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POSTMASTER
SUPPORT POLICIES
Postmaster Contract
Termination Policy
Version — V3.0
Post Office is determined to reset its relationship with postmasters and has introduced policies that set out guidelines on how
Post Office should support postmasters, specifically for use across twelve areas.
The policies stand on their own but should be reviewed in conjunction with each other. Support teams should have an awareness
of all twelve policies and how they link together.
The twelve Postmaster Support Policies are listed in section 3.2 of this policy and can be found on the hub, here.
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1. Definitions.............
1.1. Definitions............
2. Overview ............-.
2.1. Introduction by the Policy Owner
2.2. Purpose
2.3. Core Principles .
2.4. Application ..
2.5. The Risk....
3. Risk Appetite
3.1. Risk Appetite
3.2. Policy Framework
3.3. Who must comply?.
3.4. Roles & Responsibilities
3.5. Minimum Control Standards
4. Procedure..............
4.1. Termination rights...............
4.2. Investigation ....
4.3. Termination Rationale
4.4, Alternatives to termination
4.5. Immediate termination (without notice)
4.6. Repudiatory breach
4.7. Other immediate termination rights...............ceee
4.8. Termination on notice
4.9. Consideration of all the applicable facts
4.10. Reasonable and proper cause..
4.11. No material breach by Post Offic
4.12. Notice period
4.13. Informing a postmaster of termination
4.14. Decision review
5. Where to go for help ............
5.1. Additional Policies
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5.2. How to raise a concern...
5.3. Who to contact for more information
6. Governance..
6.1. Governance Responsibilities .
7. Control...
7.1. Policy Version see
7.2. Policy Approval & Review
Company Details..........
8. Appendices
8.1. Examples of immediate termination rights..................
8.2. Termination Rationale Document
8.3. Process map
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1.
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Definitions
1.1. Definitions
1.
Contract Termination Decision Review Group - A group consisting of the
Head of Contract Management & Deployment, a repesentative of legal services
and a Regional Manager whose role it is to review and authorise termination
decisions in line with the procedures set out in this policy
Investigation - An investigation into the matter that may give rise to Post Office
exercising its termination rights undertaken by the Contract Advisor.
Postmaster - this refers to a limited company, partnership, limited liability
partnership or individual that contracts with the Post Office in its or their capacity
as a postmaster in the network, or assistants of such postmasters.
Repudiatory Breach - A breach of the postmaster’s contract/agreement that is
so serious and fundamental that the contract cannot continue.
Termination Rationale (see appendix 8.2) - A rationale completed by the
Contract Advisor which captures the facts and findings of the investigation into
the matter and sets out the rationale outlining the recommendation for review by
the Contract Termination Decision Review Group.
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2. Overview
2.1. Introduction by the Policy Owner
The Franchise Partnering Director has overall accountability to the Board of Directors for
the design and implementation of controls to manage risk in the network!. Risk in the
network is an agenda item for the Risk Committee and the Post Office? board is updated
as required.
This policy is a non-contractual document provided for information. It does not form part
of a contract between postmasters? and Post Office.
This policy forms part of a suite of policies designed to deal with the management of
postmaster contracts and for those teams deploying any aspect of this policy it should be
read together with the Postmaster Contract Performance and Postmaster Contract
Suspension policies. These polices can be found on the hub, here.
2.2. Purpose
This policy is part of a framework that has been established to set the minimum operating
policies relating to the management of contracts with postmasters (which may be
companies, sole traders or partnerships) throughout the network.
Post Office recognises that there may be occasions where it is necessary to terminate the
contractual relationship with a postmaster. The purpose of this policy is to identify the
circumstances in which termination should be considered and the criteria which must be
met before adecision to terminate is made. It will also outline the procedures to be followed
in the case of termination. Wherever possible Post Office will seek alternatives to
termination as outlined later in this policy.
This policy covers termination by Post Office; it does not cover termination or resignation
by the postmaster.
This policy is one of a number of policies which provide a clear risk and governance
framework and an effective system of internal control for the management of risk across.
the Group. Compliance with these policies supports the Group in meeting its business
objectives and to balance the needs of customers, shareholders, employees, other
stakeholders (such as the government departments) and third party commercial partners
including Royal Mail.
2.3. Core Principles
Under agreements between postmasters and Post Office, postmasters provide products
and services to customers on behalf of Post Office and in doing so are asked to meet
contractual obligations as set out in the agreements.
"In this policy, “network” means branches not directly managed by Post Office
2 In this policy, “Post Office” means Post Office Limited.
2 In this Policy ‘postmaster’ refers to the person or entity (which may be a company, sole trader or partnership) contracted with
Post Office and any person acting on the post master’s behalf (as applicable),
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On occasion these obligations may not be met by a postmaster and, in certain
circumstances, Post Office may need to terminate its agreement with a postmaster.
Termination is a serious step and it is therefore vital that the termination process is as
clear as reasonably possible so misunderstandings between postmasters and Post Office
can be avoided.
This policy, and its linked policies, sets out clear and consistent guidelines to ensure that:
* an investigation is carried out to establish the applicable facts before Post Office
exercises any termination rights, to provide the postmaster with the opportunity to
identify and address any issues of concern and to determine whether Post Office
has the right to terminate;
e consideration is given to the postmaster’s particular circumstances before deciding,
acting in good faith, that Post Office should terminate the contract;
e termination only happens when it is necessary and alternatives have been
considered; and
e termination only happens where Post Office has reasonable and proper cause and
Post Office itself is not in material breach of duty in respect of matters that give
Post Office the right to terminate.
Post Office will handle these situations in good faith and apply the principles of fairness,
transparency, and professionalism (being the underpinning behaviours of Post Office).
2.4. Application
This policy is applicable to all postmaster contracts? in the network.
2.5. The Risk
In taking any decision to terminate a postmaster Post Office needs to:
* ensure that any decisions taken in respect of a postmaster contract are not
exercised arbitrarily, capriciously or unreasonably;
e exercise any contractual power (including the right to terminate) honestly and in
good faith for the purpose for which it was conferred on Post Office; and
e exercise any discretion in accordance with the obligations of good faith, fair
dealing, transparency, co-operation and trust and confidence.
The decision to terminate a postmaster’s agreement creates risk to Post Office and
postmasters both through how the decision is reached and by not terminating when it is
appropriate to do so. These risks include (but are not limited to):
« Post Office is not able to terminate the agreement without reasonable and proper
cause. If Post Office itself is in material breach of duty in respect of matters which
Post Office considers give it the right to terminate, i.e. if Post Office has not
complied with its own material obligations, relating to the matters that Post Office
* In this policy, ‘postmaster contract” means contracts which relate to those branches not directly managed by Post Office
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considers give it the right to terminste, Post Office is not able to terminate the
agreement. If a termination decision is taken without reasonable and proper cause
it could:
- cause distress and financial detriment to the postmaster;
Post Office may be perceived as not acting in good faith; and
- lead to a possible legal challenge from the terminated postmaster;
« a reduction in confidence across the postmaster network in how Post Office
manages the contractual relationship with postmasters;
e stakeholders having reduced confidence in Post Office’s ability to effectively
manage postmaster contracts and deal with compliance issues; and
« Post Office may suffer financial and reputational damage.
Section 2.5 sets out the minimum control standards that the Post Office has implemented
to control these risks.
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3. Risk Appetite
3.1. Risk Appetite
Risk appetite is the extent to which the Post Office will accept that a risk might happen in
pursuit of day-to-day business transactions. It therefore defines the boundaries of activity
and levels of exposure that Post Office is willing and able to tolerate.
Post Office takes its legal and regulatory responsibilities seriously and consequently has:
« Averse risk appetite to corporate non-compliance with legal and statutory
obligations.
« Averse risk appetite for financial crime to occur within any part of the
organisation.
« Averse risk appetite in relation to unethical behaviour by Post Office staff.
« Averse risk appetite for litigation.
e Cautious risk appetite for inefficient or ineffective processes that result in: lost
time, duplicated effort, and increased risk of financial loss or errors in any part of
its business or core processes
Post Office acknowledges, however, that in certain scenarios, even after extensive controls
have been implemented, a process may still sit outside the agreed Risk Appetite. In this
situation, a risk exception waiver will be required pursuant to the Exemption Process,
details of which can be found here.
3.2. Policy Framework
This Policy is part of a framework that has been established to set the minimum operating
policies relating to the management of our postmaster contract risks throughout the
business in line with Post Office’s risk appetite. The framework includes the following
policies:
e Postmaster Onboarding
e Postmaster Training
e Postmaster Complaint Handling
« Network Monitoring and Audit Support
« Network Cash and Stock Management
¢ Network Transaction Corrections
e Postmaster Account Support
e Postmaster Accounting Dispute Resolution
« Postmaster Contract Performance
« Postmaster Contract Suspension
* Postmaster Contract Termination (this policy)
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Postmaster Termination Decision Review
3.3. Who must comply?
Compliance with this policy is mandatory for all Post Office employees®> who manage
postmaster contracts on behalf of Post Office.
Where non-compliance with this policy by Post Office employees is identified by Post Office,
Post Office will carry out an investigation. Where it is identified that an instance of non-
compliance is caused through wilful disregard or negligence, this will be investigated in
accordance with the Group Investigations Policy.
3.4. Roles & Responsibilities
e Franchise Partnering Director — is the policy owner, who must comply with the
governance responsibilities set out at section 6.1.
e Head of Contract Management & Deployment - is accountable for the
deployment of this policy, for supporting Post Office personnel who carry out
actions under this policy and for regularly reviewing the effectiveness of this policy
and for drafting any amendments to it that may be required.
« Contract Advisor(s) - is (are) responsible for deploying the procedures set out
in this policy. The Contract Advisor(s) form part of the Contracts Team.
The Contract Advisor must:
°
apply the Post Office’s underpinning behaviours of fairness, transparency
and professionalism;
be fully conversant with this policy and linked policies;
gather as much preliminary information as possible relating to the issue
which has caused termination to be considered, liaising as appropriate with the
postmaster and other Post Office teams;
complete the Termination Rationale Document before terminating a
postmaster’s contract;
consult with the Head of Contract Management & Deployment before
terminating a postmaster’s contract;
consider the options available as an alternative to termination;
ensure any decision is made in line with all other linked Post Office policies;
ensure this termination policy is adhered to and the postmaster treated with
fairness, transparency and professionalism throughout the termination
procedure and any previous procedures (such as suspension);
5 In this policy, “employee” means permanent staff, temporary staff including agency staff, contractors, consultants and anyone
else working for or on behalf of Post Office and, for clarity, does not include postmasters or postmasters' staff
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o make the postmaster aware of the support available to them, including from
the National Federation of Sub Postmasters;
o deal with any contact (written or otherwise) from the postmaster, in a timely
manner; and
o if a meeting is required, be flexible, within reason, over the availability of the
postmaster.
e Contract Termination Decision Review Group - A group consisting of the Head
of Contract Management & Deployment, a repesentative of legal services and a
Regional Manager whose role it is to review and authorise termination decisions in
line with the procedures set out in this policy.
e National Federation of Sub Postmasters (NFSP) - is a professional trade
association which exists to support postmasters.
e Postmaster - this refers to a limited company, partnership, limited liability
partnership or individual that contracts with the Post Office in its or their capacity
as a postmaster in the network, or (as applicable) assistants of such postmasters.
In relation to this policy, the postmaster is expected to:
o be transparent and open towards Post Office;
o ensure they respond to written correspondence and telephone calls in a
timely manner in order to assist the Contract Advisor in reaching a decision;
and
o be flexible and available for meetings with the Contract Advisor if one is
required.
In relation to this policy, the postmaster may:
© contact their NFSP representative to support them through the process;
o arrange legal or other representation for any written correspondence or
meetings with Post Office;
o request information and evidence from Post Office in connection with their
potential or actual termination, including in relation to the investigation
process; and
© contact their nominated Contract Advisor at any time regarding potential or
actual termination.
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3.5. Minimum Control Standards
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A minimum control standard is an activity which must be in place in order to manage the risks, so they remain within the defined Risk
Appetite statements (as set out at section 3.1). There must be mechanisms in place within each business unit to demonstrate compliance.
The minimum control standards can cover a range of control types, i.e. directive, detective, corrective and preventive which are required
to ensure risks are managed to an acceptable level and within the defined Risk Appetite.
The table below sets out the relationships between identified risks and the required minimum control standards in consideration of Post
Office’s Risk Appetite.
Risk Area Description of Risk Minimum Control Standards Who is When
responsible
Reaching a Post Office is not able to « ATermination Rationale Document will be I Head of As required
decision to terminate the agreement completed to support any termination Contract
terminate without reasonable and decision setting out the factors to support I Management &
proper cause. If Post Office the termination. All decisions will be Deployment
itself has not complied with signed off by the Contract Termination
its material obligations, Decision Review Group.
relating to the matters that
Post Office considers give it
the right to terminate, Post
Office is not able to terminate I « Quality checks and training covering the Head of Quarterly
the agreement and if the contract termination process will take Contract
decision is made incorrectly it place with the Contracts Team to ensure I Management &
could lead to: that the correct process is followed. Deployment
* unnecessary distress and
financial detriment to the I» The Franchise Partnering Director will Franchise Quarterly
postmaster; review decisions to ensure consistency of I Partnering
decision making. Director
« Post Office may be
perceived as not acting in
good faith; and
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¢ possible legal challenge
from the terminated
postmaster.
Loss of
confidence
and possible
financial &
reputational
damage
If Post Office are not making
the correct decisions by
either:
e terminating when it does
not have proper grounds
to do so; or
* not terminating when it
should,
it may lead to a loss of
confidence both across the
network and with Post
Office’s stakeholders in how
Post Office manages the
contractual relationship with
its postmasters. In addition,
incorrect decisions may lead
to financial loss and
reputational damage.
All decisions to terminate shall undergo a
sign off process with review by the
Contract Termination Decision Review
Group.
The Franchise Partnering Director will
review decisions to ensure consistency of
decision making.
A postmaster has the right to request
that any decision to terminate their
contract is reviewed. As set out in the
Postmaster Termination Decision Review
Policy® this review will be undertaken by
a panel consisting of independent
external members.
The Postmaster Contract Performance
policy sets out the required steps as to
how potential contractual issues across
the network should be dealt with,
providing a solid framework to ensure
that the contractual relationship with
postmasters is managed consistently. The
relevant stakeholders are provided with
training on the Postmaster Contract
Performance policy annually.
Head of
Contract
Management &
Deployment
Franchise
Partnering
Director
Head of
Contract
Management &
Deployment
Head of
Contract
Management &
Deployment
As required
Quarterly
As required
Annually
® The Postmaster Termination Decision Review Policy (Postmaster Support Policy) can be found in the Postmaster Support Policies on The Hub
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1b/SitePages/Postmaster-Policies aspx
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Policy non- Non adherence to the Policy I All members of the Contracts Team, the Head of Once approved and
adherence could result in legal and wider Franchise Partnering Team and any Contract annually thereafter
regulatory risk as well as teams who may be involved in the decisions I Management & I (or sooner in the
reputational damage to Post being taken will be provided with training on I Deployment event of material
Office and the relationship this Policy. changes to the
with postmasters. Policy)
The Head of Contract Management & Daily
Deployment is accountable for ensuring that
they and their team adhere to the Policy, as
it applies to their area.
The Policy should be reviewed, and if Head of As required (but
necessary updated. Contract reviewed at least
Management & I annually)
Deployment
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4. Procedure
4.1. Termination rights
Post Office can, in certain circumstances, terminate a postmaster’s contract:
e immediately, without notice (see 4.5); or
«by giving the postmaster a period of notice (see 4.8).
The contract may also be terminated by mutual agreement between Post Office
and the postmaster. This is not covered by this policy.
4.2, Investigation
Post Office will carry out an investigation before exercising any termination rights.
Any investigation will be a fair and unbiased method of investigating issues identified. The
process of investigation allows Post Office to establish facts and gives the postmaster the
opportunity to identify and answer any issues of concern.
In the investigation process, the Contract Advisor may seek further information from the
postmaster through written correspondence, telephone conversation(s) or face to face
meetings.
Post Office will ensure that complete records are kept of all investigations and that any
decisions taken in relation to an investigation are documented in rationale documents.
Records will be retained in accordance with Post Office's document retention policy.
Details of the investigation and the relevant supporting records and information will be
shared with the postmaster unless the material is subject to a restriction on disclosure
such as:
e legal privilege;
« data protection law; and
e material relating to a criminal investigation.
The Contract Advisor should make an asessment of whether any restrictions on disclosure
apply in advance of sharing material with the postmaster and seek advice from Post
Office’s Data Protection and Information Rights Team if required.
The Contract Advisor will inform the postmaster of the grounds on which it is being
investigated and its rights to access information and records relating to the investigation.
A process map detailing the contract termination process can be found in appendix 8.3.
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4.3. Termination Rationale
Whenever termination of a postmaster’s contract is considered, the Termination Rationale
Document must be completed by the Contract Advisor. This captures the background of
the case, investigation undertaken and rationale behind the decision to be taken. The
document will be used by the Contract Termination Decision Review Group as a basis for
establishing:
* whether Post Office has the right to terminate the contract; and
¢ if so, whether Post Office considers, acting in good faith, that it should
terminate the contract or not.
Post Office must not terminate the contract unless it has the legal right to do so and
cannot terminate when Post Office is itself in material breach of duty in respect of
matters which the Post Office considers give it the right to terminate.
4.4. Alternatives to termination
Termination will only happen when it is necessary, and the alternatives have been
considered.
Alternative options to termination may include:
* (If the postmaster’s contract has been suspended) Reinstatement with or without
continued monitoring — continued monitoring of the issues identified over a defined
period of time, with any further or escalating issues being flagged to the Contract
Advisor to reconsider suspension and/or termination.
¢ Other contractual performance measures contained in the contract performance
policy.
Alternatives to termination should be documented in the same way as a decision to
terminate a postmaster’s contract and Post Office should ensure that records of these
decisions are also kept, in accordance with Post Office's document retention policy’.
4.5. Immediate termination (without notice)
Post Office may only terminate a contract immediately without notice where:
e There is an immediate termination right in the contract for a specific event (see
4.7); or
e There is a repudiatory breach of the contract by the postmaster (see 4.6).
Post Office must check the postmaster's contract and ascertain all the relevant facts before
taking any action to terminate immediately.
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Any decision by the Post Office to terminate a contract immediately without notice must
be given in writing (see 4.13).
4.6. Repudiatory breach
A repudiatory breach is one that is so serious and fundamental to the contract that it
cannot continue. Generally, these breaches are not capable of being remedied.
Examples of a repudiatory breach may include:
e Where the postmaster is bankrupt or insolvent;
« Where the postmaster is no longer operating the basic business;
e Where the postmaster has been charged on with a criminal offence (other than a
road traffic offence not involving imprisonment);
« Where the postmaster has admitted theft of Post Office funds;
e Where discrepancies of a significant value have been caused by the negligence,
carelessness or error of the postmaster, resulting in a loss to Post Office, and which
have been fully investigated by Post Office;
e Sustained non-compliance by the postmaster following the issuing of written
directions by Post Office (refer to the Postmaster Contractual Performance Policy®
in relation to written directions);
e Any action by the postmaster that demonstrates they no longer intend to be bound
by the contract including loss of a valid property interest.
Some or all of these may also give rise to express termination rights (see 4.7) in the
contract.
4.7. Other immediate termination rights
Locals and Mains contracts contain express rights for Post Office to terminate immediately
on the occurrence of particular events. Some examples of these rights are detailed in
Appendix 1. This is not an exhaustive list.
Post Office must check the express rights set out in the postmaster's contract as these
may differ from the ones listed in Appendix 1, before taking any action to terminate the
contract.
4.8. Termination on notice
Post Office must check the postmaster’s contract before taking any action to terminate on
notice, to ascertain that the contract contains a right to terminate on notice.
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4.9, Post Office may only terminate the postmaster’s Contract on notice where:
« It has knowledge of and has considered the applicable facts, so as not to act
arbitrarily, irrationally and capriciously (see 4.9);
« It has reasonable and proper cause to terminate (see 4.10);
¢ Itis not itself in material breach in respect of the matters giving rise to the right to
terminate (see 4.11); and
e It has considered what the appropriate duration of the notice period should be in
the individual circumstances (see 4.12).
Notice of termination must be given in writing (see 4.13).
4.10. Consideration of all the applicable facts
Post Office must obtain and consider all of the applicable facts before making any decision
to terminate. This will include following the investigation process correctly (see 4.2) and
completing the Termination Rationale Document (see 4.3).
Post Office must not make a decision arbitrarily, irrationally or capriciously, and therefore
must carefully follow all of the steps set out in this policy.
4.11. Reasonable and proper cause
Depending on the termination on notice wording in the contract, examples of reasonable
and proper cause might include:
e breach or breaches by the postmaster of its duties which do not amount to a
repudiatory breach;
* Post Office considers that the relationship with the postmaster is no longer working;
* where Post Office no longer requires the branch to be operational for commercial
reasons; or
« where Post Office wishes to remodel or restructure the branch and the postmaster
does not wish to run a remodelled or restructured branch.
Determining whether Post Office has reasonable and proper cause to terminate will be
done following the investigation and documented in the Termination Rational Document
(see 4.2 and 4.3).
4.12. No material breach by Post Office
Post Office will need to consider whether it has complied with its own contractual duties in
relation to matters relevant to the reason for termination. This should be done at the
termination rationale stage (see 4.3). If Post Office has materially failed to comply with its
own contractual duties in relation to the matters relevant to the reason for termination, it
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is not entitled to terminate on notice. A minor or trivial breach of Post Office’s obligations
would not be deemed as a material breach for these purposes.
The Contract Advisor must inform themselves of the surrounding circumstances and wider
events within the Post Office business as far as possible in order to minimise the risk of
terminating a postmaster where Post Office is itself in material breach.
Relevant matters will depend on the reason for termination but might include:
« whether Post Office has complied with its duty to provide adequate training and
support to the postmaster;
« whether Post Office has complied with its duty to investigate shortfalls; and/or
checking if there were any known issues with Horizon (in the case of shortfalls).
4.13. Notice period
Where Post Office decides to terminate a postmaster’s contract on notice, it will need to
consider what period of notice is appropriate to give the postmaster.
The upper limit (the maximum notice Post Office will be expected to give to a postmaster)
for notice periods is typically 12 months.
The lower limit (the minimum notice Post Office will need to give a postmaster) varies by
contract type. Typically these minimum notice periods are as follows, but Post Office must
check the relevant clause in the postmaster's contract before proceeding as some
termination rights may be subject to different minimum notice periods:
e Mains contract: 12 months;
e Locals contract: 6 months;
« Subpostmaster (SPSO) / Modified Subpostmaster / Community Subpostmaster
contract: 3 months;
e Other contract types: minimum notice period specified in the contract.
It is important to remember that these are minimum notice periods, and that an
assessment needs to be undertaken to determine the appropriate notice period in each
case.
« The factors that Post Office will take into account when considering what notice
period to give postmasters include:
e The length of service of the postmaster;
e The level of investment made by the postmaster in purchasing the Post Office
branch;
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e« Whether the postmaster lives in residential accommodation that is part of the
business premises;
e The reasons why Post Office want to bring the contract to an end.
Post Office will not take into account irrelevant factors when determining the
notice period, such as:
« Whether the postmaster has made any complaint to Post Office about any matter;
or
* Whether the postmaster is making a claim against Post Office.
Post Office and the postmaster may mutually agree a shorter notice period than stated in
the contract. This will need to be formally documented in writing.
Post Office will also be bound by any minimum term in the postmaster’s contract. Post
Office will not be able to terminate before this minimum term has come to an end, except
as permitted in the contract or if there was a repudiatory breach. Post Office will not
generally offer payment in lieu of notice (PILON) to a postmaster unless this is requested
by the postmaster, in which case, Post Office will consider the request.
4.14. Informing a postmaster of termination
The postmaster will be informed by the Contract Advisor as soon as practicable after the
decision is made to terminate their contract. The Contract Advisor will make every effort
to inform the postmaster in a clear and professional manner. The decision, and the
rationale for the decision, will be put into a termination letter, which will be sent to the
postmaster.
When informing the postmaster of the termination of their contract, the Contract Advisor
should outline the following to the postmaster (subject to any restrictions on disclosure
(see 4.2 above)):
e The reason(s) for the termination, including the factual circumstances and
contractual basis;
e That their contract is being terminated in accordance with their contract and Post
Office's termination policy, a copy of which can be made available to the postmaster
on request;
« That an investigation into the circumstances giving rise to the right to terminate
has been carried out and that the information and records relating to the
investigation have been/will be made available to the postmaster;
« Whether the termination is immediate or with notice;
« If the termination is with notice, how much notice is being given; and
e Any other relevant information and practicalities that should be shared with the
postmaster.
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4.15. Decision review
Post Office recognises that if a decision is taken to terminate a contract, the postmaster
may not agree with the decision taken. In these circumstances a postmaster may
challenge this decision in which case a panel, consisting of independent members, will
review the decision.
The Postmaster Termination Decision Review policy sets out the procedures to be followed
should a postmaster wish to challenge the decision to terminate the agreement and
clarifies who will be involved in the process.
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5. Where to go for help
5.1. Additional Policies
This Policy is one of a set of policies. The full set of policies can be found on the SharePoint
Hub under Postmaster Support Policies.
5.2. How to raise a concern
Any postmaster (whether a limited company, partnership, limited liability partnership or
an individual), any postmaster’s staff or any Post Office Employee who suspects that
there is a breach of this Policy should report this without any undue delay.
If a postmaster or any postmaster’s staff are unable to raise the matter with the area
manager of the relevant branch or if a Post Office Employee is unable to speak to her or
his line manager, any person can bring it to Post Office’s attention independently and
can use the Whistleblowing channels for this purpose. Any person can raise concerns
anonymously, although disclosing as much information as possible helps ensure Post
Office can conduct a thorough investigation.
For more details about how and where to raise concerns, please refer to the current
Whistleblowing Policy which can be found on The Hub under Post Office Key Policies,
accessed here.
5.3. Who to contact for more information
If you need further information about this policy or wish to report an issue in relation to
this Policy, please contact Andrew Kingham, Franchise Partnering Director at
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6. Governance
6.1. Governance Responsibilities
The Policy sponsor, responsible for overseeing this Policy is the Retail and Franchise
Network Director of Post Office.
The Policy owner is the Franchise Partnering Director who is responsible for ensuring that
the Head of Contract Management & Deployment conducts an annual review of this Policy
and tests compliance across the Post Office. Additionally, the Franchise Partnering Director
and the Head of Contract Management & Deployment and their team are responsible for
providing appropriate and timely reporting to the Risk and Compliance Committee.
The Audit and Risk Committee are responsible for approving the Policy and overseeing
compliance.
The Board is responsible for setting the Post Office’s risk appetite.
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7. Control
7.1. Policy Version
Date Version I Updated by Change Details
2"¢ March 2020 11 Tim Perkins Draft Version
6" March 2020 1.3 Tim Perkins Legal Review
17" March 2020 1.4 Tim Perkins For working group review
9t April 2020 1.5 Tim Perkins Final Draft with working group
revision
14 May 2020 1.6 Tim Perkins Final draft following further legal
review
6% April 2021 2.0 David Southall, Annual review - initial draft changes
Head of Contract
Management &
Deployment
14 April 2021 2.1 David Southall, Initial legal review
Head of Contract
Management &
Deployment
26 April 2021 2.2 David Southall, Second legal review
Head of Contract Addition of process map
Donleament, & Alignment with other postmaster
support policies
4 May 2021 2.3 Jo Milton Risk appetite amendment
23" May 2021 3.0 David Southall Updated following ARC feedback
Head of Contract including:
Management & Updated to V3.0
Deployment Addition of definitions
Addition of Contract Performance
Rationale
Added linked policy statement to
front page
Added reference to the Group
Investigations Policy to section 3.3
Who Must Comply?
Updated link to section 5.1
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Added footnotes to link to other
policies referred to in this policy.
7.2. Policy Approval & Review
Oversight Committee: Risk and Compliance Committee and Audit and Risk Committee
Committee Date Approved
POL R&CC 4% May 2021
POL ARC 18" May 2021
Policy Sponsor:
Policy Owner:
Policy Author:
Next review:
Company Details
Retail and Franchise Network Director
Franchise Partnering Director
Head of Contract Management & Deployment
31 MAR 2022
Post Office Limited and Post Office Management Services Limited are registered in England and Wales. Registered numbers
2154540 and 08459718 respectively. Registered Office: Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ.
Post Office Management Services Limited is authorised and regulated by the Financial Conduct Authority (FCA), FRN 630318. Its
Information Commissioners Office registration number is ZA090585.
Post Office Limited is authorised and regulated by Her Majesty’s Revenue and Customs (HMRC), REF 12137104. Its Information
Commissioners Office registration number is 24866081.
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8. Appendices
8.1. Examples of immediate termination rights
Examples of immediate termination rights in Locals and Mains contracts
This is illustrative only. Post Office must check the postmaster's contract (as interpreted
following Bates & Others vs Post Office [2019] EWHC 606) which may differ.
Part / Clause ref Description
Part 2, Clause A repudiatory failure to provide Products or Services to the
16.2.2 required standards
Part 2, Clause Ceasing to operate the Basic Business
16.2.3
Part 2, Clause Provision of false or misleading information or omission of any
16.2.4 material fact prior to entering the Agreement
Part 2, Clauses Insolvency events
16.2.5 - 16.2.9
Part 2, Clause Failure to acquire or enter into a Valid Property Interest prior to
16.2.10 taking up occupation of the Branch Premises
Part 2, Clause Changes to the use of the Branch Premises in contravention of the
16.2.11 terms of the Valid Property Interest
Part 2, Clause Breach of the terms of the Valid Property Interest and/or breach of
16.2.12 tenancy, lease or freehold interest which could result in that
interest being terminated or the postmaster being unable to
comply with its contractual obligations
Part 2, Clause Criminal charges (other than a road traffic offence not involving
16.2.13 imprisonment)
Part 2, Clause A repudiatory challenge of Post Office's intellectual property rights
16.2.14
Part 2, Clause A repudiatory failure to properly account for any money due to, or
16.2.15 stock of, Post Office or its clients
Part 2, Clause A repudiatory failure to pay any sum due to Post Office under the
16.2.16 Agreement by the due date
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Part / Clause ref I Description
Part 2, Clause A repudiatory failure to inform Post Office of certain FSMA
16.2.17 regulatory matters under clause 3.6.7 of Part 2 of the contract
Part 2, Clause Unacceptable change or proposed change in the Operator's
16.2.18 regulatory status under FSMA that repudiates the contract
Part 1, Clause Changes to the nature of the Basic Business which Post Office
1.8/1.9 reasonably regard as bringing Post Office, the Branch or its
business into disrepute
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8.2. Termination Rationale
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Document
Termination Rationale Document
BRANCH DETAILS
Branch Name
Branch Code
Contract Type and Code (i.e. Local NT1)
Postmaster Name
Legal entity the contract is with (if
different from above)
Is the Postmaster an absentee (i.e.
managing from a distance)?
YES/NO*
*delete as applicable
If so, please explain the situation
with the Postmaster’s involvement.
If an audit occurred, name the person
in charge present at the audit
Appointment date according to current
contact
Original appointment date (if not same
as above)
Is the contract with a_ Limited
Company?
YES/NO*
*delete as applicable
If so, please list the names of the
Directors:
Is the contract guaranteed by a
third party?
YES/NO*
*delete as applicable
Guarantor Details:
Date Contract Signed
Date Contract Countersigned
Remuneration/fees for last twelve
months (or since opening if less than
twelve months ~ please note)
Associated Retail
What is the date of the last trading
period for this branch?
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Is there an outstanding discrepancy at
this branch?(state amount and age)
Is this part of a group of branches
owned by the same Postmaster?
YES/NO*
*delete as applicable
If so, please advise the other
branches operated
And advise the audit results at other
branches
Date of precautionary
suspension (if different to date
of audit please explain why)
BACKGROUND TO CASE
Background to case
Details of what is alleged to have
happened - reasons that were the
cause of the suspension decision.
Include details from Audit report
(discrepancy, any comments etc.)
CASE INVESTIGATIONS
Investigation Details
Details of investigations
undertaken (apart from meetings
with the Postmaster, consider all
areas where investigations have
been undertaken and details of
information obtained)
Application Details:
e.g. financial assessment
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Training:
Detail what training was delivered
and who received the training at
appointment and details any
additional training POL has
provided (including a check on the
Branch Contact File)
Registered Assistants:
Branch Support Call Logs:
Horizon Data Review:
To include: cash declarations
made prior to the audit, trading
statement details and any other
pertinent information.
Summary of findings from the
Tier 3 report (if applicable):
Postmaster Accounting
Support Team update:
Postmaster’s History:
i.e. service length and record, any
previous written directions or
warnings and how POL followed up
on any warning and direction and
provided necessary support and
training during/afterwards
Notes from contact with
Postmaster, through the
course of the investigation:
Are there any other relevant
areas of investigation, not
already recorded above?
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CASE DECISION MAKING
Criteria for Consideration
a)
What is the impact on the
Postmaster, were we to terminate,
and how has this impacted the
decision you have made?
b)
What is the direct involvement or
responsibility of the Postmaster in
the actions that led to the breach
and can this be mitigated? For
instance, is the Postmaster posing
the risk or have they been
unaware of events caused by
assistants?
°)
Risk to POL funds
d)
Risk to POL brand or reputation of
the Postmaster continuing to
operate the Branch
e)
What is the impact of the decision
on customers and suppliers?
Has someone suffered loss or
damage as a result of the breach?
This could be the Postmaster,
Customer, POL themselves or
suppliers. Please detail who and
how.
9)
Please note any relevant
information provided by the
Postmaster as part of an informal
discussion/ telephone
conversation/ written explanation.
(It is for the Contract Advisor to
exert their judgement in each
individual case to ascertain
whether the circumstances and
reasons given are pertinent to the
decision taken.)
h)
Postmaster’s history i.e. service
length and record, any previous
written directions or warnings and
how POL followed up on any
warning and direction and provided
necessary support and training
during/afterward
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i) Were there any breaches by the
Post Office?
j) Was any legal advice obtained? YES/NO*
(please do not enter the advice *delete as applicable
here)
k) Any other comments to support
your decision
Factors for or against in determining whether precautionary suspension is
appropriate (this is not a numerical analysis and the importance of each
item must be considered).
Factors supporting re-instatement Factors supporting termination
Breaches of the Agreement / Contract I
Detail information identified from the investigation against each breach of the
Contract/manual identified as a result of the investigation (provide clause details and
section and clause numbers). Reference to appropriate sections of the manuals that have
been breached.
(Enter the contractual breach/es identified and provide a narrative against each breach.)
Write what the breaches are - what is the evidence - nothing new in this section -
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Recommended Decision:
Decision to be selected from the following options:
- Re-instate
- Re-instate with conditions (specify conditions)
- Terminate immediately - (specify contractual basis (clause reference))
- Terminate on notice (specify contractual basis (clause reference) and specify notice period
Rationale to support recommended decision (only refer to the reasons which were relied
upon to terminate)
[i.e. why have you recommended this course of action and excluded the alternative options above, based on the balance of
probabilities. Include your consideration of the Postmaster’‘s interests in light of this decision]
Contract Advisor Details
Name of Contract Advisor completing decision document:
Date completed:
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Contract Termination Decision Review Group
Review Group Members (Name and job title of reviewing managers):
Reviewing Manager decision on case:
(if the decision is changed give reasons)
Business Improvements
Note: This section is to note any potential business improvements which have been raised
through the investigation.
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8.3. Process map
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