In March 2020, NASGP launched a fundraising campaign, supported by just short of 100 locums and their supporters, to seek formal legal advice on whether a simple 'Continual Service Contract' - triggered by a need to self-isolate - would enable a GP locum's dependents benefit from all Death in Service benefits afforded by the NHS Pension scheme.
Because of these generous donations from NASGP members and others, we were able to instruct both a specialist employment lawyer Ray Levy, and barrister Mary O’Rourke QC, who have compiled the following FAQs.
Would a ‘Continual Service Contract’ or 'Continual Self-Employed Contractor’s Agreement' enable me to qualify for Death in Service?
There are two possible types of ‘Continual Service Contract’. One is a Continual Employment Contract and the other would be a Continual Self-Employed Contractor’s Agreement.
A Continual Employment Contract should be sufficient to qualify for Death in Service. However, it would mean moving from a self-employed position to a regulated employment contract. It would also require the employer to agree not only to move you to employment status (which has disadvantages to the employer in terms of tax treatment, PAYE issues and employment rights) but also requires the employer to accept a continuing contract, rather than a fixed short term agreement.
Even if the employer would agree to a Continual Employment Contract, the locum would also suffer disadvantages in terms of tax treatment, PAYE and issues around deductible expenses. The tax disadvantages to the individual of such a contract may be outweighed by the advantages in terms of the receipt of potential payments on death in service. But if the contractual payments are minimal as the contract is a limited one with limited obligations (allowing, for example, the maintenance of self employment for other work) then the size of the payments received from the employer may be insufficient to offset the loss of self-employment status and the tax disadvantages.
If an individual worked under a Continual Self-Employed Contractor’s Agreement, they would be unlikely to qualify for Death in Service. The ruling by the court in Sanderson made it clear that a GP would have to be engaged in providing GP services at the time of death, and the obligations of a self-employed locum to a practice, during non-working hours, under a Self-Employed Contractor’s Agreement are unlikely to be sufficient to meet the required threshold. It is also quite possible that the NHS would reject such a contract as simply a device to try to avoid the ruling in the Sanderson decision and therefore not pay out in such circumstances.
Would a UK government initiative (as appears to have taken place in Scotland) stipulating death 'as a result of providing frontline treatment for Covid-19 patients’ work?
The UK Government has now addressed this issue by its recently announced assurance scheme for frontline essential NHS workers. This payment should also cover self-employed locum GPs, should they contract Covid 19 and die due to hands on personal care or working in healthcare settings where the virus may be present. If they meet the definition their families would receive a £60,000 lump sum payout as a death in service payment.
The Secretary of State has offered some clarification that this payment will cover “workers” and not just employees and so it should cover self-employed locum GPs. He has also said it is not dependent upon proof of any negligence in the causation of the illness and death.
(NB: It also doesn’t prevent a locum’s family from bringing a separate claim for negligence and potentially greater loss (ie more than the fixed sum of £60,000) should a claim for negligence be apparent, although proof of negligence and causation of the illness may be problematic in a healthcare setting.)
However, the complete guidelines for meeting the payment criteria have not yet been published and therefore we cannot yet be sure what qualifications or exclusions may apply. It is therefore not yet clear that all self-employed locum GPs will fall within the required definitions.
For example, it is not clear yet whether the GP would be required to present some evidence that they contracted the illness during their work, or whether the payment is made simply due to being in service (although that perhaps may be sufficient, if we can infer this from comments made to date by the Secretary of State).
Would the above advice differ if the contract was a ‘zero hours contract’ hosted by an NHS pension provider?
Again, a zero hours contract can be created both under an Employment Contract or under a Self-Employed Contractor Agreements.
If Self-Employed, the same issues remain, as the regulations require the doctor to be engaged in providing GP services at the time of death. If created as a Self-Employed Contractor Agreement, the zero hours contract is likely to result in a doctor not performing any services at the time of death, in which case the claim is likely to fail.
Alternatively, where a zero hours contract is created under a Contract of Employment, although it is possible that the GP would be covered for Death in Service, the disadvantages of being an employee may not be worthwhile to the employer or employee to create such an agreement. Additionally, the fact that the contract is zero hours may also have implications on the amount of any benefit recoverable. It may therefore not be prudent for a GP to swap self-employment for such a contract with its tax disadvantages for what might be a small recovery. This may also be unnecessary if the locum is appropriately covered by the Government’s £60,000 Assurance Scheme.
If a Practice engages me through an employment contract to provide temporary Covid-19 services, is this a reliable solution?
It may well be, but it carries the disadvantages of employment (in contrast to self-employment) as described above, and potentially restricts the locum from taking on other employment.
It will also cover the locum only during the term of that employment contract. This means that if it is a temporary contract for a fixed period, no protection would be provided if the GP were to die following the expiry of the contract term.
Again, if the locum is covered by the Government Assurance Scheme there would seem to be no particular benefit in this approach (unless a higher benefit could be obtained from the standard Death in Service provisions).
Would taking out a life insurance policy help in this situation?
It might do. It depends on the premiums charged and whether insurers are prepared to write such policies at the current time and indeed whether the life insurance policy will have a Covid 19 exclusion. If a GP wished to take out life insurance it is highly recommended that they obtain specific advice and confirmation from the insurer that the policy will cover death from Covid 19.
Indeed, some have suggested that one of the reasons for the introduction of the Government Assurance Scheme is due to a lack of private insurance coverage in this area.
Given the introduction of a Government Scheme a separate policy would be unnecessary unless it is considered that either (a) the amount of £60,000 would be insufficient or (b) that the scheme when rolled out for some reason excludes the individual locum or their working practices.
NASGP will be very shortly publishing detailed information from our colleagues at Legal & Medical on how to purchase such schemes in the current pandemic.