Independent sector treatment centres - Structured secondment and retention of employment
Central Consultants and Specialists Committee
September 2005
Introduction
Independent sector treatment centres (ISTCs) are being established in a number of locations across England to provide services for NHS patients. By the end of 2005, it is anticipated that approximately 34 centres will be operating. These ISTCs are run by independent sector organisations, either from the UK or based overseas. Some of the centres are single local sites whilst others are part of a chain across the country on several sites.
The work undertaken in these ISTCs is either additional NHS work or, in some cases, is activity transferred from existing NHS trusts. The staff in ISTCs come from a variety of sources including:
- For additional work, staff are being recruited from overseas or, in the first wave, can be staff who are not currently working in the NHS or who have not worked for the NHS in the last six months (see below for wave two).
- For work that is transferred from existing NHS trusts, NHS staff can be seconded to the treatment centre. A national human resources framework has been developed to explain the secondment of staff to ISTCs.
The BMA has argued against this principle of additionality, in particular because it prevents consultants from working for ISTC providers in their spare time when they have legitimately completed their NHS duties. Adjustments have been made to the policy for the second round of ISTC procurement but this restriction remains for the first wave of centres.
The long-term aim is that the professionals and support staff who work in the treatment centres will be sourced and employed in the main by the ISTC provider. However, in many projects, there is a short-term redistribution of existing clinical activity from existing NHS trusts to treatment centres. Because of this, there will be use of NHS staff on a secondment basis in ISTCs.
The transfer of employment risk: TUPE
The overlap between current NHS acute trust activity and ISTC services leads to a concern that there may be an unintended legal effect under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (commonly known as TUPE). The TUPE Regulations are an employment protection measure. In broad terms, TUPE transfers employment, and protects terms and conditions, when the business in which staff work is transferred to a new employer. Under the ISTC programme, TUPE might inadvertently (but automatically by law) transfer the employment of some NHS staff to the ISTC provider. The BMA, NHS employer and the DH believe that it is better for staff to remain employed in the NHS if this is possible rather than have their employment transferred to the private sector. Despite the protections that TUPE offers, on balance, NHS employment is still probably more secure and offers benefits such as the NHS pension scheme.
Retaining staff within the NHS: Retention of Employment
At a national level, it has been agreed between the DH and staff side unions (including the BMA) that attempts should be made to try to keep employed by the NHS those staff who are seconded to work in ISTCs. A model has been developed with the intention of trying to achieve this: the Retention of Employment (RoE) model. This process has been used in other circumstances in the NHS where staff have been transferred to work for private sector providers, whilst retaining their NHS employment. Whilst the model has been used previously, it has not been tested in law.
The intention is to use RoE where there is a risk that a TUPE transfer will take place. There is a risk of this occurring when all, or a significant part, of the consultant’s work moves from the NHS to the ISTC.
How does RoE work?
A process will take place whereby a trust will after a period of consultation inform the consultant that there is a risk that his employment may transfer to the ISTC unless he objects to the transfer. The consultant will object in writing to the transfer. Technically, the consultant’s employment will then end. However, the consultant will immediately be re-employed by the NHS trust on exactly the same terms and conditions of service with continuity of service preserved for all purposes, including pension rights. The consultant will then be seconded to the ISTC.
This is a process that may naturally worry many consultants as in effect, employment ends when there is an objection to the transfer. However, the re-employment would be instantaneous and model letters have been prepared by the DH solicitors to ensure that the process operates smoothly. The intention of RoE is to protect NHS staff so that they remain NHS employees and retain all their terms and conditions of service, including their NHS pension. This is designed to retain people in NHS employment where otherwise they may have TUPE transferred.
Where a consultant will be undertaking a small proportion of their current NHS work in an ISTC (e.g. one or two programmed activities a week for a full timer), the risk of there being deemed to be a TUPE transfer is small and such a consultant would probably not need to go through the RoE exercise.
Consultants appointed by trusts after the transfer of the NHS work to the ISTC has taken place will not need to go through the RoE process and can be seconded to the ISTC from the NHS on their existing terms of service to undertake the work transferred. In these circumstances, there will have been no transfer of activity and therefore no risk of TUPE applying.
BMA position
The BMA has expressed concern about the transfer of activity from existing NHS providers to the independent sector, not least because of the potential impact that this may have on the viability of some NHS trusts. However, given that the transfer of activity is going ahead, the Association is supportive of the Retention of Employment model’s intention of keeping staff employed within the NHS.
There are concerns, however, about whether RoE will achieve its objective. As indicated above, the model has not been tested in law and its success in retaining consultants within the NHS in these circumstances cannot be absolutely guaranteed. It is possible that, despite the intentions of the parties, at some point in the future a court could decide that a transfer had taken place and the consultant would then be employed by the ISTC. Having said that, given that all parties are keen for employment to remain in the NHS, there are limited circumstances in which RoE is likely to be tested as it is unlikely that it will be in the interests of any party to litigate the issue.
Consultants considering whether to undertake work in ISTCs will need to give very careful consideration to their own individual circumstances. As indicated above, if a consultant goes through the RoE process, the intention of all parties is that they will continue in NHS employment. However, there is a risk that this will not happen.
Separately, there is a risk that the longer the secondment continues, the more likely the independent provider may be deemed to be the employer or co-employer (with the acute trust).
ISTCs are approaching the issue of length of secondment in different ways. Some are proposing to take on individual members of NHS staff for the whole length of the contract (i.e. a five year period) whilst others are proposing to rotate staff through the centre for shorter periods (e.g. six months). Whilst some staff would prefer to undertake the same work for a longer period, from the risk of a change of employer point of view, consultants are advised that it may be safer to spend a shorter period of time on secondment.
There are also potential problems that are associated with any secondment arrangements (not just those undertaken under the Retention of Employment model). For example, for consultants there are issues around:
- What happens if things do not work out, for example the consultant does not like the working environment and wants to return to the former role in the NHS
- What happens if there are disciplinary problems? How does the ISTC/NHS relationship work?
- How does the appraisal and job planning process work?
- What will the clinical governance arrangements be in the ISTC?
- What role does the ISTC provider have in the clinical excellence awards process?
- What happens at the end of the provider’s five year contract? Is there an NHS job to go back to?
The risks of working on secondment are also reduced where smaller amounts of work are being undertaken. Clearly, if a consultant was only carrying out one programmed activity per week in an ISTC, the problems associated with the ending of the ISTC contract are much less than if that consultant was working full time. Further, as indicated above, where a consultant would be undertaking a small proportion of their current NHS work in an ISTC (e.g. one or two PAs per week for a full timer), the risk of there being deemed to be a TUPE transfer of the consultant’s employment is small and such a consultant would probably not need to go through the RoE exercise.
Having set out that there are going to be risks associated with any secondment arrangement, consultants also need to be aware that there may also be risks if they turn down the opportunity to work in an ISTC or, having agreed to work in an ISTC, refuse to go through the RoE process.
As emphasised above, consultants will need to consider carefully their own circumstances when deciding on any ISTC secondment opportunities on offer. If, for example, much of a consultant’s elective work is being transferred but there is still plenty of work in their specialty available in the NHS trust, they might consider it safer to stay working wholly in the trust. However, if the transfer of the elective work means that there are limited opportunities available in the trust, the consultant will need to be more cautious about turning down a secondment opportunity, since to do so might risk their continuing NHS employment. Furthermore, in circumstances where a consultant has refused the opportunity to work in an ISTC and there is no work available for them in the NHS trust, they are unlikely to be offered the option of redundancy because the employer will probably argue that they have been given the opportunity of suitable employment in the treatment centre.
The DH and its lawyers are advising NHS trusts that if any employee is to be seconded to work in an ISTC, they must go through the RoE process (apart from where they are undertaking small amounts of work as described above). The DH view is that this limits the risk of an unintentional transfer of a person’s employment to the independent provider.
Future NHS provision
As the provision of NHS-funded health care opens up over the next three years, there will in any event be a much greater degree of uncertainty for traditional NHS providers. The Government is committed to offering patients four or five option for elective surgery by the end of this year, and by 2008, the options will be unlimited as long as providers of care meet Healthcare Commission standards and the NHS tariff rate for a given procedure. Consultants therefore need to be aware that NHS employment generally may as a result be less secure than it has been in the past.
The second wave of ISTCs
As indicated above, the additionality restrictions applied to the first wave of ISTC procurement will be modified for the second wave of treatment centres. The Government’s procurement process for those centres is currently underway and discussions are on-going about the precise detail of the new additionality restrictions.
However, for the second wave the Government has indicated that NHS consultants will be able to work in ISTCs once their NHS duties have been fulfilled and subject to an agreed approval process. When the second wave of centres is introduced, some consultants may therefore want to consider different ways of working in independent sector treatment centres which are set up under the second wave. Structured secondment from the NHS will not be the only option, and consultants may, for example, wish to be employed directly by second wave ISTCs for one or two lists per week or seek to offer services on a self–employed basis.