak to a specialist IFA to fully understand this.
Practices which do not currently require occurrence based policies but wish to do so going forward will need to consider making changes to their employment contracts. We recommend that you always seek appropriate legal guidance before doing this.
If you are at all unsure about any of the issues we have covered here and how they might affect your practice, then please do not hesitate to get in touch.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
News
Salaried vs Fixed Share Partners
Managing partnership changes and staffing are two of the most common issues any practice will deal with and how they are handled can have long term implications, especially in relation to a new partner joining the business.
One area that can cause confusion is the difference between a ‘Salaried Partner’ and a ‘Fixed Share Partner’. The two terms are often used interchangeably, but they are very different and it’s important that a distinction is made.
Here, we look at the key differences and the implications they may carry for your practice.
What is a fixed share partner?
A fixed share partner is an owning partner in the business. As such, they should sign the Partnership Deed and will have whatever rights and obligations are stated therein.
- As a partner they won’t have employment law protection
- They will have an agreed minimum monthly income and additionally some form of profit share
- They will share in the losses but may be indemnified against some or all of these by the other partners
- They will have injected some capital into the business
- They will be entitled to attend meetings and to participate in partnership decisions
- They will have voting rights
- They will not be controlled by other partners
- They will be taxed as self-employed individuals
- They will be entitled to opt in to the NHS partner pension scheme
- They will have some ownership over the GMS contract and potentially also the PMS contract
What is a salaried partner?
In contrast, a salaried partner is normally a title given to a senior employee. As such, they won’t sign the partnership deed and will be working under some form of employment contract (even if it is called something else).
- They will be entitled to a salary and potentially some bonuses – although usually not related to profit
- They will have full employment law protection
- They will be at no risk of sharing any losses
- They shouldn’t have any voting rights in the partnership and there will be elements of control by the other (owning) partners.
- They are taxed as an employee paying PAYE & NI
- They are entitled to opt in to the NHS employee pension scheme
- They will have no ownership over the GMS contract and would not normally have any interest in the PMS contract
- They must guard against third parties regarding them as ‘real’ partners and thereby inadvertently becoming liable for the partnership debts.
Why does it matter?
Typically, what practices are trying to achieve with a Fixed Share Partner is a partner who has many of the characteristics of an employee, while a Salaried Partner will typically be an employee with some of the characteristics of a partner. The problem is that the law only recognises employees or partners, there is no middle ground.
The most important point to remember is that the title itself does not determine the real status. That can only be established by analysing the detail of the arrangement.
If a title is mismatched to the actual legal status of the person, there is a risk of creating legal uncertainty. This could lead to any number of future problems, most of which will be costly to resolve.
Our recommendations
We will consider the pros and cons of each option in a future article, but our main piece of advice for anyone considering appointing or becoming a fixed share or salaried partner, is to ensure you are clear from the outset about the outcome you are seeking to achieve.
The starting point is to decide whether you are welcoming a new partner, or a form of senior employee. All other aspects of the role flow from there, and it is important to ensure that you don’t accidentally incorporate key features of one type into the other. This is all too easily done and the consequences of getting it wrong can be serious.
If you’re going to make staffing changes, especially if those changes are to a ‘partner’ role, please make sure you seek specialist advice to ensure the arrangement is documented appropriately.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com