Lawyers welcome change of tack by Pickles on statutory officer dismissals

Lawyers in Local Government (LLG) has welcomed an apparent change of mind by the Communities Secretary when it comes to there being an independent role in statutory officer dismissals.

Eric Pickles had signalled his intention in November 2012 to axe the requirement for a designated independent person (DIP) to investigate disciplinary cases involving heads of paid service, monitoring officers or chief finance officers.

However, alternative arrangements have now been proposed through the Draft Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014.

It is understood that these revised arrangements would see local authorities set up an independent panel – drawn from the membership of their independent remuneration panels (IRP) – to make recommendations, should the officer call for such a body to be established.

However, councils would only have to take the advice of the panel into account. At present, they have to act in accordance with the DIP’s recommendation. 

In a letter to officials at the Department for Communities and Local Government, LLG President Mark Hynes said: “[We] welcome the change of direction of the Secretary of State in proposing alternative arrangements for an independent role in statutory officer dismissals to the current provisions that he is minded to repeal.

“We would urge, however, that the regulations and standing orders are sufficiently robust to eliminate…. weaknesses…. that would undermine their over-riding purpose of upholding the integrity of local government decision making.”

Commenting on the draft regulations, Hynes said LLG welcomed the separation of the role of investigator and that of independent overseer, “which currently causes some confusion in the current standing order regulations”.

In his letter Hynes highlighted how the proposed repeal of the current regulations had been linked to discussion about the extent and cost of compromise agreements.

He pointed out, however, that the changes would have no effect on those cases where compromise agreements were made to remove an officer where there were otherwise no legal grounds for dismissal. “The number and cost of compromise agreements will not therefore be affected by the changes.”

The letter from the LLG President also highlighted a number of issues with the draft proposals:

• Democratic integrity: The regulations as drafted would diminish the protection afforded to the statutory officers, as the guardians of sound local governance, and that was likely to diminish their ability to discharge their statutory responsibilities.
• The independent role: The proposals that the council must only take the advice of the panel into account, rather than, at present, act in accordance with the DIP's recommendation would weaken the integrity and value of the independent role, Hynes said. He added that the wider discretion on the part of the council to have regard to but not necessarily follow the advice of the panel opened the door to a council dismissing in any event.
• Costs: A consequence of the panel being an advisory committee (and part of the council’s committee infrastructure) was that it might require legal advice in order to inform its own advice to the council. “For the panel to be seen to be independent, it is arguable that such legal advice itself would need to be independent from that being given to the council as part of the investigation process and consideration of the evidence.” This was likely to give rise to additional cost.
• Selection of the independent role: The field of choice would be narrowed to selection from a narrow range of independent persons already known to the local authority, who were appointed for a different purpose, the letter said. “The bolt on approach of transferring the role of DIP to the IRP members is crude,” Hynes said, adding that one local authority’s IRP members had already expressed concern about assuming a different role. The letter said it would be more practical for a council to appoint an independent panel for the purpose as and when required. “It will then have the full market place to select from.”
• The employee’s rights: The current arrangements entitled the statutory officer to have a say in the appointment of the DIP, but the proposed arrangements did not. “This has the potential to diminish the degree of independence of the role. It is arguable that, in the absence of any involvement in the selection by the officer, the panel is less than independent from the officer’s perspective.”
• The structure of the involvement of the independent role: The new proposals would apply when the authority is to consider ‘the proposal to dismiss the relevant officer and the proposed reasons’. Hynes said the timing of invoking the provisions under the draft regulations was far too late. “The independent role is substantially diminished if its involvement is merely at the end of the investigation process rather than from the beginning.” LLG’s President added: “In employment law, the process in making a dismissal decision is as equally important as the merits of the decision itself. The absence of involvement of the independent role during the process may well prejudice the integrity of that process.” Hynes said this (and other structural weaknesses he identified in his letter) reduced the robustness of the independent role and added greater risk to the overall process. “We would urge that the Regulations and standing order provisions for the independent role are precise and robust from the outset, rather than contain these weaknesses and structural flaws.”

The draft 2014 regulations are currently the subject of informal soundings with the Local Government Association.

Nicholas Dobson, spokesman for LLG and a consultant at Freeth Cartwright, said there seemed to be a ministerial misconception is that the regime was primarily about employment law.

“It isn’t,” he said. “That is a creature of both statute and employment contract. The regime is in fact about corporate governance and the ability in the public interest for senior governance officers to speak truth unto power.”
 
He added: “Whilst I recognise the interrelation between the employment law regime and this when it is no longer viable for the officer to remain within the council (probably most cases when the regime is triggered), the primary purpose of the regime is to provide an (albeit fragile) line of protection for senior officers who need in the public interest to give necessary advice which the council or its majority group finds uncomfortable or unacceptable.

“Therefore, whilst there could no doubt be some streamlining to present arrangements it does no service to the public interest for ministers to confuse the purpose of this regime with the ‘fat cat officer severance packages’ they apparently wish to avoid.”