As part of the government’s response to the Francis Report, it will be a requirement for healthcare providers to ensure that their directors are “fit and proper persons”.
Healthcare organisations will already have checks in place to ensure that inappropriate people are not employed or appointed into senior roles. In addition, for foundation trusts, Monitor has a similar but less onerous requirement under the conditions of the provider licence.
This change does, however, impose a new and important requirement, particularly as the Care Quality Commission (CQC) been given responsibility for enforcement. The CQC has just published guidance on the regulations.
The regulations are in force for all trusts and foundation trusts as of 27 November 2014, with all other regulated providers of health and social care being covered by the new rules from early April 2015.
In this article we consider the nature of the requirement, how it will work in practice and the actions organisations need to take to ensure that they comply.
What is the requirement?
Providers cannot appoint, or have in place, an individual unless they:
- Are of “good character”
- Have the necessary qualifications, competence, skills and experience
- Are healthy enough (with reasonable adjustments in place if necessary) to perform their role.
In addition the individual must not have been responsible for or involved in any serious misconduct or mismanagement in the course of carrying out a regulated activity.
They can’t be bankrupt, on a barred list or have a legal impediment that would stop them from taking the role.
The employer must take into account any criminal convictions and removals from any professional register but these factors are not absolute barriers to appointment.
Who is included in the requirement?
The obligation applies to directors and “equivalents”. The CQC guidance says that this will be limited to executive, non-executive, interim and associate directors only. Governors will not be included unless they sit on the Board.
How will it be enforced?
The CQC is responsible for ensuring that organisations comply with the new duty. It also has the power to impose conditions on a provider’s licence to ensure that the organisation takes action to remove a director who is not fit and proper.
The CQC’s guidance states that it will require chairs to confirm that all newly appointed directors have been assessed and to declare that they are satisfied that the individuals are fit and proper persons.
This is likely to be after an offer has been made to the individual. In addition, where the CQC becomes aware of concerns about existing directors, it may require the chair to provide a similar assurance. There is, however, no obligation for the chair to confirm that directors currently in place, before the regulations come into force, are fit and proper persons unless requested by CQC.
If an organisation becomes aware that a director is no longer able to satisfy the fit and proper person requirement, it must take such action as is necessary and proportionate to ensure that a fit and proper person takes up the role and that, if the director is registered, that their regulator is informed.
What practical steps should organisations take now?
Providers need to plan how they are going to regularly review the fitness of directors. The obvious opportunity to review fitness would be at appraisal but organisations may want to put other reviews in place.
The CQC guidance does not set out specific steps but makes it clear that the provider should ensure that “…all available information is sought to confirm that the individual is of good character”. That will mean checking for criminal convictions where possible and, where appropriate, checking professional registers. Most directors will not qualify to have a standard or enhanced Disclosure and Barring Service check. We expect the CQC to issue further guidance on how checks are to be carried out in due course.
Where these checks disclose potential concerns, the provider should record why they have decided to appoint notwithstanding those concerns.
In addition, providers need to ensure that they assess and check that an individual has the appropriate qualifications, experience and competence for the role to which they have been appointed. In most cases this duty will not mean more work for the provider as these assessments and checks should already be in place to ensure quality of delivery. Similarly, the requirement to ensure that a director is healthy enough to perform the role, is something that employers would usually check as well.
The regulations also set out in schedule 3 a list of specific information about a director that the CQC could require from the provider (e.g. proof of ID and evidence of previous employment).
Where concerns are raised about a director, providers need to ensure that they have processes in place to investigate and respond to those concerns.
What action can a director take if they are removed?
A provider may decide that a director is no longer a fit and proper person. At this point providers should notify the CQC. The CQC will liaise with the chair of the organisation on what action needs to be taken.
Providers should check their constitutions for how a director can be removed as an office holder and ensure, that they have also considered whether the removal also brings their employment to an end. If it does not, a separate employment process may need to be followed.
Where the CQC requires the removal of a director there is an appeal process. Appeal will be to the first tier of the health and social care chamber. This is significant because these hearings are usually held in public.
Ultimately, if the CQC tells a provider to remove a director, the provider is likely to have a good defence against any unfair dismissal challenge.
In principle, a director could also challenge the decision of the CQC that they were not a fit and proper person by way of judicial review. This is an expensive and time-consuming process but may be an option for someone removed in this manner.
Will it make a difference?
Providers should already have checks in place already to ensure that they appoint directors who are fit and proper, but the regulations introduce a formality and an opportunity for external (CQC) scrutiny. In addition, it will make it harder for directors who have been removed from one provider to move into a similarly senior role with another as CQC will maintain records of concerns and removals.
Click here to read our other newsbrief articles on on alliance contracting, primary care and the Mitchell Judgment.