Exit Packages for Metropolitan Police Service (MPS) Staff

Report: 4
Date: 16 January 2009
By: the Chief Executive

Summary

At the full Authority meeting on 27 November 2008 it was agreed that a paper would be brought to the Remuneration Sub Committee on the approach taken to exit packages for MPS staff.

A. Recommendations

That Members are invited to consider the paper and agree the approach set out in paragraphs 23 and 24.

B. Supporting information

1. The Remuneration Sub Committee (RSC) is responsible for holding the Metropolitan Police Service (MPS) to account for all human resource issues in respect of senior staff and carrying out, on behalf of the Metropolitan Police Authority (MPA), the Authority’s statutory responsibilities in this regard. The terms of reference for the RSC have been agreed by the Full Authority and include:

“To consider and agree the terms, conditions and benefits, including early retirement and redundancy, to be offered to ACPO ranks up to and including Commissioner.” and
“To determine recommendations from the Commissioner about the pay and terms and conditions, including early retirement or redundancy, for senior police staff (SPS) in pay band 4 and above.”

ACPO rank police officers

2. Police authorities are responsible for the appointment of ACPO ranks (chief constable, DCC and ACC and equivalents) under sections 11(1), 11A and 12(2) of the Police Act 1996, subject to the approval of the Secretary of State and regulations made under Section 50 of the Police Act 1996 (Secretary of State’s determinations). Candidates should have successfully completed the police service’s Strategic Command Course (SCC).

3. Appointments to the Metropolitan Police Service (MPS) are governed by sections 9B to 9G of the Police Act 1996, as inserted by the Greater London Authority Act 1999; appointments to the City of London Police are governed by the City of London Act 1839.

4. Senior officers at Deputy Assistant Commissioner or equivalent (and above) are awarded a five year Fixed Term Appointment (FTA). Those officers with an FTA may wish to seek an extension.

5. The agreement reached by the Police Negotiating Board (PNB) regarding FTA extensions came into force on 1 July 2006 via the Police (Amendment) Regulations 2006. Regulation 2 of the Amendment Regulations amended Regulation 11 of the Police Regulations 2003 states that an appointment for a fixed term may be extended, by agreement of the police authority and the person appointed, for a further term of a maximum of three years and for subsequent terms each of a maximum of one year, provided that any extension or subsequent extension which is due to expire more than one year after the expiry of the original fixed term shall required the consent of the Secretary of State.

6. The means of dispensing with the services of a senior police officer is covered by Part 3 of the Police Reform Act 2002. These processes are extremely lengthy, extremely detailed and very prescriptive in terms of possible outcomes. A brief explanation is outlined at Appendix 1.

7. It can be seen, therefore, that the relationship between senior officers and the police authority is heavily regulated by statute. The statutory provisions leave little room for a ‘contract of employment’ to be established, whether as matter of express agreement, or implied.

8. This applies particularly to monetary benefits. As for non-monetary benefits, the MPA do have powers to make payments if they are reasonably incidental to the MPA’s power under section 6(1) of the 1996 Act (‘Every police authority established under section 3 shall secure the maintenance of an efficient and effective police force for its area.’) A copy of a typical set of ACPO terms and conditions is attached at Appendix 2.

9. A number of these terms and conditions are not in the Regulations themselves, but they are arguably ‘reasonably incidental’ to the MPA’s section 6 powers, as they assist senior police officers in the better performance of their duties: e.g. ACPO subscriptions, private healthcare.

10. As for the terms of appointment that impose obligations on senior police officers, to the extent that these are reasonably incidental to the MPA’s section 6 powers, then they are also enforceable. For example, the prohibition on senior police officers from engaging ‘in any other occupation or profession or business or work, whether paid or unpaid, for any other organisation, company, firm or person without the written permission of the Chief Executive.’ This is the kind of provision that could be said to be ‘reasonably incidental’ to the section 6 powers.

Senior police staff

11. For senior police staff, there are contracts of employment that are ‘open ended,’ i.e. not FTAs. Senior police staff are subject to the normal employment laws that govern the majority of such employment contracts, including discipline and conduct matters.

12. In order to dispense with the services of a member of the senior police staff, the matter would need to be considered by a disciplinary panel, which would include the right to representation and the right to appeal the decision internally and externally, i.e. through an Employment Tribunal with a claim of unfair or constructive dismissal.

Monetary and non monetary benefits

13. For police officers there are no effective means of agreeing a departure by mutual consent with his or her police authority. Where an officer has accrued sufficient pensionable service to provide an entitlement to a full pension. there is no means, within any Regulations governing the police service, for a police authority to provide an additional financial incentive for an officer to retire.

14. In such circumstances the favoured option is a legally binding compromise agreement. These provide that – in normal circumstances – there is a severance payment, in return for which the individual agrees not to pursue any claim to an Employment Tribunal. Quite often, the compromise agreement will also deal with the notice element in any terms and conditions or contract of employment, and may provide for a "payment in lieu".

15. Employers are now increasingly using compromise agreements as a mechanism for preventing possible future complaints to a tribunal.

16. The compromise agreement will state the full breakdown of the payments to the individual and the extent to which the sums will be paid free of tax. Usually, up to £30,000 compensation can be paid without deduction.

17. The compromise agreement will also provide for confidentiality both in terms of the employer’s business and also of the terms of the agreement. The compromise agreement will also confirm the existing post-termination restrictive covenants and provide for other incidental costs as outplacement services, legal fees etc.

18. Finally there will be a long list of statutes in the compromise agreement (such as the Race Discrimination Act, Sex Discrimination Act, Employment Rights Act) and many more, under which the individual will agree not to bring a claim. This is because the compromise agreement is intended to be in full and final settlement of all claims but the employer needs to list these to ensure the agreement can be enforced.

19. For senior police staff the Principal Civil Service Pension Scheme (PCSPS) does contain a number of flexibilities through a range of redundancy options under section 139 of the Employment Rights Act 1996.

20. There are effectively three options – voluntary redundancy, an invitation to accept redundancy or compulsory redundancy. In the latter case this may also involve a compromise agreement.

Procedure

21. For both senior police officers and senior police staff the approach of the Authority in determining exit packages is the same, i.e. to facilitate the departure of the individual in a fair, dignified and legitimate manner at a fair and reasonable cost to the organisation. The only way an employer can be sure that an individual will not complain to a tribunal is effectively to persuade them to sign away their right to do so. This can be done in a compromise agreement and has the effect of turning the exit package into a "full and final" settlement of any claims the individual has against the employer.

22. There are a number of factors involved, including the risks of not achieving an agreement. These risks can include reputational damage, organisational damage, and financial cost (both in terms of defending any future claim and potentially the often significant additional costs if a case is lost.) Timing or timeliness can also be a significant issue in such cases.

23. If there is any learning from recent high profile cases it is that Members making decisions around these cases, either as part of an urgency procedure or at an appropriate Committee meeting, need to:

• Have sufficient information to understand the underlying issues;
• Have sufficient information to understand the justification for the proposed course of action;
• Have a clear awareness of the potential risks;
• Have unambiguous legal advice;
• Have a clear understanding of the potential financial costs if a case is defended and / or lost;
• Have an appreciation of the reasons given for the approach taken e.g. particularly if there is a financial risk.

24. In all such circumstances it is recommended that the Authority should consider approaching the District Auditor for a view on the approach being taken and the proposed remedy or remedies before such agreements are finalised and voluntarily refers such cases to the District Auditor after the event. This will ensure Members and the public can be satisfied that the Authority’s actions have been subject to independent scrutiny.

C. Race and equality impact

There are no direct equality and/or diversity implications as this paper is concerned primarily with setting out the background and processes to exit packages.

D. Financial implications

There are no direct financial implications arising from this report as this paper is concerned primarily with setting out the background and processes to exit packages not an exit package itself.

E. Background papers

None

F. Contact details

Report author: Alan Johnson, Policy Officer, Human Resources, Metropolitan Police Authority (MPA)

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

The means of dispensing with the services of a senior police officer

Senior police officers conduct have to be considered by the Authority under the provisions of the Police Reform Act 2002 and the Police (Conduct) Regulations 2004 which together provide the procedural framework for dealing with “conduct matters” which are defined as follows:

any matter which is not and has not been the subject of a complaint but in the case of which there is an indication (whether from the circumstances or otherwise) that a person serving with the police may have committed a criminal offence; or behaved in a manner which would justify the bringing of disciplinary proceedings.

The Regulations provide that:

where a police authority receives a report, complaint or allegation which indicates that the conduct of a senior officer did not meet the appropriate standard, it must refer the matter to an investigating officer, unless in the light of any preliminary enquiries it may make it decides that no disciplinary proceedings are necessary.

In other words, there is a presumption in favour of investigation, unless it appears at the outset that even if the allegations were found substantiated there would be no need for disciplinary action. Reference to the “appropriate standard” of conduct is to the standard defined in the Police Code of Conduct. In both cases, it appears that Code 1 (honesty and integrity), and Code 12 (general conduct) are potentially engaged.

If a matter is a conduct matter, then in certain circumstances it must be recorded as such and referred to the Independent Police Complaints Commission (IPCC) (e.g. if a serious crime is involved), and in any case the MPA has a discretion to refer it to the IPCC if the matter is especially grave or there are any exceptional circumstances. If a matter is referred to the IPCC they must then decide if it should be investigated and they may investigate it themselves.

Under the Regulations, the MPA has power to suspend a senior officer in certain circumstances where there is suspicion of misconduct. This has to be approved by the IPCC.

Senior police officers are not considered employees for the purposes of employment legislation and could not, for example, pursue a claim of unfair dismissal.

Resignation in the interests of efficiency and effectiveness (Section 30)

This section extends existing powers in the Police Act 1996 to call on senior officer to retire in the interests of efficiency or effectiveness, to allow for officers to step down by way of resignation.

Procedural requirements for removal of senior officers (Section 31)

This section requires that where a police authority exercises its powers to remove a chief officer in the interests of efficiency or effectiveness it must give the officer concerned its reasons for removal in writing and afford him or her the opportunity to make representations in person at a hearing.

Suspension of senior officers (Section 32)

This section introduces a new power for police authorities, on their own initiative or when required to do so by the Secretary of State (for the latter of which, see also section 33), to suspend chief officers who are or may be called on to retire or resign in the interests of the efficiency or effectiveness of their force. As a safeguard against arbitrary or unfair use by the police authority, the approval of the Secretary of State is required.

Removal etc. of senior officers at the instance of the Secretary of State (Section 33)

This section sets out revised powers for intervention by the Secretary of State. He will be able to require a police authority to call on the chief constable of a force outside London or the Commissioner or Deputy Commissioner of the Metropolitan police to retire or resign in the interests of efficiency or effectiveness. When exercising this power the Home Secretary must give the officer concerned an explanation in writing of the grounds for removal and afford him or her an opportunity to make representations to the inquiry that must be established under section 42 of the Police Act 1996.

Regulations concerning procedure for removal of senior officers (Section 34)

This section introduces a regulation-making power in respect of procedural matters in the hearing of representations and other aspects of proceedings taken under the 1996 Act’s powers to call on an officer to retire or resign in the interests of efficiency or effectiveness. The Home Secretary is required to consult before making any regulations.

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