5th February 2018
Getting to grips with the new regime for disciplinary action against Statutory Officers
One of the most difficult issues that councils can face is taking disciplinary action against, and potentially dismissing, a statutory officer i.e. the Head of Paid Service, Monitoring Officer or Chief Finance Officer (s151 Officer).
A new set of regulations governing the procedural protections for these statutory officers in disciplinary situations was introduced in 2015 – but as amendments to nationally negotiated contracts for Chief Executives setting out the procedures to be adopted were only made in October 2016, and amendments for Chief Finance Officers and Monitoring Officers in August 2017, it is only now that councils are making use of the process in practice.
The new process
Under the old regulations, no disciplinary action, nor suspension for more than two months, nor dismissal could be taken without a report from a Designated Independent Person (DIP).
The new regulations remove the DIP role – and replace it with the requirement for an Independent Panel (of at least two people) to report before a decision is made to dismiss at full Council. The council is not obliged to follow the Independent Panel’s recommendation.
The new process runs as follows:
-If it is decided that an allegation against a statutory officer needs to be investigated, the council’s Employment Committee – which generally has responsibility for these matters – will consider the issues (termed the Investigation and Disciplinary Committee or IDC)
-The Employment Committee must appoint an independent investigator, taken from an approved list held by the National Joint Secretaries: the statutory officer has a say in which of a list of three is chosen
-The independent investigator will investigate and report back to the Employment Committee
-The Employment Committee will then agree its recommendation to the council. If the recommendation is for dismissal, this must be considered by the Independent Panel
-The Independent Panel will review the recommendation and compile a recommendation of its own
Both reports/recommendations go before full council who will review and make their final decision
We estimate that the very minimum amount of time needed for this new process is three months – and most cases will take considerably longer.
It may still be appropriate to consider having a compromise agreement to conclude the matter quickly and to agree severance payment deals with officers rather than go through the formal process. However, this will become more difficult not only because of public and political pressure against payoffs but also because the government still intends to introduce public sector exit payment caps of £95,000 in the future, which are likely to have very limited discretion to waive the cap. Full Council approval is recommended in statutory guidance in any case for payments, including pension strain, over £100,000 (although in some cases a council may have justification for not following the guidance).
There are a number of issues that councils need to consider: Employment Committees – some councils may not have one (or an IDC), so will need to be ready to set one up; other existing ECs may have terms of reference that need to be amended and approved
Constitutions – these need to be amended as soon as possible, if they haven’t been already, to reflect the new regulations. If they are only amended at the time of an issue arising, a council will have to wait at least 20 days before an Independent Panel can be appointed and a hearing held
Suspension – the IDC should be given the delegated authority to suspend a statutory officer (in urgent cases the terms and conditions suggest the chair of the Employment Committee).
To suspend or not to suspend?
The issue of suspending statutory officers remains a vexed one. To an extent, a council will always be ‘damned if they do, damned if they don’t’. On the one hand, suspension shows that the council is taking the issue seriously and is carrying out a full investigation. On the other hand, as a recent report in the national press brought attention to, suspensions can often last many months or even two or three years and lead to criticisms that the individual is receiving full pay from the public purse for doing nothing.
In our experience, the key question when considering whether or not to suspend is: will the investigation be hampered if the individual remains in place at work? If it will, that is a compelling reason to suspend.
Other issues Councils also need to think about issues such as identifying suitable Independent Persons for this role and member conduct; training for them and members of the Employment Committee/IDC; and communications issues including dealing with media attention.
There are many difficult pitfalls which mean that councils need to be actively considering whether they are equipped for the task should it unfortunately arise.
A guest blog by Sarah Lamont, employment law partner, Bevan Brittan LLP