Data Protection Officers – what’s the risk?
Every GP Practice in England and Wales should have a designated Data Protection Officer (‘DPO’) who is key to the practice being able to comply with its UK General Data Protection Regulation 2016 (‘GDPR’) duties. Unfortunately, there is a lack of understanding about the importance of the DPO role, resulting in partners and separately, the DPO, taking on potentially significant regulatory and financial liability. In many practices, the DPO is seen as a secondary function that a partner, practice manager, or relatively junior member of staff can undertake in addition to their normal duties. In this blog, our data and information security solicitor, David Sinclair, identifies some of the key risks and some steps you can take to avoid them.
The role of the DPO
A DPO has significant, statutory data protection responsibilities that require them to possess requisite professional qualities and other abilities (not defined in the legislation), together with an ‘expert knowledge of data protection law and practices’. Given the complexity and ever-changing nature of UK data protection law, this is a significant burden to impose on any professional – even one with considerable information governance experience.
Unless otherwise expressly set out in the partnership agreement, partners are jointly and severally liable for GDPR compliance, including for formally appointing and adequately supporting a competent DPO, and for filing the DPO appointment with the ICO.
Partners bear the full statutory responsibility of ensuring that the DPO (whether a staff member or third party) has the experience, skills and knowledge to fulfil their DPO duties, as well as the required ongoing training, support and resources to enable them to carry out their role.
A DPO carries significant liability if a GDPR breach is attributed in whole or in part to a failure on their part to properly undertake their DPO duties. This is the case even when it can be shown that they perhaps did not have the necessary experience for the role and/or were not provided with adequate training to understand the GDPR’s requirements (many of which are poorly defined and open to interpretation), unless the DPO can demonstrate that they raised these issues with the practice at the earliest opportunity.
A common misconception among DPOs is that they have immunity from prosecution, dismissal, or other disciplinary action by virtue of their status as a DPO. This is not the case.
Article 38 of the GDPR provides DPOs with limited protection from dismissal or other penalty relating purely to the performance of their DPO tasks. In addition, DPOs cannot be personally liable for the partnership’s non-compliance with the GDPR, which remains with the partners.
Data protection law does not, however, protect DPOs who fail to undertake their statutory role or who do so negligently, eg by them failing to advise the partners, or them giving inaccurate advice, particularly where this is due to the DPO’s lack of competence and they failed to raise that with the practice.
Further, the GDPR does not prevent partners disciplining DPO employees (up to and including dismissal) under the terms of their employment contract, or from partners seeking to recover damages (in breach of contract and/or negligence) from external DPOs, whose failure to undertake their role results in a breach of data protection law.
So how can you minimise your liabilities?
Partners should undertake due diligence on a DPO’s competence and suitability to undertake their role. The practice must also provide the DPO with the resources and support they need to carry out their duties. We strongly advise partners to review their DPO appointment on a regular basis.
Existing DPOs and those considering taking on the role should give thought to whether they have the required training, experience, skills and knowledge to undertake the role. Particular consideration should be given to whether they can advise the practice competently and confidently on complex GDPR issues. Individuals who have doubts about their competence in this area should raise this with a partner as a priority.
For more information about GDPR, the role of the DPO or on information governance issues generally, please contact David Sinclair on 01483 511555 or by email to email@example.com.
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.
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 firstname.lastname@example.org
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.
Weaponising Data Subject Access Requests
If you find yourself in dispute with a partner or employee, then you may well find yourself in receipt of a Data Subject Access Request (DSAR). This is an increasingly common occurrence in civil and employment litigation and requires careful handling. In our experience many primary care practices do not have effective systems in place to deal with DSARs, which can then result in significant reputational damage and financial cost.
In this blog, we look at how and why DSARs are being used as a legal tactic in disputes, and how your Practice can minimise the risk of a claim arising out of one.
What is a DSAR?
The UK General Data Protection Regulation 2016 (‘GDPR’) provides data subjects with a right to access their personal data. Many practices do not realise that a DSAR can be made in any format, including orally, and can be made to anyone in the organisation.
The GDPR also provides data subjects with a statutory right to claim compensation from a provider where they have suffered material (eg medical bills, loss of wages) or non-material (eg distress, anxiety) damage. It has been established that non-material damage can include a data subject’s ‘loss of control over their personal data’.
Article 15 of the GDPR gives a data subject a further right to sue a data controller if they fail or partially fail to respond to a DSAR. ‘Fail’ includes responding late and/or not providing the mandatory information. Recent damages paid range from £750 for the ‘frustration’ felt by a data subject whose personal data had not been erased, to £18,000 awarded for distress following the inclusion of inaccurate personal data in a report.
Why are DSARs important?
DSARs, other than those held to be manifestly unreasonable or excessive, are a fundamental legal and human right that the Courts have held to be ‘purpose blind’. This has led to DSARs being used as a weapon by individual claimants and their solicitors to short-circuit the normal legal disclosure process. The hope is to pressurise a data controller into early and higher settlements by highlighting a breach and/or threatening civil action for compensation.
If poorly managed, DSARs can also result in claimants being given information to which they are not entitled, such as other people’s personal data, which would itself constitute a data breach. This then enables the claimant to increase the size of their own claim, and opens the possibility of further claims from new claimants. Unfortunately, the size of the likely awards means that some solicitors are prepared to act on DSARS and data breach claims on a no win/no fee basis, which simply encourages even more claimants to come forward. In this way a DSAR received on a small dispute can quickly snowball into multiple large claims against a practice.
Good DSARs management starts with processes and staff training. Since DSARs can be made to anyone in the practice, all staff must understand what to do if they receive one. This minimises the risk of a DSAR being overlooked. Practices should then have a single point of contact responsible for responding to DSARs, who is trained in the regulations and who has appropriate access to the relevant systems. They should also understand and manage the timelines for responding, and report directly to a responsible partner to enable quick decision-making. It would also be a good idea to know who you will approach in the event you need expert legal help.
The use of DSARs as a litigation weapon is increasing, as are the number and size of claims against data controllers. It is important that primary care practices have robust, formal procedures in place to ensure that:
- all staff can recognise a DSAR;
- all data search, collation, redaction and removal processes are GDPR compliant
- DPA exemptions are correctly applied;
- all non-disclosable information is withheld;
- any consents to disclosure are valid; and
- timeframes are strictly adhered to
Primary care providers who are uncertain about dealing with a DSAR should seek legal advice as soon as possible, particularly if there is a link to a known or potential litigation matter. If you would like more information about this or any other matter, please contact Nils Christiansen or David Sinclair on 01483 511555, email email@example.com
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.
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 firstname.lastname@example.org or call 01483 511555
Healthcare Professionals: be careful what you indemnify
Healthcare Professionals – be careful what you indemnify
With the increase in collaborative working and working at scale it is becoming common for the owners of a primary care practice to be asked to provide indemnities, say in a sale or purchase contract or in a merger agreement. But what does giving an indemnity actually mean, and what are the risks to you?
What is an indemnity?
An indemnity contract arises when one person takes on the obligation to pay for any loss or damage that has been, or might be, incurred by another person. It is therefore a promise to make a future payment.
Why might you be asked to give one?
Over the centuries the English Courts have developed common law rules for assessing liability for breach of contract. These rules attempt to strike a fair balance between the interests of the party in breach and the party which is the victim of the breach. The factors which determine such balance include remoteness of causation, foreseeability of loss and mitigation of loss. By asking you to give an indemnity, the other party is attempting to move the balance in their favour.
A 1996 judgement by Lord Hoffman explains the difference in assessment of damages by common law rules and by indemnities:
“A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.”
Using the Court’s common law rules for assessing liability, there would have been no liability against the doctor because, although they were negligent, the negligence hadn’t been a factor in the subsequent injury, which was caused by a mountaineering incident unrelated to the knee problem.
If there had been an indemnity in place the Courts might well have found the doctor liable not only for the injury but also for the costs of the expedition, the rescue and all the medical treatment. This is because if the doctor had made the correct diagnosis the mountaineer would never have gone on the expedition in the first place, and therefore wouldn’t have suffered the subsequent injury, paid for the expedition or needed to be rescued.
So should indemnities ever be accepted?
There are certain areas where they’ve generally become accepted by lawyers as being appropriate – such as in a Practice merger and relating to TUPE transfers. Typically, the disposing practice agrees to indemnify the acquiring practice for any employment claims arising during the period before the transfer.
Legal advice should always be sought before binding yourself into an indemnity. A good solicitor would review the wording of the indemnity to ensure it is not unduly onerous. For example, in the case of TUPE transfers, an indemnifying practice should retain the right to defend and settle the claim itself, rather than simply committing to pay whatever is being asked of them by the other party.
Negotiation of contracts generally has little to do with what’s fair or unfair and much more to do with the negotiating strength of the parties. Often any party of whom an indemnity is requested is in such a weak bargaining position that they find it difficult to resist the request.
Although it’s easier said than done, it’s always better to negotiate from a position of strength. In the context specifically of GP practice mergers, if you can see a time in the next few years when it’s going to be necessary to find someone to take over your practice, do it sooner rather than later and try to keep a ‘Plan B’ in the background throughout.
If you have any questions about indemnities or any other queries relating the running of your primary care practice, please don’t hesitate to get in touch with one of our specialist team of expert solicitors. Please call 01483 511555 or email email@example.com
Due Diligence and Disclosure – A Guide for Healthcare Professionals
If you are thinking of acquiring, merging with or disposing of a primary care practice, then this blog is for you.
Firstly, let’s look at two scenarios. When a patient attends an appointment with his GP, the GP will probably ask a series of questions, conduct a physical examination and review the patient’s medical record. Likewise, when buying a house – you will engage a solicitor to make some pre-contract enquiries, to carry out some property searches at the Local Authority and Land Registry, and you will probably instruct a surveyor to check that the building is sound.
When acquiring a GP practice, there is no analogous method for carrying out a physical examination or survey. Similarly there are no publicly available records in relation to partnerships (and information is scant even for companies). Accordingly, the only effective option for investigating a GP practice which you may be interested in acquiring or joining, is by asking a series of questions of its owner. These questions come in the form of a comprehensive due diligence questionnaire – essentially a checklist – covering the commercial, financial, regulatory and legal aspects of the business. The answers to those questions are critical as they form the only x-rays of the target business that a buyer sees.
Just as x-rays are only as good as the ability of the people taking them and as useful as the knowledge of the people examining the results, due diligence is only as good as the questions asked and the understanding of the people reviewing the answers. Lawyers will have comprehensive due diligence questionnaires; those supplied by accountants tend to focus on finance and therefore may be less comprehensive. Prudent buyers will review the answers received themselves and also have their lawyer and accountant review them.
Just as the occasional patient might be less than honest with a doctor in an effort to obtain a particular prescription, business owners have been known to be economical with the truth when answering due diligence enquiries. A problem arises in this regard for buyers, because a peculiarity of the English law of misrepresentation means that a buyer probably cannot place legal reliance on the answers to due diligence enquiries. So why bother with it at all?
Fortunately, to overcome the problem, a buyer’s solicitor will ask the seller to give a series of warranties to the buyer concerning the state of the target business. Breach of those warranties is directly actionable in law and therefore avoids the legal problems related to misrepresentation claims. Warranties are a comprehensive series of statements about the business included in a business transfer agreement prepared by the buyer’s lawyer.
Why then do lawyers not proceed directly to warranties and cut out the due diligence enquiries altogether? Making due diligence enquiries and reviewing the answers is a relatively inexpensive process conducted at the outset of the transaction and therefore, with honest sellers at least, it flushes out any potential problems with a business cheaply and early on in the process.
Warranties differ slightly from guarantees and are essentially a checklist in the form of statements that could be made unqualified in relation to a (mythical) flawless business. To the extent that there are exceptions to the warranties the seller needs to reveal them to the buyer in a disclosure letter. This process is best illustrated by an example.
A warranty that is typically included in a business acquisition is one to the effect that the business is not currently a party to any litigation. If the business is, in fact, in the middle of a court case then the seller needs to disclose that information to the buyer in a disclosure letter, setting out the full facts of the case (dates, parties, nature of claims, nature of defences etc) and attaching copies of the relevant documentation. If the seller fails to make this disclosure then she will be giving an unqualified warranty to the buyer that the business is not involved in any litigation. Because that warranty will be untrue, it will be actionable in law by the buyer. There is therefore a considerable onus on sellers to make full and proper disclosure for fear of otherwise leaving themselves open to legal action. Warranties therefore force sellers to reveal in disclosure letters matters that they might have preferred to leave hidden and which they may not have revealed in response to due diligence enquiries.
In a well-managed transaction nothing will emerge in the disclosure letter that wasn’t already revealed in the answers to due diligence enquiries. There is therefore considerable overlap between due diligence and disclosure, leading many people to conflate the two. This is a mistake, as they are entirely different processes. Due diligence enquiries and answers are essentially an information-gathering process from which few adverse consequences can befall a seller. Warranties and disclosures, on the other hand, form the main protection available to a buyer so that she knows what she is buying ‘warts and all’ and forces the seller, on pain of legal action, to reveal all instances of human papillomavirus infecting her business. As with all documents which you may one day need to rely on in court, you would be well advised to speak to a specialist solicitor before signing any warranties and indemnities!
If you are thinking of acquiring, joining or merging with a practice and would like a free consultation with one of our experienced healthcare solicitors, then please contact Daphne Robertson on 01483 511555 or email firstname.lastname@example.org
New planning regulations to impact on Surgery flexibility and valuation
If you own your surgery premises, you ought to be aware of the recently announced changes to the Planning Regulations.
The new planning regulations come into force on 1 September 2020 and are intended to reduce red tape and speed up development. One change is that GP Surgeries which currently operate under Use Class D1 will be re-designated as new Use Class E(e)â but what does that actually mean for you?
The most significant change lies in all the other uses which now form part of Use Class E (see the full list at the end of this article). From 1 September 2020, any premises with a Use Class E permission is permitted to change to any other use within Class E without having to obtain a new planning permission. This change applies to existing premises as well as new ones.
For GP Surgeries, this means that you could switch the use of your surgery premises from surgery to retail, offices, professional services or as a crÃ¨che (as just some examples) without necessarily having to apply to your local authority for a planning permission for change of use.
Wider opportunities for alternative uses may widen the potential pool of buyers which in turn, could increase value (at least for those premises that are at the end of their useful life as a surgery and are to be sold on for different purposes). We will have to wait and see the full implications of this change.
Even if you are not currently thinking of selling your premises, you could still benefit from the changes. It will be easier for you to use part of the surgery premises for another use Class E – for example if you wanted to change part of your existing premises into a pharmacy or community cafÃ©.
A word of caution
Whilst the changes could prove to give a lot of flexibility to property owners going forward, it is important to remember there are other restrictions that could limit how you can use your property. Your Planning permission could contain particular conditions which may limit the use of the property, and may override the changes permitted under the new Regulations. Associated building works may require their own independent planning permission and covenants on the legal title to the property may impose specific restrictions as to use which you may need to deal with. It is advisable to seek professional advice and undertake careful due diligence on all these areas prior to making a significant change to your property, or indeed if you are buying into surgery premises hoping to take advantage to the flexibility that these new Regulations offer going forward.
Finally, a note of warning to any Landlord’s out there – you will need to take particular care when agreeing lease terms with your tenant, to ensure you do not inadvertently give your tenant the ability to take advantage of the flexibility afforded by the new Regulations without safeguarding your investment.
Please do get in touch if you have any questions about your surgery premises or running your practice. Call Daphne Robertson on 01483 511555 or email email@example.com
âClass E. Commercial, Business and Service
Use, or part use, for all or any of the following purposes:-
(a) for the display or retail sale of goods, other than hot food, principally to visiting members of the public,
(b) for the sale of food and drink principally to visiting members of the public where consumption of that food and drink is mostly undertaken on the premises,
(c) for the provision of the following kinds of services principally to visiting members of the public:
(i) financial services,
(ii) professional services (other than health or medical services), or
(iii) any other services which it is appropriate to provide in a commercial, business or service locality,
(d) for indoor sport, recreation or fitness, not involving motorised vehicles or firearms, principally to visiting members of the public,
(e) for the provision of medical or health services, principally to visiting members of the public, except the use of premises attached to the residence of the consultant or practitioner,
(f) for a creche, day nursery or day centre, not including a residential use, principally to visiting members of the public,
(i) an office to carry out any operational or administrative functions,
(ii) the research and development of products or processes, or
(iii) any industrial process,
being a use, which can be carried out in any residential area without detriment to the amenity of that area by reason of noise, vibration, smell, fumes, smoke, soot, ash, dust or grit.
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 firstname.lastname@example.org
Tips on successful recruitment of new partners
Some factors which affect your ability to attract new partners and are outside of your control, such as locality; housing; access to good schools; public transport etc, but there are many things you can control. Prospective new partners will always undertake some form of assessment of your practice, and you can take steps to help ensure your partnership stands out from the crowd.
Prospective partners will want to be sure that they’re joining a well managed and financially viable partnership. You can evidence this early in negotiations by providing a ‘due diligence pack’ including:
- Partnership Agreement. Ensure your partnership agreement is up to date and fit for purpose (our free checklist will help you);
- Property documents. If the premises are freehold and owned by some or all of the partners, include the Title documents and the agreement by which the partnership can occupy the premises (this may be in the Partnership Deed or a separate licence or Declaration of Trust). Also, check the Title documents are not still in the names of retired/bought out former-partners. If you are a tenant in leasehold premises, include a copy of the lease and check that it has been properly assigned and that you are compliant with it. Document any issues.
- Contracts: Include a copy of your GMS/PMS contract as well as any another key sources of practice income such as public health or network contracts Partnership accounts for the last 3 years. Include an explanation of key movements
- Disputes and contingent liabilities: Prepare a list of known potential liabilities, such as service charge disputes with your landlord, employee disputes, patient complaints etc, and explain what you are doing to mitigate them. Every practice has a few ‘issues’ and it is much better to be upfront about these rather than pretending they don’t exist and risk a partnership dispute later.
- Regulatory Reports. Include the latest CQC report as well as any relevant correspondence from NHSE or indeed the GMC
Just make sure that your prospective recruit has signed up to your confidentiality agreement before you provide him or her with the due diligence pack!
Many new GP partners are reluctant to invest significant capital when they are already saddled with student debt, mortgages and other financial commitments. Having a realistic expectation as to what they can afford to invest into the business is important. If you oblige new partners to buy into the surgery or commit large sums of working capital on or near admission, you will inevitably put some good candidates off.
It is often a good idea to invite a potential partner to talk through the Partnership accounts with your accountant. The accountant can produce forecasts of their likely future income which will also help to build their confidence in you.
In the end, most partners join a new practice because they feel there is a ‘good fit’. Due diligence and other checks are really just ways to confirm a preliminary decision that has already been made based on gut instinct. Many people regard this as outside of their control, but it can be managed. The trick is to have a clear culture in the practice and ensure everyone subscribes to it. Could you succinctly describe the culture in your practice? Would the receptionist describe it in the same way? Would the patients also recognise it? Think about promoting your own ‘vision & culture’ statement. Articulating the culture you are aiming to achieve will help the business deliver it. The culture will be different for each practice and it can be supported by policies. Importantly it should apply from the most junior employees to the most senior of partners, but if everyone clearly works towards the same culture there is a much greater chance that you will attract someone else who ‘fits’.
Being prepared before you start the recruitment process can save you many hours of valuable management time when speaking with potential new partners, as well as putting your practice in a strong position to attract the best available candidates. We can provide assistance in assessing the health of your business documents, and a strategy to mitigate any potential problem areas so please do get in touch with one of our experts.
Remember that you need to ‘sell’ the practice just as much as potential new recruits need to sell themselves.
For further information, please contact Daphne Robertson on 01483 511555, email@example.com
The advantages and disadvantages of LLPs and Mutuals in Primary Care
There are currently only four types of business vehicle permitted to hold GMS contracts. These are:
- Individual GPs (who have unlimited liability)
- Unlimited liability partnerships including at least one GP (the most common structure)
- Limited partnerships including at least one GP
- Companies limited by shares including at least one GP shareholder
There are statutory mechanisms enabling a GMS contract to be transferred between types 1, 2 and 3, but no statutory mechanism enabling a transfer to or from type 4. The rules for PMS are slightly different, but given the right of PMS contractors to return to GMS the difference is not material for the purposes of this note.
The current options for practices to limit their liability are restricted. They could transfer a GMS contract into a limited partnership, but these entities require at least one partner to have unlimited liability for all the risks of the business. Since only a subset of the partners have limited liability, this would create obvious difficulties in a GP partnership. Using a Company limited by shares would limit the exposure of all the shareholders to the value of their capital, but this is not normally available to practices as there is no mechanism to transfer the GMS contract into the company.
Limited Liability Partnerships (LLPs)
LLPs retain the central feature of partnerships, being that partners both own and manage the business. In a company, by contrast, ownership and management are split between the shareholders and directors. Partnerships are often the preferred business vehicle in the professions because the alignment of ownership and management encourages close collaborative working. This in turn facilitates the transfer of tacit skills and good risk management on which the reputation of the profession relies.
LLPs bring several advantages over other kinds of partnership:
- LLPs are registered legal entities and are therefore capable of contracting in their own name. This means that important assets such as the surgery freehold or lease can be held in the name of the LLP rather than individual LLP member’s names. When a member joins or leaves an LLP, there is no need to change the lease or the land registry title, because the member is not named on it. Discussions amongst members would then change from being whether or not to ‘buy-in’ to the surgery, to whether or not to contribute capital to the LLP.
- The liability of LLP members is limited to their capital contribution. There are ways this can be circumvented such as by a mortgagor requiring personal guarantees, but members know that their liability is limited except where they have agreed otherwise. By contrast in traditional partnerships all partners have unlimited liability except where they have agreed to limit it. The most common ways of doing so are to take out insurance (such as professional indemnity cover) or to have contractual limits to liability in service contracts. In this way it is possible to create structures which arrive at similar levels of risk, but they start from opposite extremes
- In an LLP a member is not responsible or liable for another member’s misconduct or negligence. This is an inevitable consequence of the limited liability status since this removes the joint and several liability inherent in an unlimited liability partnership. Some argue that this can reduce the level of collaboration between LLP members, but this has not generally been the experience of other professions.
- There is considerably more formality around LLPs. Unlimited liability partnerships can be created and dissolved with no documentation, whereas LLPs cannot exist unless they are registered at Companies House. This increased formality eliminates some of the uncertainty around whether a partnership has been created or dissolved, which is at the heart of many GP partnership disputes. However, Companies House requires LLPs to file and disclose information about their membership and accounts which is normally kept private in an unlimited liability partnership.
Mutuals and Social Enterprises
There are a variety of legal structures which enable employee and community ownership of, and involvement in, a business. These are usually known collectively as social enterprises. The only form of social enterprise which is currently open to primary care is a Community Interest Company Limited by Shares (“CIC-CLS”). Since the same ownership rules apply to a CIC-CLS as to an ordinary company limited by shares, it is not possible to use it to broaden employee and community involvement in the practice.
If other social enterprises were to be permitted to hold GMS and PMS contracts, they would most likely include Companies limited by Guarantee (“CLG”), Community Benefit Societies (“BenComs”) and Industrial Provident Societies (IPS).
The primary difference between the various different types of enterprise comes down to who they ultimately seek to benefit:
- Partnerships and LLPs look to provide financial benefit (profit) for the partners/members
- Companies limited by shares look to provide financial benefit (profit) for the shareholders
- CLGs look to provide financial and non-financial benefit to a defined purpose and are often charities
- BenComs look to benefit the community
- IPS’s seek to benefit their members
If social enterprises were able to hold GMS and PMS contracts, they would have similar advantages to LLPs. They all generally have legal personality and so can hold assets and contracts, they have limited liability by default, and they are regulated and must be registered. Social enterprises come with the additional disclosure requirement beyond those of LLPs, to ensure that their social purpose is being complied with.
A further possible advantage with social enterprise is that it might make it easier to integrate across other elements of healthcare, since it would be easier to involve the care and voluntary sectors in a social enterprise such as a BenCom.
If LLPs and mutuals were permitted to hold GMS and PMS contracts, this would not resolve the question of how to move existing GMS and PMS contracts into them. As LLPs and mutuals are distinct legal entities, they would suffer from the same procurement problem as Companies limited by shares currently do. This is that procurement law states that public bodies must tender all contracts above a certain value. Because GMS and PMS contracts do not generally have a fixed term, their cumulative value normally exceeds this threshold. Since moving a contract from one legal entity to another is technically a termination and re-grant, the re-grant would by default have to occur through a tender process. There are exceptions to the public tender rule, but it is a matter of some debate whether these exemptions can be applied to GMS and PMS contracts.
If you have any questions or for more information, please contact Nils Christiansen on 01483 511555 or email firstname.lastname@example.org