Nhs Pension Scheme · CAS-29847-X2X0

CAS-29847-X2X0

Ombudsman’s Determination

Applicant Mr R

Scheme NHS Pension Scheme (the Scheme)

Respondents East London NHS Foundation Trust (the Trust) NHS Business Services Authority (NHS BSA)

Outcome

Complaint summary

1 CAS-29847-X2X0 Background information, including submissions from the parties

“I am pleased to confirm your Bank start date with effect from 1 April 2017. Your payroll paperwork has been processed and sent to Payroll under Assignment number 26585307. Your line manager [Ms K] will complete details of your shifts directly into [the timesheet system]…and you will be paid accordingly.”

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• Mrs R was included in the Trust’s payroll, on a 'Bank worker contract' but she was not an employee at the time of her death. She had not yet been issued with an employment contract. She was a Bank worker/contractor and was only placed on the Bank to comply with IR35.

• Some self-employed contractors are afforded access to the Scheme. However, they must be a qualified General Practitioner, General Dental Practitioner, or Ophthalmic Medical Practitioner.

• The Secretary of State was responsible for the Scheme and an employer could not decide if death benefits were payable. Even if an employer had incorrectly included an individual into the Scheme and collected employee contributions that person was not entitled to Scheme membership.

• It was unclear if the Trust’s long-term intention was to offer Mrs R a contract of service. However, as she was not an employee at the time of her death, she did not meet the requirements for an 'Officer' under the Scheme.

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• Post 1 April 2017:

- Paid an hourly rate of £35.16. - Paid through a payslip for Mrs R (not AHTC). - Contribution refund payment was made to Mrs R’s estate (not AHTC). - Extra hours would have been paid at hourly rate if worked.

- Paid a day rate of £315.83. - Paid against invoices raised by AHTC. - Payment was made to AHTC. - No scope for extra hours worked as this was included in daily rate.

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“These are further examples of the uncertainty and confusion at the Trust and misunderstanding [sic]. It is likely that the Trust moved [Mrs R] from contractor to Bank employee with attendant Staff Appointment Forms, without understanding the implications. Only after [Mrs R’s] death have the implications of moving her ‘to the Bank’ become clear. Since then they have struggled unsuccessfully to reconcile their contradictory positions and those of their partners. Their lawyers have tried to create an explanation to which the Trust is now committed but it all remains confused and unproven.”

Adjudicator’s Opinion

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• There was no verifiable evidence or a contract to prove that Mrs R was a contractor from 1 April 2017.

• Mrs R signed the Staff Appointment Form and other documents as an “Employee” and two forms were countersigned by Ms K, confirming this. These forms were correct and appropriate as the Trust did engage Mrs R as an employee from 1 April 2017.

• There was no evidence that the position of ‘self-employed contractor through the Bank’(IR35 contractor) existed or that the Trust made any changes to deal with IR35. The Trust’s simple solution to get Mrs R ‘onto payroll’ was to employ her as a Bank worker for the remaining few weeks, unaware of the implications for the Scheme.

• There was no evidence that Mrs R was ever engaged as a ‘Spot Contractor.’ The HR Information document stated she was Interim Head of Information Governance, Band 8b.

• For five months, the Trust and NHS BSA maintained that Mrs R was an employee (a Bank worker) and was correctly enrolled in the Scheme. Only after a telephone conversation, in late October 2017, did NHS BSA change its opinion of her status and the Trust followed suit immediately.

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Ombudsman’s decision

I have considered the submissions made by all parties. I note Mr R’s concern that the Trust required Mrs R to sign a Staff Appointment Form, appointing her as an employee, and then enrolled her in the Scheme, only for this to be reversed after she died unexpectedly. However, the Staff Appointment Form that Mrs R signed was not conclusive evidence of a contract of employment. The Trust did not countersign it or issue a contract to Mrs R, offering her employment with the Trust, which she signed and accepted in return.

IR35 created a new situation and the Trust, from its evidence, had to act quickly to comply with the Regulator’s guidance that all contractors engaged through a personal services company should be paid with tax deducted through PAYE. As the Trust required Mrs R’s services for a further period of six weeks, it decided to use the Bank to deduct tax from Mrs R’s earnings to continue her engagement. The Trust did not have a Bank worker or contractor agreement in place at the time, so for convenience, the Trust used the “Staff Appointment Form”. Although Mrs R was engaged via the Bank, she continued her role as before, in other respects. Her wage slip showed she was paid a daily rate as a “spot contractor” not a salary, and the only difference was that her earnings were paid net of tax.

Although the Trust maintained that Mrs R was an employee for seven months, this did not make Mrs R entitled to benefits from the Scheme. She had to meet the criteria to be an eligible member of the Scheme, to be entitled to such.

The requirements for membership of the 2015 section of the Scheme are set out in regulation 18 of The National Health Service Pension Scheme Regulations 2015 (the 2015 Regulations). ‘Membership’ at paragraph (1)(a) states that a person is eligible to join the Scheme if they are “employed” by an NHS organisation or, pursuant to

11 CAS-29847-X2X0 paragraph (1)(b), they are a “medical contractor” or “medical practitioner”. Extracts from the 2015 Regulations are set out in Appendix 2.

1 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National

Insurance [1968] 2 QB 497. 12 CAS-29847-X2X0

Directions

Anthony Arter

Pensions Ombudsman 25 November 2020

13 CAS-29847-X2X0 Appendix 1 IR35 Tax Legislation (IR 35)

Chapter 8 Part 2 (ss 48-61) Income Tax (Earning and Pensions) Act 2003

NHS Improvement Guidance

Working through intermediaries: IR35 update February 2017

Working through intermediaries: IR35 update May 2017

Updated guidance to NHS providers

14 CAS-29847-X2X0 Appendix 2 The National Health Service Pension Scheme Regulations 2015

Regulation 18

Membership

“(1) Subject to regulation 19, a person is if the person is a health service worker and is—

(a) employed by an NHS organisation listed in Part 1 of Schedule 5;

(b) an individual who is a medical contractor, or who is employed by a medical contractor or dental contractor, listed in Part 2 of that Schedule;

(c) an individual who is employed by an independent provider in circumstances described in paragraph (4).

(d) an individual who is a medical practitioner or dental practitioner listed in Part 3 of that Schedule; or

(e) who is employed by a determination employer: see Part 4 of that Schedule.

(2) Subject to regulation 19, a person is eligible to join this scheme if the person is—

(a) an individual of a category or description listed in Schedule 6; and

(b) a person in respect of whom the Secretary of State has made a determination under section 25(5) of the 2013 Act.

(3) Where such a determination is made, these Regulations apply to the person subject to any modification made by the Secretary of State by direction under section 25(8) of the 2013 Act.

(4) The circumstances are that the person—

(a) performs services pursuant to an approved qualifying contract (see regulation 150(3)); and

(b) satisfies the wholly or mainly condition (see regulation 150(4)).

(5) In paragraph (1), the reference to a person being employed does not include a reference to a person engaged under a contract for services.

(6) Where, in relation to a single employment or engagement for provision of services, a person is eligible to join this scheme by virtue of more than one of the sub-paragraphs of paragraphs (1) or (2), the scheme manager must determine which one sub-paragraph is to be used as the basis for membership.”

15 CAS-29847-X2X0 Appendix 3 THE TRUST STAFF BANK HANDBOOK Temporary Staffing 2011

Selected Extracts

“The purpose of the Trust Staff Bank …is to provide temporary cover to wards and departments, often at short notice, to cover for planned and unplanned shortfalls in staffing.

Staff registered on the Bank include:

• Nursing Assistants Admin & Clerical Family Planning Nurses

• Staff Nurses Consultant Psychiatrists General Practitioner’s

• Community Nurses Junior Doctors District Nurses

• Psychologists Allied Health Professionals Health Visitors

• Sessional workers Phlebotomists School Nurses

The Bank Office will also directly engage agency staff on behalf of wards/departments if it is unable to provide cover.

A GUIDE TO WORKING ON THE STAFF BANK

The following guidance is issued to assist staff in the course of their employment on the Staff Bank. It should be read carefully in conjunction with the Bank Membership Agreement.

General Terms of Bank Registration

The terms set out govern your membership of the Trust Staff Bank. Each period of engagement as a member of the Staff Bank will constitute a separate engagement (here in referred to as the ‘booking’). In periods between such engagements there are no subsisting obligations on the Trust or on you as a member of the Bank. Although you may remain a member of the Bank between such periods of engagement the Trust will be under no obligation to offer you work nor are you under any obligation to accept work.

You will be asked to complete and sign a Staff Appointment Form and you will be asked to decide whether you wish to join the Pension Scheme. Employees will automatically be entered into the Pension Scheme unless you make a formal request to opt out by completing form SD502.

Pay Day

You will be paid weekly, one week in arrears by credit transfer to a nominated bank or building society account on a Friday.

16 CAS-29847-X2X0 Roles and Responsibilities

Your duties and responsibilities will vary according to the shift/job being covered and these will be explained to you in advance of any agreement that you accept. Your main responsibilities are to provide a skilled and sensitive clinical and/or administrative service, which provides personal assistance emotional and physical care to patients and service users.

On a day-to-day basis, you will be professionally accountable to the ward/department manager where you are undertaking the booking. You will also be responsible to the Trust Staff Bank Manager.

Hours of Work

You are required to attend work punctually and regularly. Your normal working hours will be dependent on a booking being agreed and your availability to work. Failure to attend shifts without reasonable explanation may result in your removal from the bank.

Procedure for obtaining work on the Staff Bank

All staff who are registered with the Bank Office are required to inform the relevant Staff Bank Officer of their availability to work via telephone or e-mail on a regular basis. Once received, the Staff Bank Officer will note your availability to work and put you forward to fill bookings that have been requested by Trust managers (or designated deputies ).

Bank Timesheets

The Bank working week runs from Friday to Thursday, as reflected in the timesheet. Only one timesheet should be used per week in each location that Bank work is undertaken.

Bands that Staff claim when working Bank

Staff will be paid at the standard rate of a band as set by the Bank office. For substantive staff, this may not be their substantive band and pay point.

Where a bank shift requires a member of staff to work on a lower band, they will be paid on the standard band that needs to be covered, for example if a band 6 substantive nurse is required to cover a band 5 post, they will be paid at the standard rate of a band 5.

Working Time Regulations 1998

In compliance with the Working Time Regulations 1998 (WTR) no member of staff, may work more than 48 hours a week on average whether substantive staff or Bank staff unless they have signed the Individual Working Hours Agreement form. The above will also apply to staff who entered substantive employment contract with the Trust (inclusive of both normal and Bank work).

All Directorates

Substantive staff on Bank are not entitled to Bank annual leave allowance. It is the responsibility of staff who are substantively (permanently) employed by the Trust to ensure that they take a minimum of 28 days annual leave per year (pro-rated for part-

17 CAS-29847-X2X0 time workers). During the annual leave period you agree not to undertake bank/agency work or duties within the localities of the Trust or with another organisation.

Mandatory Training

All Bank Staff are required to attend mandatory training before they commence work on Bank. Substantive staff should have already completed the required training when they attended induction but need to ensure it is kept up to date.

In addition to this, Bank-only staff will receive a Trust Induction booklet outlining Health and Safety, Information Governance, Equality and Diversity, Safeguarding Children and Introduction to Safeguarding Adults.

Period of Notice

Due to the sessional nature of working on the bank, there are no formal periods of notice applicable to or from either party. If you decide to leave your employment permanently with the Staff Bank, you should do so in writing to the Trust Staff Bank Manager. On leaving the Trust you must ensure that you return all Trust properties. This includes keys, ID badge, documentation, etc. If you do not do so, your final payment may be delayed.

The Bank Office periodically reviews its register of Bank staff. If you do not undertake any work for a continuous period of 12 months then you will be terminated with immediate effect and issued a P45. You will be required to undergo the full recruitment process should you wish to re-join.”

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Staff Appointment Form

Section A Compliance with Working Time Directives

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20 CAS-29847-X2X0 Appendix 5 Assumptions submitted by Mr R.

• An application for her to join the Scheme was included with these forms and she completed it.

• There was no endorsement on the Staff Application Form to indicate that it was being used temporarily to induct contractors and, in that form, Mrs R was never referred to as a Contractor after 1 April 2017.

• The HR Information form stated that, from 1 April 2017, her job title was Interim Head of Information Governance, Band 8b.

• An email from the Trust on 4 April 2017 confirmed that she “had a Bank start date of 1 April 2017.”

• Her Line Manager confirmed in an email on 22 May 2017 that the Trust had “agreed to put her on the Bank … this was extremely problematic.” This was clearly not simply a mistake or clerical error.

• The Trust provided no evidence that it had a policy or procedure providing for any employment status of “IR35 Contractor” or similar.

• The Trust stated in a letter to NHS BSA on 26 July 2017 that “…. Mrs R then joined the Trust Bank and the Scheme on 1 April 2017” and then “The Trust position is that Mrs R was on the Trust’s Employee Staff Records System (ESR) as a Bank Worker between 1 April 2017 and 12 May 2017.”

• The Trust maintained from 1 April 2017 to 27 October 2017 ( seven months) that Mrs R was an employee and therefore entitled to Scheme membership.

21 CAS-29847-X2X0 • The Trust advised NHS BSA on 20 October 2017 that “it paid for an NHS payroll service then it was up to the Trust whether Mrs R’s earnings were pensionable” as the Trust had employed her.

• NHS BSA refused without due cause to accept that the Trust was the authority for Mrs R’s employment agreement and therefore status.

• The Bank Handbook states explicitly on page 3 “ Casual staff such as Bank Workers are regarded as being in pensionable employment if they are at work and paying into the Scheme. Mrs R fulfilled both conditions.

• On 4 September 2017, NHS BSA’s CEO confirmed to Mr R’s MP that “We have determined that she was correctly a member of the 2015 section of the Scheme and have advised her employer accordingly.”

• In October 2017, the Trust accepted advice from NHS BSA who in turn accepted the same advice from NHS payroll that said, in their opinion, Mrs R was a contractor and gave five reasons for their opinion, which were without merit. The Trust, NHS BSA and NHS payroll had no legitimate reasons for categorising Mrs R as a contractor from 1 April 2017.

• These assumptions show that the Trust, as Mrs R’s employer and party to her employment agreement, regarded her as an Employee (Bank Worker) from 1 April 2017 and therefore she was entitled to join the Scheme.

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