What can go wrong with a surgery move or redevelopment?
Making the decision to move to a new surgery, or to redevelop your existing surgery building, is a big step. In fact, it is likely to be one of the most complicated legal transactions a practice will ever undertake, carrying significant financial and legal risks.
Once you have successfully secured a share of the NHS premises development budget, you need to think about managing this complicated process.
There are too many differing scenarios for us to cover them all in this blog and not all of the issues we mention will be relevant to you, but we highlight below some of the more common problems we encounter during transactions of this nature.
1. Partnership changes during the process: change within any partnership is reasonably common, but in this situation it can create confusion as to who has certain obligations and who doesn’t. What obligations does an incoming partner take on, and will a retiring partner be released from his or her obligations? In addition, if you have agreed to sign up to a new lease, there is a risk that the number of partners may drop below the minimum number of tenants specified in the lease.
2. Signing a development agreement without District Valuer (DV) approval: the premises funding approval process must be followed to the letter. One common misconception is that DV approval can be sought once the building is up and you are ready to sign the lease. In all likelihood this is too late in the process as you are already committed.
3. Lack of understanding of the total lease costs: this is a very common issue, particularly when it comes to service charges: what non-rent costs are payable, and how will they be financed?
4. Using a limited company to try and manage risk: some practices try to manage their risks by putting the property or lease in a limited company. This is not something you should do without specialist advice, as it often results in significantly higher cost and no risk reduction.
5. Misunderstanding the difference between an agreement for lease (AfL) and a lease: the AfL binds the signatories to signing a lease – subject to certain conditions being met. All development works are therefore associated with the AfL and it can often be a year or more before they are completed. Some practices sign the AfL thinking they will be able to negotiate the lease at a later date, but this is not the case.
6. Overlooking the partnership agreement: it is important to bind all partners into the obligations under the lease and AfL. Since only a subset will be signatories of these documents, it is critical that the risk and obligations are properly shared through an up to date partnership deed. Remember that occupation of the surgery is a vital feature of the partnership so these documents must work properly together.
7. Not seeking advice from a specialist surveyor: a specialist surveyor needs to be involved in any surgery development, to ensure all works are compliant with the regulations. Otherwise, the funding will be put at risk.
8. Failure to properly consider tax: there are many potential tax savings associated with a development, but it requires careful consideration and planning if these are to be maximised. This will need to be done far in advance.
Our recommendations
In certain circumstances, it can make sense for a practice to work on resolving an issue itself – but developing a surgery, or moving premises is not one of them!
With the amount of complexity involved and so much at stake, we would advise any practice considering development, to enlist the support of an experienced team, including a specialist solicitor, surveyor, and tax adviser. That way you can ensure you have everything covered and are fully compliant and protected.
If you need help in this area, we are always happy to introduce clients to the extensive network of contacts we have built up, to help ensure the success of your practice.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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PMS contractors and the BMA model contract
The BMA model contract is a topic we recently covered in our blog: ‘What is the BMA model contract and does it apply to me?’.
Many PMS contractors assume the need to provide such a contract does not apply to them. However, the issue isn’t quite so clear cut and this may be leading some practices to inadvertently put themselves at risk.
In this post, we look at the issue in more detail to help clear up any confusion.
Which PMS contractors does the BMA Model contract apply to?
While all GMS contractors must offer the BMA model employment contract – or ‘terms no less favourable’ – PMS contractors are only obliged to if it has been stated in their contract.
In our experience, problems arise when a practice is unaware what is written in its contract. This can lead to salaried GPs being employed on non-BMA model contracts, despite there being a contractual obligation to do so.
Any PMS contractor who has signed the NHS England Standard PMS Agreement 2015/16 will have the obligation, and indeed the majority of PMS contracts we have seen over the last few years include it.
Sometimes practices can accrue the obligation unwittingly. For example, if a practice has signed a new contract following a PMS review they may not realise that the clause has been included and that they should move all their salaried GP staff onto new employment contracts.
What are the implications?
If salaried GP staff believe they are being underpaid, or have the incorrect contractual provisions, then they may seek to take action.
Whilst there is some debate about who can enforce the BMA model contract clause, there is the potential for NHS England to issue a contractual breach notice if they become aware that a PMS contractor is not offering the terms they should.
Most PMS contracts have a clause preventing third parties (such as employees or patients) from enforcing the terms of the PMS contract, however we are aware that some do not. In this case it may be possible for an aggrieved employee to enforce the clause directly, which could lead to a successful claim for historic loss of earnings.
With changes in partnerships, mergers and super-partnerships, where any such liability actually falls would be a complex legal issue to resolve.
Our recommendations
If you’re a PMS contractor and you are not sure what your current status is, then start by looking at the most recent version of your contract. Check whether or not it specifies that you have an obligation to offer the BMA model contract.
If it does and you are in breach, then we would recommend you seek advice from a specialist legal team, who will be able to guide you on your options and the best way forward.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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What can you do about inflated NHSPS service charges?
Around 1,500 GP practices in England currently operate from premises owned and managed by NHS Property Services (NHSPS). Many of these surgeries have now been contacted by NHSPS about entering into a new lease and are also facing demands for a highly inflated service charge.
The proposed service charge increases can be substantial, with charges reaching up to six figures in certain cases. So, it’s little surprise that we have been contacted by many practices who are extremely concerned about the impact the increased costs will have on their business.
The first point to bear in mind is that unless you have signed a lease and agreed to these charges, you shouldn’t feel immediately pressured and you may be within your rights to challenge them. There are also practical steps you can take that may help you negotiate with NHSPS and agree on a more manageable figure going forward.
Breaking down the costs
The invoices themselves are sometimes not very clear, as they simply lump all costs together. Begin by checking the backing sheet to break down the cost, so you’re clear on exactly what you are being charged for.
In accordance with the Premises Cost Directions, certain expenses are classed as ‘reimbursement costs’ and should sit outside the service charge. They are:
- Rent
- Rates
- Clinical waste
Other elements may also be reimbursed in part, depending on what they include. Such as:
- External repairs and maintenance for which the tenant has responsibility
- Buildings insurance
The repair costs may not be recovered in full, as they depend on the District Valuer looking at the Current Market Rent figure. This will usually include an ‘uplift’ of a small percentage (usually around 5%) which includes reimbursement for these items but in practice may not cover the whole cost. That is why it is important to control service charges; as they often not fully recovered.
All remaining items will form part of the service charge, which will typically include landscaping, litter picking, gritting and the cleaning and lighting of common areas.
Action you can take
1. If you have a lease – Check what it says about your obligations in regard to payment, as the terms of the lease will ultimately prevail. If you have signed a lease and agreed to them, then you are legally obliged to pay in accordance with the lease terms. Check what the lease says about which services the landlord must provide, how the service charge costs are worked out and what the optional services are. Ideally, your lease may have a cap beyond which the landlord cannot charge.
2. If you don’t have a lease
Our recommendations
In this situation, there is no ‘one solution fits all’. While there has been some talk of a national resolution, nothing has yet materialised. It is difficult to imagine how a single solution can suit all practices, since this kind of approach is likely to generate winners and losers.
If you don’t have a lease in place, our advice is not to feel pressured to pay the inflated charge. Follow the steps we have outlined above and try to negotiate a more acceptable amount. Resist the temptation not to pay anything, however. The safest course of action will usually be to keep paying the amount you have historically paid, and get assistance to negotiate revised terms. Be careful not to sign or commit to anything until you have professional advice!
Also, be wary of time sensitive incentives, such as offers to pay legal fees or stamp duty land tax. Whilst these are nice to have, a one-off payment is unlikely to offset the impact of a large recurring annual service charge, so make sure you understand the cost/benefit.
For more information about NHSPS leases, or any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
- Continue to pay what you have historically paid. Paying any more could set a new precedent and that’s something to be avoided as it may harm your negotiations if you decide to enter into a formal lease later. If you’ve been in occupation for a long period of time without a formal lease, then you may have a periodic tenancy that secures your rights. This could also be helpful when negotiating a service charge cap.
- Consider starting a maintenance fund – Begin putting some money aside regularly, so you have built up a contingency pot should things get difficult in the future.
- Negotiate – The final step is to try and negotiate an amount you can afford to pay and a service charge cap in your new lease. The advantage of having a cap will be the certainty it provides, but it does have the drawback that charges are likely to end up at that amount, so think about what you can afford going forward. If a cap cannot be agreed, the services and method of charging should be carefully reviewed – for example, any additional services should only be provided with your consent to the proposed costs.
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Ceasing contributions to the NHS Pension – what are the partnership implications?
There are many reasons why a partner may decide to stop contributing towards the NHS Pension – from 24hr retirement, to approaching the ceiling of the lifetime allowance, or simply deciding to make other pension arrangements.
At DR Solicitors we are receiving an increased number of enquiries from partnerships seeking clarity on this matter, as stopping contributions is becoming more common.
The good news is, it’s a relatively straightforward process. The key is to have an accountant who understands the NHS pension scheme and a Partnership Deed which correctly defines the allocation process.
The main areas that can sometimes lead to confusion are:
The role of NHSE
NHSE pays the contract sum to the practice net of estimated pension contributions. NHSE then pays these withheld contributions across to NHS Pensions. This payment is sometimes referred to as the ’employer contribution’ but this is incorrect. NHSE is simply paying across the partner contributions on behalf of the individual partners who are members of the scheme.
How pension contributions are treated in the accounts
If NHSE didn’t make these payments, the contract sum would be paid gross to the practice and the individual partners would make the contributions instead. A common mistake is to forget that practice income is not the monies actually received from NHSE, but rather the monies received PLUS the pension contributions withheld. It is this gross amount which should be shown in the accounts and split in profit sharing ratios.
The pension contributions should then be treated as an expense attributable to individual partners. As such, when a partner ceases to make contributions, the expense will disappear and so the net profits they receive will increase.
The only way this process can give rise to problems for a practice is if income is shown as the net amount received, rather than being grossed up with the withheld contributions. This would, however, be an error in the accounts and contrary to accounting policy.
A simple worked example
Imagine a two-partner practice operating with a 50/50 profit share, where Partner A contributes £100 towards the NHS pension and Partner B contributes nothing:
- The practice receives £900 from NHSE (the contract sum minus £100 pension contribution)
- Practice income = £1000
- Partner A net profits = £400
- Partner B net profits = £500
The Partnership Deed
The Partnership Deed simply needs to state that all pension contributions are an individual expense. It may also state that all income should be shown gross, but this is normal accounting policy so is not strictly necessary. There will be other circumstances that the deed needs to cover, such as dealing with over and under accruals on retirement, but that is a topic we will cover in more detail at a later date.
Our recommendations
Allocating pension contributions is an area that any specialist accountant should be familiar with, and only a poorly drafted Partnership Deed would get wrong, but if you’re at all unsure then please feel free to get in touch and we’d be happy to help you.
For more information, please contact Nils Christiansen on 01483 511555 or email n.christiansen@drsolicitors.com
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Due Diligence – is it worth the effort?
For any major commercial transaction, you need to know exactly what you’re getting into and ensure (as far as is possible) that there aren’t going to be any nasty surprises further down the line.
In the same way that you would call on the services of a surveyor when thinking about buying a house, due diligence when you are merging or acquiring a practice can help you see what’s below the surface and avoid you making a costly mistake.
A GP practice merger or acquisition will typically involve:
- Legal due diligence – which focuses on all legal arrangements associated with a practice; and
- Financial due diligence – which examines the accounts and all financial dealings, usually from the last 3-4 years
For this blog, we are going to focus on legal due diligence.
Who can carry it out?
You may choose to carry out due diligence yourself, or ask your solicitor to deal with it. Using a solicitor has the benefit that everything will be documented in a business transfer agreement, with appropriate legally binding warranties and indemnities.
While certain issues are easy to identify, others are not. An experienced solicitor will know what to ask and recognise potential risks which you will want to know about.
What kind of risks may be identified?
In a GP practice merger or acquisition, the biggest risks will often be associated with:
- property
- the core contract
- staff
- pensions
but there may be others and it is important to undertake suitable investigation and raise enquiries.
Examples of issues you need to be aware of are onerous business contracts, unresolved disputes, and pending or threatened legal actions. Some of these will be documented, but others might not be.
Warranties & Indemnities
If there is any uncertainty, then you have the option to ask for a warranty from the partners, whereby they legally confirm what they have said is true. This may offer some comfort, but you may also want a series of indemnities to protect you from future liabilities crystallising. Just bear in mind that an indemnity is only as good as the financial standing of the person who gives it.
Our recommendations
At the end of the due diligence exercise, you should feel confident that you understand any risks and can make one of three choices: accept the position, mitigate the risks or walk away.
Undertaking a merger or acquisition is a big decision. The benefit of due diligence is that it can help you identify early on where the high-risk areas may be. It isn’t something you have to do, but we would always recommend it.
Fortunately, most practice mergers go through without incident and due diligence doesn’t reveal any problems. However, for those unlucky few where a major problem is highlighted, it will have been time and money well spent. Think of a due diligence exercise as similar to taking out an insurance policy.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Why succession planning is vital for any GP partnership
When you’re busy dealing with the day-to-day responsibility of running a GP practice, planning for the future can sometimes take a backseat. But there is one area you cannot afford to overlook and that’s succession planning.
There will naturally be some level of movement within any GP partnership, from individuals moving on, to those retiring or choosing to leave general practice altogether. Indeed, figures from Health Service Journal reveal that more than 20 per cent of GPs are approaching average retirement age in some areas of the UK.
These ‘normal’ problems are however exacerbated by the current recruitment crisis in General Practice, such that in many areas it is proving near impossible to recruit new GP partners.
Knowing how you will manage losing a partner and taking steps to eliminate or reduce any potential issues, is a vital part of the process. Having a robust succession plan in place is key, for the protection of the practice, the patients, and the interests of partners.
Problems you may encounter when the number of partners declines include:
- Potential breach of lease – A surgery lease will often specify the minimum number of tenants, with the figure commonly set at two.
- Difficulty getting a mortgage – It may prove difficult for a practice with just a couple of partners to obtain a mortgage on a large/valuable building. As a minimum you can expect to face higher interest rates and have to contribute greater equity.
- Profitability at risk – Locums and salaried GPs are now frequently more costly than partners, so the loss of a partner may threaten the underlying profitability of the business.
- Increased pressures and commitment – Dealing with the management and regulation needed to run a GP practice is much easier when it’s shared between a number of partners. The fewer people involved, the bigger the commitment each partner needs to make.
- GMS/PMS contract issues – Once the partner to patient ratio becomes too skewed questions may get asked about your ability to deliver your clinical care obligations. NHSE can terminate a contract if they consider “that the change in membership of the partnership is likely to have a serious adverse impact on the ability of the Contractor or the PCT to perform its obligations”.
- Fear of the ‘last man standing’ issue – If the Partnership Deed obliges you to buy out a retiring partner, this can trigger a run as everybody tries to avoid being the ‘last man standing’. But even if you aren’t obliged, the result may be the surgery being part owned by people who have no interest in the business, which can create its own problems.
So, what can you do?
There are several steps you can take to try and reduce the risk of problems. They include:
- Increase the timeframe within which partners must leave their capital in the business following a retirement – ideally, until a replacement has been found
- Reduce the risk of a rush to exit by requiring a gap between retirements within the Partnership Deed. This should give you more time to recruit a replacement
- Consider undertaking a merger to increase the size of the partnership
- Make yourself a teaching practice and thereby more attractive to junior doctors who may be interested in becoming a partner in the future
- Agree what will happen to the mortgage following retirement. For example, specify whether retirees will be liable for a percentage of any early redemption penalty
- Consider promoting or recruiting a practice manager as a partner, to share the management load and further spread any risk
- Open channels of communication with NHSE and establish what additional support may be available to you
Our recommendations
Prevention is always better than cure, especially when it comes to handling a retirement and the loss of a partner. It will always be far easier to plan ahead, than to deal with an issue should it arise. Taking time to consider all the potential implications and having a robust succession plan in place that is fully documented within the Partnership Deed, will offer you the greatest protection.
If you are facing any of the problems we’ve mentioned here, or for advice on undertaking a comprehensive succession plan, we’d urge you to seek the advice of an experienced legal team, who will ensure your interests are protected.
For more information about succession planning, Partnership Deeds, or any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Are you in breach of your GMS or PMS contract?
A GMS contract is a legally binding agreement made between a GP practice and NHS England (NHSE) that sets out certain obligations for both parties. It is the most important asset a practice will hold.
Running to over 270 pages plus lengthy appendices, it is a substantial and complicated document, both to navigate and understand.
Unless a practice has read it from beginning to end, and has very careful monitoring in place, it is likely that most practices will be in breach of their obligations at some point or another – in many cases, without realising.
So, what can practices do to protect their contracts?
Dealing with a breach
There are many reasons why a practice may be in breach of their GMS contract. Some are minor and some more serious.
If you do become aware of a contractual breach, you should rectify the problem as soon as possible and put procedures in place to ensure it doesn’t happen again. You should then assess the impact of the breach.
An example of a minor breach might be a failure to keep the practice leaflet or website up to date. There is not normally any obligation to inform NHSE of these minor breaches, although a practice would be obliged to provide such information if requested. If NHSE were to find out they would probably issue a breach or remediation notice. Once a practice receives two or more of these, NHSE become entitled to terminate the contract on notice, subject to a cumulative impact test.
For more serious breaches, you may be obliged to notify NHSE. In particular you should notify NHSE as soon as reasonably practicable, of “any serious incident that, in your reasonable opinion, affects or is likely to affect your performance of your obligations under the contract.”
Whilst this leaves room for ambiguity, a breach would certainly be considered ‘serious’ if it put patient safety at risk. An example of this might be a failure of the vaccine fridge, combined with inadequate records to prove that the no vaccines had been compromised.
Once NHSE becomes aware of a serious breach, they would consider whether to deal with it under the breach and remediation notices procedure outlines above, or possibly to terminate the contract forthwith. They could only do the latter, however, if they could show that patient safety was at serious risk.
There are particular notification requirements for breaches where:
- a contractor is no longer eligible to hold a contract – for example, if there is no General Practitioner left in the partnership
- if a partner becomes bankrupt, convicted of a serious criminal offence, is disqualified or suspended, or if a partnership is dissolved
In these instances there is a requirement to notify NHSE, who then need to consider contract termination (although there is not necessarily a requirement for them to terminate).
It is worth noting that while we are talking about GMS contracts in this blog, PMS contracts usually – but not always – have very similar clauses so always refer to your individual contract to be sure.
Our recommendations
We advise practices to familiarise themselves with their core contracts and ensure they understand their obligations. Put systems in place to help monitor compliance and if a breach occurs, attempt to remedy the situation as soon as possible and put processes in place to prevent it happening again.
In the case of more serious breaches, for which practices are obliged to inform NHSE, you should let them know as soon as you can, include an impact assessment, and show that procedures have been put in place to reduce the risk of re-occurrence.
The complex nature of the core contract means it is not always clear whether you might be in breach, nor whether you need to notify NHSE. If you are in any doubt about your compliance, the severity of a breach, or if you have received a breach or remediation notice, then always seek the advice of an experienced legal team.
For more information about managing a breach, or any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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What are the legal implications of recent changes to the SFE?
Most GP practices will be aware of the recent changes to the Statement of Financial Entitlements (SFE), which came into force on 1 April 2017.
Since the revised SFE provides for both new income streams and changes to existing potential income streams, decisions need to be made as to how this additional income is to be allocated. These rules, once agreed, then need to be correctly documented.
We’ve highlighted below some of the key changes and what you need to consider from a legal perspective:
Reimbursement of CQC Fees
A system of direct reimbursement will be introduced whereby practices can submit their paid invoices to NHS England, or their CCG (under delegated commissioning) and will receive full reimbursement of the amount paid.
However, this raises two potential issues. Firstly, the practice has to pay the fees before it can claim a refund. Secondly, and perhaps more importantly, there is an assumption that the contractor is the CQC registered provider. This will usually be the case for GMS practices but arguably is not normally the case for PMS practices. This could be a source of dispute in due course.
Reimbursement of Indemnity insurance costs
Funds have been allocated to cover rising indemnity insurance costs. This money will be paid to practices on a per patient basis, but the intention is that the monies should go to whoever is paying the insurance premiums.
If practices pay for the PI cover for all their staff, they should keep the monies and share as they see fit. Normally, this would be between the partners in profit sharing ratios.
However, the situation is different if any GPs working at the practice pay for their own PI cover. The practice must then reimburse an appropriate proportion of that individual’s PI cover cost.
Depending on your circumstances, this could necessitate changes to your Partnership Agreement, employment contracts, and locum contracts.
Changes to GP retention Scheme
Improvements have been made to the GP retention scheme, whereby GPs who are planning on retiring (or who meet certain other criteria) are able to apply for retention monies as an incentive to stay in general practice.
If successful, these monies will be paid to the practice and partners will need to agree how the monies are to be shared. Normally, the individual will expect to take these monies as a prior share, but unless this is clearly agreed by all the partners, the default would be that the monies are shared in profit sharing ratios.
Changes to sickness absence payments
Changes have also been made in relation to sickness absence payments, which can be made for both locums (as previously) and now for the practice’s GPs covering each other. This seems a sensible change which may be helpful for many practices.
However, this scenario is often not contemplated in partnership agreements so could give rise to debate and conflict over how to fairly allocate the additional income.
Our recommendations
We recommend that you consider the changes and assess their impact on your current processes. If there are any necessary changes (which we would expect there to be) you will need to review your existing partnership agreement and potentially your salaried GP contracts and locum contracts, to check they reflect what you have agreed.
Remember, if you don’t have a partnership agreement in place, or it is lacking in detail with regards to specific issues, then the legal position by default will be that everything is shared in established profit sharing ratios.
As an aside, while the SFE applies to GMS contracts by default, it will only apply to PMS contracts where the contract specifically states this. If you are in any doubt, you should check your PMS contract.
For more information about the impact of these changes, or any other enquiries, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Why is a partnership offer letter so important?
Taking on a new partner is a significant step for any GP practice, and it is important to get it right from the outset.
Once a new Partner has been selected, a partnership offer letter should be next on the agenda.
Why do you need one?
The letter will act as written confirmation of the key terms of the appointment. By properly documenting and setting out the terms in this way, the offer letter can provide some protection for the Partnership until the Partnership Deed is updated, and reduces the risk of dispute over the offered terms.
What about the partnership deed?
The admission of a partner is something that needs to be dealt with within a partnership deed as soon as possible once your offer has been accepted.
Practices often find difficulty in updating the Partnership Deed before the start date, which makes the offer letter even more vital, as it will act as a holding agreement until the Deed is resigned.
There is a misconception that a partnership deed shouldn’t be updated until after an incoming Partner has completed their probation period. This approach is not advisable for a number of reasons and ultimately you can end up as a partnership at will which can put your contract at risk.
What should the offer letter cover?
The offer letter needs to be consistent with the existing arrangements that are set out in the existing partnership deed. The key things it should include, are:
- Commencement date
- Offer of partnership – clearly stating that the position is self-employed
- Notifications – confirming that notifications will be given to NHS England & CQC once the offer if accepted
- Sessions – outlining in detail the sessions that are expected to be covered
- Partnership share – explaining how earnings will be worked out
- Working capital – detailing any working capital contribution that is expected
- Surgery premises – attaching a copy of the surgery lease and outlining there will be shared liability for the lease terms, including the rent. If there is to be a commitment to buy into the surgery premises, this should also be stated
- Mutual assessment period – detailing any probation period and what it will entail, including notice periods Annual Leave entitlement
- Administrative requirements – stating that proof of identity and qualifications, eligibility to work in the UK and an up to date CRB check will all be needed prior to the partnership commencing
- Acceptance – the time frame within which the offer must be accepted
- Partnership Deed – a copy of the Partnership Deed, the terms of which they must consent
Our recommendations
Make sure your offer letter is clear and sets out all the key points; it should be signed by one or more of the current Partners and have place for the new recruit to sign by way of acceptance of the terms.
You then need to get the partnership deed updated as quickly as possible, and preferably ahead of the new partner starting.
As with any contracts and partnership issues, it is always advisable to seek the support of an experienced legal team, who can ensure you put yourself in the strongest possible position.
For more information about employment contracts and any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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What is the BMA model contract and does it apply to me?
The BMA model contract was introduced in 2004 to try and ensure a common standard for GPs employed by practices and those employed by PCOs. The PCOs have since become CCGs and NHS England, and they no longer employ significant numbers of GPs. Nonetheless, the BMA Model Contract has endured. All practices which it applies to must offer their salaried GPs the BMA model employment contract, or ‘terms no less favourable’.
Over the last 10 years the profile of the profession has changed drastically. There are now many more salaried GPs than ever before and most of them should probably be on BMA model contracts or similar.
Who does it apply to?
It is an express term of all GMS Contracts that the GMS Practice must offer their salaried GPs BMA model contracts or terms no less favourable.
The definition of a salaried GP includes:
- Salaried GP who undertakes special interest work (a GPwSI)
- Assistant
- Associate
- GP retainee
- Flexible Career Scheme GP
- Returner scheme GP
- Salaried GP employed to work out-of-hours.
PMS and APMS practices
The position for PMS and APMS practices is more complex. The NHS England Standard PMS Agreement 2015/16 contains the same requirement as GMS, but most PMS practices hold different, older contracts.
The original intention was that PMS would be locally negotiated. Some local commissioners included a clause requiring BMA Model Contracts in their PMS contracts, whilst others did not.
The only way to be sure is to read your PMS or APMS Contract – something very few practices ever do.
Is it a standard template?
The BMA model contract is a downloadable template document, but it doesn’t have to be used in its exact form. The phrase ‘no less favourable’ means it can be varied and negotiated. The employee and employer might agree to change some of the terms, perhaps trading some leave for pay and so on. In the end it is up to the parties to decide whether they regard a change to the model as a favourable one or not.
We generally advise practices to carefully consider the wording of the contract rather than simply adopting it wholesale. There are some important employer protections which are found in most other employment contracts and which are not in the BMA Model. Also, you will probably want to ensure that your salaried GPs are not on radically different terms to your other clinical and possibly also non clinical employees.
What if you get it wrong?
If the requirement is in your GMS/PMS/APMS contract and you employ salaried GPs on terms which are less favourable than the BMA model contract, then you are in contractual breach. If NHS England become aware of this, they will almost certainly issue the practice with a ‘Remediation Notice’. This will require you to rectify the situation within a given timescale and sanctions could also be imposed. If 2 or more breach or remediation notices are issued NHS England would be entitled to consider termination of the contract.
Recommendations
If you are a GMS Contract and are not offering the BMA Model Contract or terms no less favourable, you should consider taking steps to rectify the situation.
If you are a PMS or APMS practice then your first step should be to check your NHS E contract to see if the BMA model applies.
Aim to have an open discussion with the person you’re looking to employ, to negotiate the terms that will be most favourable for both parties. You need to find a positive balance between the best interests of the practice and the individual. Just remember that overall, the terms and conditions must be deemed ‘no less favourable’ than those set out in the BMA model contract.
In general this is a surprisingly tricky area of law, and something which both employer and employee can get very exercised about. If you’re at all unsure about your situation, then always seek the advice of an experienced legal team who will be able to assist you.
For more information about employment contracts, any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com