The Senior Manager and Certification Regime and Employment Processes

Caroline Glacken of Constantine Law comments on some of the implications of the Senior Manager and Certification Regime for employment processes.

At the recent Employment Lawyers Association (ELA) conference, the update on the Senior Manager and Certification Regime raised some interesting practical issues for disciplinary and capability processes.

Senior Managers and those within the certification regime are already required to meet standards of fitness and propriety but, going forward, if a firm becomes aware of any information which could be relevant to fitness and propriety it will need to notify the FCA or PRA accordingly and make an assessment about whether the employee can continue in their position.   

The very nature of the type of conduct that would lead to a disciplinary process, or indeed the type of concerns that would give rise to a capability process, will simultaneously raise issues under the new test of fitness and propriety which then need to be assessed and considered.  If a firm is no longer able to certify an employee as fit and proper, they cannot be authorised to continue in their roles and this may result in their dismissal.  

However, the scope of the fitness and propriety test is broader than what you might consider as incompetence, misconduct or a disciplinary offence, sufficient to give rise to dismissal.  It is perfectly possible that a person might not have allegations of misconduct (for example) upheld against them but that they would no longer be considered fit and proper and dismissed in any event.  

It would seem quite unsatisfactory to go through a disciplinary process and be cleared of misconduct only to then go through a further fitness and propriety assessment and be dismissed in any event. However, if the fitness and proprietary assessment was conducted first, and resulted in a dismissal, that would appear to deprive the employee of a disciplinary investigation process which might allow them a better opportunity to protect their position.

Amalgamating the two assessments into one process might seem sensible but could risk compromising the integrity of the disciplinary process and create confusion as to the parameters of the exercise.  Perhaps the disciplinary officer could be replaced with a panel to allow for checks and balances but then the process becomes far more elaborate – in that scenario you would expect employees to be entitled to representation within the internal meetings.

The piecemeal manner in which the new rules have been delivered means there are a number of areas like this where further clarity is eagerly awaited.

This article originally appeared in LinkedIn

Caroline Glacken