Disciplinary action against statutory officers

Sarah Lamont looks at how local authorities can get to grips with the new regime for disciplinary action against statutory officers.

One of the most difficult issues that councils can face is taking disciplinary action against, and potentially dismissing, a statutory officer i.e. the Chief Executive (or officer designated as the Head of Paid Service), Monitoring Officer or Chief Finance Officer (s151 Officer). Disciplinary action in this context is wide and means any action in respect of misconduct and proposals to dismiss for any reason other than redundancy or ill-health. By its very nature, it is likely to be a serious matter such as underperformance, inappropriate personal conduct or relationship breakdown with colleagues or the council, and will raise many challenging questions internally as well as the potential for public scrutiny.

A new set of regulations governing the procedural protections for these statutory officers in disciplinary situations was introduced in 2015 – but as amendments to nationally negotiated contracts for Chief Executives setting out the procedures to be adopted were only made in October 2016, and amendments for Chief Finance Officers and Monitoring Officers only in August 2017, it is only now that councils are making use of the process in practice.

The backdrop

The new regulations were introduced under Eric Pickles as Secretary of State for Communities and Local Government and were designed to make the process simpler and more streamlined, recognising that in some cases councils were deterred by the potential length and difficulty and might instead agree a severance deal with the statutory officer. Such perceived ‘rewards for failure’ were difficult to justify publicly and could attract significant media attention.

However, as well-intentioned as they are, the updated contractual process, being the end result of negotiations between the Association of Local Authority Chief Executives (ALACE) and the LGA, are still complex and take time to work through (For the Monitoring Officer and the Chief Finance officer the new contracts refer to the process in the new Chief Executive contract and suggest that can be used as a reference guide in circumstances where the Head of Democratic Services is contemplated.)  

It is therefore important that councils understand the changes and ensure they have everything in place should they need to follow them. In this article, we will set out a brief explanation of the requirements and offer some observations for councils.

In brief: the new process

Under the old regulations, councils had to appoint a Designated Independent Person (DIP) who would investigate the allegations against the statutory officer. The council could not dismiss the officer if the DIP did not recommend it.

The new regulations remove the DIP role – and replace it with an Independent Panel (of at least two people). The council is not obliged to follow the Independent Panel’s recommendation. The new process runs as follows:

• If it is decided that an allegation against a statutory officer needs to be investigated, the council’s Employment Committee which generally has responsibility for these matters will consider the issues. (The Conditions of Service refer to this as the Investigation and Disciplinary Committee.)
• The Employment Committee must appoint an independent investigator. The investigator will be taken from an approved list held by the National Joint Secretaries: the statutory officer has a say in which of a list of three is chosen
• The independent investigator will investigate and report back to the Employment Committee
• The Employment Committee will then agree its recommendation to the council
• If the recommendation is for dismissal, this must be considered by the Independent Panel
• The Independent Panel will review the recommendation and compile a report of its own
• Both reports/recommendations – from the Employment Committee and the Independent Panel – go before full council who will review and make their final decision

Still takes time

From this brief summary, it can be seen that there is a clear potential for the new process to still take a considerable amount of time. We estimate that the very minimum amount of time needed is three months – and most cases will take considerably longer.

One of the reasons for this is the high potential for duplication: the Independent Panel is likely to want to interview the same people as the independent investigator. In a sense, the investigation could happen twice.

Severance deals

In times of ongoing public sector austerity and the increased scrutiny of severance payments in the public sector, many councils can ill afford large payouts and will be unlikely to be able to justify offering a financial settlement at a time where there are significant pressures on key services.

However, it may still be appropriate to consider having a compromise agreement to conclude the matter quickly and to agree severance payment deals with officers rather than go through the formal process. However, this will become more difficult not only because of public and political pressure against payoffs but also because the government apparently still intends to introduce public sector exit payment caps of £95,000 in the future, which are likely to have very limited discretion to waive the cap. Full Council approval is needed in any case for payments over £100,000.

Considerations – the right committees in the right format

Therefore, we expect that more councils will need to implement and follow the new procedures in the event of a statutory officer disciplinary issue. Such issues, of course, are rare – but have high impact when they do occur.

There are a number of issues that councils need to consider:

• Employment Committees – some councils may not have one (or an IDC), so will need to be ready to set one up; other existing ECs may have terms of reference that do not include the disciplinary function for statutory officers so these terms may have to be amended and approved
• Constitutions – these need to be amended as soon as possible, if they have not been already, to reflect the new regulations. If they are only amended at the time of an issue arising, a council will have to wait at least 20 days before an Independent Panel can be appointed and a hearing held
• Suspension – the chair of the Employment Committee/IDC should have been given the delegated authority to suspend a statutory officer. There are also specific arrangements that have to be in place to enable a rapid/immediate suspension if that is needed

To suspend or not to suspend?

The issue of suspending statutory officers remains a vexed one. To an extent, a council will always be ‘damned if they do, damned if they don’t’. On the one hand, suspension shows that the council is taking the issue seriously and is carrying out a full investigation. On the other hand, as a recent report in the national press brought attention to, suspensions can often last many months or even two or three years and lead to criticisms that the individual is receiving full pay from the public purse for doing nothing.

In our experience, the key question when considering whether or not to suspend is: will the investigation be hampered if the individual remains in place at work? If it will, that is a compelling reason to suspend.

Key recommendations

In order to ensure they are ready for the new regulations should they need to invoke them, we recommend that councils:

• Identify suitable independent persons who can sit on the Independent Panel (these might be retired senior officers, ex-lawyers, or employment practitioners/consultants as examples)
• Provide training for the independent persons and members of the Employment Council/IDC – walk through the new process, ensure that everyone understands the level of care required, consider theoretical scenarios and decision points.
• Think about communications including the likelihood of a disciplinary case becoming public. How will you handle crisis communications and is there a clear process for dealing with the media?
• Understand the timeframes that are likely to be involved and the costs that are likely to be incurred

The new process enables the decision to be taken transparently by full council, who can consider and decide the best disciplinary process that will deliver value for money for their local taxpayers, whilst retaining independent scrutiny.

However, there remain many difficult pitfalls which mean that councils need to be actively considering whether they are equipped for the task should it unfortunately arise.

Sarah Lamont is an employment law partner at Bevan Brittan LLP. She can be contacted on 0370 194 8943 or This email address is being protected from spambots. You need JavaScript enabled to view it..