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PMS agreements, employees and restructuring


Personal Medical Services (PMS) agreements were sold as a way of delivering freedom to practice with providing service tailored to meeting local needs. Review of PMS contracts was due to end in March 2016 but many reviews seem to have already been completed.   So what should you do if there's less money available to your practice as a result?

With approximately half of GP practices in Sheffield holding PMS contracts, this is a live issue.   PMS contract holders may have hoped such contracts would free them from a certain amount of box ticking and red tape only to now find that correction payments enjoyed are set to reduce, albeit over a period of time. Or, you may find yourselves having to apply for recommissioning or still awaiting the outcome of a review of local PMS agreements to see if and how any surplus will be redistributed.

Depending how long a PMS contract has been in place, the business reason for your original contract may have changed. The service initially provided as a result of the PMS funding may have altered and the staff hired to carry out that contract may have changed partially or entirely or “evolved” into what are now totally different roles.  Reducing payroll overhead will often by a key cost cutting consideration.
 
Generally, the term “redundancy” is used to describe circumstances where numbers of employees may need to be reduced within a practice or at a particular site, job role or function. Economic pressures forcing staff reduction or changes to the type of services being provided by a practice, can all fall within the legal definition of a redundancy situation. Similarly, reorganising existing roles, maybe to get more out of a certain grade of nurse for example, can also amount to a redundancy situation as can moving premises. If the number of roles needs to be reduced or if changes need to be made to roles as a result of PMS contract withdrawal, then a practice shouldn’t have too much difficulty in justifying that it has a genuine, and potentially fair reason for carrying out staff reductions because of redundancy. Employment Judges won’t generally interfere with an employer’s decision to carry out a redundancy process nor do they look too closely at the facts as to why a redundancy situation arose in the first place.
 
So, how do you lose large sums of money without it having a catastrophic effect on your practice?  Well, even if you’re not planning on actually going as far as dismissing any staff because of redundancy, the consultative nature of the proper, legal, restructuring process can be a very useful business tool. And remember, even changing how some parts of an employment contract work on the ground, can amount to a “redundancy” so caution is urged.
 
The first key to success is in very careful discussion, planning and handling by the partners and practice manager before any consultation with staff is even started. Missing out this crucial first detailed step, or failing to work as a consistent team can be the downfall of a practice.
 
Before starting your formal process it may be useful to analyse your existing GMS and PMS contracts to see whether dismissals might be avoided. Can existing roles be restructured without fundamentally changing those roles? If you decide to work more strictly to existing contracts, (being paid for work specifically done under their terms rather than all the work that might be needed,) will this mean that costs can in fact be saved? Are there any new contracts anticipated locally that might be applied for? Do you really need all of the roles all of the time or can some become part-time?  Should new roles be created which  open up and support alternative funding streams such as teaching or travel medicine? Is your smoking clinic really paying for itself?

Once you’ve been through a careful initial business planning stage with key staff, the consultation process may be rolled out in an organised, choreographed and legally fair way.

All practices are different and the reorganisation and redundancy plan needed for change will be different for each affected practice. You will almost certainly benefit from taking advice early on.
 
Getting the planning stage right in a business and legal sense doesn’t detract from practices and individuals continuing to be empathic and caring. In fact, quite the opposite. Careful planning before change, with proper, experienced, guidance means that your GPs will be more confident and less likely to be lobbied by individual staff perhaps trying to promote interests which might not necessarily fully align with the healthy future of the practice or which might be a distraction at a time when change needs to be sensitively handled. Having a better plan means that when you do start consulting with staff about change, you can more easily control the process, and also hopefully, the direction of the practice going forwards without stepping on legal landmines.
 
If you are affected by any of these issues, or have questions about redundancy, restructuring or personnel issues generally, please contact Joan Pettingill, GP Practices Sector Leader &  Director of Employment Law on joan.pettingill@luptonfawcett.law or on 0114 228 3252  or any of our GP Practice Business Team.

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