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The Art of Recycling Executives Who Fail the Public Interest Test?

RogerKline
Aug 10
7 min read

“Employment tribunals provide a rare but fascinating window into how NHS trusts operate – and where things go wrong.


“One such judgment has cast further light on a controversial chief executive who ran two of what are now some of the worst-ranked trusts in the country. Readers with a long memory will recall that an HR investigation into Jonathan Lofthouse at Humber Health Partnership – who has not returned to his old job – found there was no case to answer.


“But now the former CEO has been heavily criticised by a judge, who ruled an executive had been unfairly dismissed following a “deeply flawed” process. Estates boss Jug Johal was told to “trust the process” – only for Mr Lofthouse to uphold a disciplinary hearing’s decision to sack him. He added: “Mr Johal was misled by Mr Lofthouse into believing that if he ‘trusted in the process’ he would not be dismissed. Mr Johal was clearly mistaken in believing Mr Lofthouse.”


A stitch up


Judge Hutchinson said the tribunal was satisfied Mr Lofthouse had

“already determined that Mr Johal was surplus to requirements, encouraging him to apply for jobs elsewhere and launching a board restructure during 2023 in which just he and one other executive would have to reapply for their jobs.


Finding in favour of Mr Johal, the tribunal said the trust’s investigation was “deeply flawed and was only concerned with trying to establish that Mr Johal had committed some act of wrongdoing”.


The judge added that Mr Johal’s admission that he made a mistake by using the vehicles “did not in any way justify the treatment that he received from his employer after giving them 17 years of loyal service and unblemished at that”.


The final paragraph (154) of the judgement said


“He (Mr Johnal) had gone through the “most terrible 12 months of his life” in the run-up to the investigation, including personal health problems, the traffic accident, becoming a main carer to both his parents, and the unjustified disciplinary proceedings and dismissal.”


The Trust investigation was overseen by Lee Bond, who at the time was the group’s joint chief finance officer and the deputy CEO at HUTH. The judge said Mr Bond had placed Mr Johal under “extreme pressure to resign” as a “way out” of a finding of gross misconduct. Mr Bond told the tribunal he was “being pressured by HR”.


Jonathan Lofthouse: a man not to be believed.


At this point, Mr Johal tendered his resignation. However, he was then persuaded to retract it by Mr Lofthouse, who “assured Mr Johal that he would overturn the sanction at the appeal stage” and warned him that not doing so could “have an impact on the kind of reference that could be offered”.


The tribunal said:


“Mr Johal was misled by Mr Lofthouse into believing that if he ‘trusted in the process’ he would not be dismissed. Mr Johal was clearly mistaken in believing Mr Lofthouse.”


A subsequent disciplinary hearing chaired by Shaun Stacey, the group’s then chief delivery officer, found the estates director had committed gross misconduct and should be dismissed without notice. This was despite it being “common practice” for employees to use these vehicles, and Mr Stacey not having the authority to dismiss Mr Johal.

The tribunal said: “We are satisfied that the decision reached and the way it was reached so quickly… was predetermined.”


At an appeal hearing, chaired by the very same Mr Lofthouse, the original charge was downgraded from gross misconduct to “misconduct of a serious nature”, an offence that did not exist in the trust’s disciplinary processes. Mr Johal was nevertheless still dismissed.


So what might the NHS learn from this case?


Learning 1. The Tribunal findings raise serious questions about predetermination, procedural fairness and leadership integrity. The Tribunal found that how the decision reached, and the way it was reached so quickly, was predetermined. Crucially, the Tribunal found that at the heart of this injustice “Mr Johal was misled by Mr Lofthouse” not least because the tribunal was satisfied Mr Lofthouse had “already determined that Mr Johal was surplus to requirements”, encouraging him to apply for jobs elsewhere and launching a board restructure during 2023 in which just Mr Johal and one other executive would have to reapply for their jobs.


Learning 2 NHS England apparently has no shame about ignoring such matters. Despite Mr Lofthouse having taken part in the predetermined unfair dismissal of one of his Directors and despite the Tribunal’s scathing criticism of his conduct and decision making, Mr Lofthouse has been recycled by NHS England (again) and is now ……. a “Director of Turnaround and Recovery” for NHS England.


Learning 3. The Director who “prosecuted” Mr Johal referred more than once to the Fit and Proper Persons Test and the Nolan Principles but these were not applied to those who conducted the stitch up.  Despite the evidence of a shameful abuse of process costing the NHS a fortune in lawyers’ fees and compensation, and the wrecking of a Director’s career (who had an impeccable employment record), it is unclear whether NHS England referred Mr Lofthouse to the Fit and Proper Persons Test before recycling him.   If Mr Lofthouse’s failings do not prompt a referral, some might ask what does?


Learning 4. Anonymous letters are increasingly appearing in disciplinary hearings. This is a growing trend I have personally witnessed several times in recent months. Mr Lofthouse’s receipt of an anonymous letter is described by the Tribunal as “fortuitous”. Whatever its origins, the case illustrates the risks of relying on anonymous allegations without robust safeguards and genuinely independent investigation.


Learning 5. What on earth was HR up to? The deputy director of workforce was part of an appeal panel that made numerous mistakes in dismissing Mr Johal. The Tribunal identified multiple failings in Paras 126 to 133 of its Judgement lists six major flaws:


  • the person who dismissed no authority to do so;

  • there was not an unbiased investigation into his behaviour, but an inappropriate investigation undertaken by someone who was junior to him when such an investigation should not have been carried out by that person;

  • The investigation was conducted in a manner to seek to validate the misconduct rather than to approach it in an even-handed manner;

  • Throughout the investigation, disciplinary process and subsequent appeal process, the Respondent did not follow its own Just and Learning framework;

  • it was not necessary to dismiss Mr Johal or indeed, subject him to disciplinary procedures. There was no evidence that his conduct showed any dishonesty on his behalf and at the time that he was using the demonstration vehicles he genuinely believed that he was doing nothing wrong;

  • Senior management did not think themselves that he was doing anything wrong and did not try to stop him..


Mr Bond told HSJ he was “put under pressure by HR”. If he was, what is HR’s explanation?


Learning 6. The Trust professed to have a Just and Learning Culture, but in their decision-making took no notice of it. The Tribunal’s findings reveal a striking gap between the Trust’s stated commitment to a Just and Learning Culture and its actual response when concerns arose. Organisations cannot credibly promote learning while simultaneously pursuing predetermined outcomes.


Learning 7.  The investigation was clearly biased. The Tribunal found that the investigation was “only concerned with trying to establish that Mr Johal had committed some act of wrongdoing”.


This must have been obvious to HR but they appear to have stayed silent. It is surely time for NHS England to publish a final version of their rather good draft National Guidance on Investigations and require every Trust to adopt its principles. . Finding in favour of Mr Johal, the Tribunal said the trust’s investigation was “deeply flawed and was only concerned with trying to establish that Mr Johal had committed some act of wrongdoing”. My own research found this was not uncommon in NHS investigations. https://www.rogerkline.co.uk/investigating-the-investigators


Lessons 8. Mr Johal had originally lodged a claim for race discrimination. Mr Johal originally brought claims of race discrimination but ultimately chose not to pursue them. The case nevertheless raises broader questions about whether individuals from minority ethnic backgrounds can have confidence that concerns about discrimination will be fairly examined when organisational leadership has already formed a view about them.


Learning 9. What was the role of Capsticks, the Trust’s lawyers? Capsticks are not mentioned throughout the judgement but their advice would have been sought from start to finish. Did they advise the Trust to take a difference course of action and were ignored? Or did they go along with the Trust’s wishes leading to an injustice and heavy costs for the trust?  We may never know unless Capsticks would like to let us know?


After the Tribunal

Once leaders decide on an outcome and then seek evidence to justify it, governance fails. The Tribunal repeatedly identified predetermination as a feature of this case. The resulting costs, reputational, financial and human, are borne not by the decision-makers but by staff, taxpayers and patients.


After the hearing the Trust stated “We will share that learning across the trust in order that we, as an employer, consistently follow due process in the future, reflecting our ongoing commitment to providing a fair, inclusive and supportive working environment…We would like to apologise to Mr Johal for his experience and for the impact which these events, and the subsequent tribunal proceedings, will inevitably have had on himself and his family.”


The most troubling aspect of this case is not simply that a highly experienced NHS director with an impeccable track record was unfairly dismissed. It is that a Tribunal identified multiple failures of leadership, governance, due process and organisational justice, yet there appears to have been no accountability for those responsible. The combined cost of lawyers and compensation will not be borne by Mr Lofthouse or Mr Bond, but by patients whose funding for care has been hit.


And NHS England have, again, I’m afraid, demonstrated the Art of Recycling Executives Who Fail the Public Interest Test.

 
 
 

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©2020 by RogerKline.

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