Employment implications of Networks: What practices need to know

Under the GP contract for 2019/20, all GP practices in England are encouraged to join a Primary Care Network (PCN).

A PCN is a group of GP practices (practice members) who work collaboratively to form a system (network) with primary and community care staff, health and care organisations to provide integrated services to their local communities.

NHS England and the BMA have indicated that each PCN will typically cover 30,000 to 50,000 patients and the expanded primary care team is expected to take the pressure off GPs and reduce appointment waiting times.

Practices wishing to join a PCN will benefit from funding of up to 70% towards employment costs (for clinical pharmacists, physiotherapists, physician associates and community paramedics) and 100% of the employment costs of social prescribing link workers.  

Practices should be aware that the structures can give rise to joint liability between member practices and issues for employees.

There are a number of options regarding the employment of staff by PCNs, and it is up to member practices to decide what structure works best for the PCN. The BMA has suggested various structures, considered below:

1. Flat structure

A flat structure is where the member practices in the PCN are jointly responsible for staff.  One practice within the network is used as the nominated payee, with costs spread across the network.

The practices in the network enter an agreement that they are jointly and severally liable for the functions and workforce of the PCN, and that any liability arising from these functions are split between members.

Under a flat structure, member practices would use a joint employment contract to engage staff and all practices would be regarded as employers. Contracts of employment would record the entire network as the employee’s place of work and the policies and procedures of the nominated payee practice (such as those relating to grievance and disciplinary proceedings) will be applied.

Employment considerations

·         Apportioning liability may be tricky when some practices in the network operate as partnerships and others as sole practitioners with unlimited personal liability. For example, sole practitioners should exercise caution if entering in to a joint agreement with a limited company whose personal liability will be limited.

·         Deciding who will take responsibility for the operation of HR and performance management may be problematic across a large network, particularly for existing staff, who may be used to manage aspects of HR falling within a certain department or with a particular member of staff at their individual practice. To overcome this, the practice members will need to make sure that the contract of employment reflects the reality of the situation, with the correct lines of responsibility for certain aspects of HR and performance.

·         The Network would need to ensure the supply of staff between various practices does not give rise to a chargeable supply which would be subject to VAT.

·         Depending on the structure of the network, staff with an NHS pension may encounter problems accessing the scheme.

·         TUPE may apply.

·         In the event of a dispute, a situation may arise where an employee is found as having more than one employer within the network.

2. Lead practice

Under this structure, staff are employed by the lead practice and seconded out to work in the other practices within the PCN.

Member practices select a lead practice which is responsible for engaging the additional workforce for the PCN with service delivery extended to the network as a whole. Practices jointly enter an agreement that contracts relating to the functions and workforce of the PCN are entered into by that lead practice.   

The lead practice employs the network staff and those staff will either be seconded out to member practices as required, or work across the network. The funding benefits are sent direct to the lead practice to fund the employment costs, to be distributed to members as agreed.

Under this structure, the lead practice is responsible for meeting employment costs and liabilities and will assume all HR obligations.

Employment considerations

·         A robust agreement between member practices is essential to ensuring the workforce, liabilities and financial arrangements are clearly documented.

·         Possible VAT issues related to supply of staff.

·         Employment liabilities may prove an issue, as these are likely to rest with the lead practice and so appropriate liability clauses will need to be drafted between the lead practice and other members.

·         There will need to be clear guidelines on who will deal with employment issues (such as disciplinary and grievances) and how. Failure to get this right could result in employment related liabilities for both a member practice and the lead practice. Appropriate undertakings between the lead practice and member(s) will need to be drafted to govern such matters.

·         TUPE may apply to existing staff whose contract of employment transfers to the lead practice.

·         Discrimination claims can still be brought against member practices and individuals, despite the contractual relationship with the lead practice.  

3. Limited liability

In this model, member practices continue to employ their existing staff and provide their core services, and they sub-contract a separate entity (ie, a company) to employ the additional staff and deliver services required under the DES.

These services will be funded by the monies received via the DES. In the unlikely event of the company being a party to a primary medical services contract, the funding would need to be paid to individual members and then passed to the company (if permitted under any funding or governance arrangements).

Employment considerations

·         While this model limits the subsequent liabilities that practices are exposed to as the network workforce grows, staff employed by the company may not be eligible to access the NHS pension fund. 

·         The network will need to be careful that existing staff remain with their original employer (ie, are not seconded to practices within the network) to avoid any suggestion they are somehow employed by more than one practice (ie, in the event of an employment dispute).

·         Potential VAT issues may arise when it comes to moving funding to the provider entity, and in connection with the ultimate service delivery.

Conclusion

The collaborative structure of a PCN has clear potential benefits for GPs, employees and patients alike. However, the contractual arrangements between the various practices within the network and their employees are complex structures that can give rise to operational (day to day) and legal issues if appropriate advice is not taken. A practice entering in to a PCN should always consider:

·         How employment liabilities will be shared between practices in the network

·         Whether there is a risk employment arrangements will cause complications regarding VAT

·         Whether the chosen option enables the additional staff to join the NHS pension scheme.

The national funding for the Additional Role Reimbursement Scheme will expire in 2024 and with no recommendations for further funding discussed to date, it is likely PCNs will bear the full cost of additional staff themselves.

In light of this, practices should also consider whether new appointments can be made on a fixed term basis, subject to available funding and how any costs that arise as a result of employment (eg, redundancy costs) can be apportioned between practices within the PCN. 

Jade Linton is Senior Associate Employment Solicitor at Thursfields