Fit and Proper Persons Test: A further analysis

Background

This blog follows on from our Newsflash last week, which provided an update on the Government announcement that the Fit and Proper Persons Test ( “the FPPT”) will come into effect for all directors of NHS bodies from October 2014, and for all other CQC registered bodies from April 2015. If you missed this newsflash, which sets out the current draft provisions, click here to view it. The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 are due to come into effect In October 2014 and include not only the requirement that directors of NHS Bodies meet the fit and proper person test, but also the duty of candour. An FPPT is not novel. foundation trusts are required to ensure that Governors and Directors meet Monitor’s FPPT test as part of their licence. However the Monitor test is less demanding than the test under the Regulations. For example there is no equivalent to the restriction in appointing individuals who have been involved in serious mismanagement. It remains to be seen if Monitor amend their test to bring it into line with the FPPT contained in the Regulations

Who is responsible for ensuring compliance?

The Regulations place the burden on employers to ensure that any person who is appointed as a director or who fulfils the role of director meets the FPPT. The Regulations appear to apply not only to executive and non-executive directors, but also to individuals who may act up into these roles.

Will it make much difference?

Probably not. The FPPT is generally a list of factors which most employers would consider on recruitment anyway. Does the candidate have the right qualifications and skills? Are they fit and healthy to do the role (after any reasonable adjustments are made)? Have they been made bankrupt (or similar)? Have they committed any acts of serious misconduct or mismanagement? Some elements could be considered vague such as being responsible for serious mismanagement. The CQC is expected to produce guidance on this issue, but issues such as this may be expected to be discussed in interview anyway.

Can the CQC require a trust to dismiss a director?

There is no power in the Regulations enabling the CQC to remove a director. The method of enforcement will be for the CQC to impose conditions on the registration of the provider requiring the removal of the director. A failure to comply with the condition will be an offence.

The Director disagrees with the CQC assessment that s/he is an unfit person

Unlike the original draft of the Regulations, there is no clear mechanism for challenging a decision. If it is the case that an individual has no right under the Regulations to contest a finding that they are unfit, the individual may be forced to adopt a more litigious approach such as judicial review.

Should a trust amend its employment contracts?

This is something we would recommend. There would be value in making it clear in the employment contract that a finding of unfitness is a ground for dismissal without notice.

Will a trust who dismisses a director be faced with an unfair dismissal claim?

It is likely that a trust will have a potentially fair reason for the dismissal of a director who has been found to be unfit. The question will then be has the trust adopted a fair procedure? This will depend on the particular circumstances, but may well require an employer to look at alternatives to dismissal or possibly taking steps to clarify a decision of the CGC as part of a fair process.