Hallett v Derby Hospitals NHS Foundation Trust

Incorporation of external employment documents depends first on whether the parties intended them to form part of the contract, and secondly on whether the particular provisions are apt for incorporation. Clear rights and obligations may be contractual, while guidance expressed in aspirational or framework terms will generally not be. Where the contract leaves the detailed methodology for exercising a monitoring discretion unspecified, the employer may choose between rational methodologies, subject to the implied term of trust and confidence and the requirement of rationality. A monitoring scheme may use substituted or expected data where that is a rational means of assessing compliance across a rota as a whole. A single valid non-compliant monitoring round may trigger entitlement to a higher pay band under the relevant contractual scheme.

Dr Sarah Hallett, a junior doctor employed by Derby Hospitals NHS Foundation Trust, brought a representative declaratory claim concerning monitoring of natural breaks and pay banding on a General Surgery F1 rota. The contractual documents incorporated the Terms and Conditions of Service for NHS Medical and Dental Staff (England) 2002 and referred to robust local monitoring arrangements supported by national guidance.

The dispute concerned whether Department of Health documents or the Trust’s local Hours Monitoring Guide and FAQ supplied the governing contractual methodology, whether the Trust’s use of expected and substituted data was rational, and whether two monitoring rounds were valid. MR1 was assessed as valid and compliant. MR2 was assessed as invalid because its duty return rate was below 75%, although its natural-break result was below the compliance threshold.

1. Incorporation. The Derby contract’s clause 6(a) made the Trust contractually responsible for monitoring through robust local monitoring arrangements supported by national guidance. The Trust’s Hours Monitoring Guide and FAQ constituted those local arrangements and were incorporated to the extent that they stated clear rights and obligations, including the 75% doctor and duty return thresholds, the minimum monitoring frequency, and the permitted use of substituted data.
2. The Department of Health documents were not incorporated. The reference to HSC 1998/240 and HSC 2000/031 in paragraph 22a of the TCS merely drew attention to documents relevant to the pay-band provision. Their language of guidelines, national guidance and information did not show an intention to create contractual terms. The DH Monitoring Guidance supplied a framework and operational guidance, but did not require the use of actual data alone or prohibit substitution.
3. The contract did not prescribe the detailed methodology for calculating validity and compliance where data was missing. That methodology was therefore left to the Trust’s discretion, subject to rationality and the implied term of trust and confidence.
4. Applying Braganza v BP Shipping [2015] ICR 449 (SC), the court was entitled to scrutinise the exercise of that discretion. The relevant question was whether the methodology was one that no rational NHS employer could have adopted. The Trust’s use of expected duties and substituted data, together with an assumption of compliance for missing returns, was rational because the monitoring assessed the rota as a whole, missing data could distort representativeness, and any methodology necessarily involved assumptions.
5. MR1 was valid and compliant at 75.89%. MR2 was invalid because its duty return rate was 71.56%. The Trust was entitled to retain the 218-duty denominator based on the contracted rota, although the inclusion of Dr Mohammed’s slot was mistaken. Alternatively, that error entitled the Trust to treat the exercise as void and require re-monitoring. The Trust was not contractually required to include Dr Clarke’s late returns.
6. Paragraph 21p of the TCS was inconsistent with a discretionary two-strikes policy. A single valid monitoring round showing that a post belonged in a higher pay band appeared to give rise to backdated pay at the higher level. A declaration was made on that issue. The principal declarations were refused and, subject to that declaration, the claim was dismissed.