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Postmaster support
policy
Version 5.0
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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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Contents page
1 Definitions...
1.1 Definitions.
2 Overview
2.1 Introduction...
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 and responsibilities.
3.5. Minimum control standards...
4 Procedure
4.1 Termination rights...
4.2 Review...
4.3 Contract Decision Termination Rationale.
4.4 Alternatives to termination ..
4.5 Immediate termination (without notice) .
4.6 Repudiatory breach...
4.7 Other immediate termination rights.
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 Office....
4.12 Notice period.....
4.13 Postmaster Contract Termination Decisions Committee..
4.14 Informing a postmaster of termination...
4.15 Decision review ....
4.16 Business improvement opportunities...
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5 Where to go for help...
5.1 Additional policies...
5.2 How to raise a concern..
5.3. Who to contact for more information...
6 Governance
6.1 Governance responsibilities...
7 Document control
7.1 Document control record...
7.2 Oversight committee.
7.3, Company detail:
8 Appendices...
8.1 Examples of immediate termination rights.....
8.2 Contract Termination Decision Rationale...
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1 Definitions
1.1 Definitions
1. Postmaster Contract Termination Decision Committee (“Committee”) - The purpose
of Committee is to take and authorise all decisions taken in respect of postmaster contract
terminations and reinstatements ensuring that any decision taken is done so within a legally
and procedurally compliant and ethical framework.
2. Review — A review into the matter that may give rise to Post Office exercising its termination
rights undertaken by the Contract Advisor.
3. Postmaster or postmaster- this refers to a limited company, partnership, limited liability
partnership, other entity or individual that contracts with Post Office for the operation of a
Post Office® branch
4. Repudiatory Breach - A breach of the postmaster's contract/agreement that is so serious
and fundamental that the contract cannot continue.
5. Contract Termination Decision 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 Postmaster
Contract Termination Decision Committee.
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2 Overview
2.1 Introduction
The Retail Engagement 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 any postmaster? 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.
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 a decision 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
postmasters, 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 soare asked to meet contractual obligations as set
out in the agreements.
In this policy, “network” means branches not directly managed by Post Office.
? In this policy, “Post Office” and “Group” means Post Office Limited.
3 In this Policy “postmaster” refers to a limited company, partnership, limited liability partnership, oth er entity or individual that
contracts with Post Office for the operation of a Post Office® branch
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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:
* —areview 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;
* consideration is given to the postmaster's particular circumstances before deciding, acting in
good faith, that Post Office should terminate the contract;
termination only happens when it is necessary and alternatives have been considered; and
* 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 all Post Office employees* who manage postmaster contracts on behalf
of Post Office and defines the minimum standards to control financial loss, postmaster impact,
regulatory breaches and reputational damage in line with the Post Office’s Risk Appetite.
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;
* 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
exercise any discretion in accordance with the obligations of good faith, fair dealing,
transparency, co-operation and trust and confidence.
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 postmaster’ staff.
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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, ie. if Post Office has not complied with its own
material obligations, relating to the matters that Post Office considers give it the right to
terminate, 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;
* arreduction 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 3.5 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 risks around service and support provided to postmasters.
e Averse risk appetite towards risks around our core operational processes that impact
postmasters.
° Averse risk appetite to being non-compliant with our statutory and regulatory obligations.
« Averse risk appetite for financial crime to occur within any part of the Post Office or the
network.
* Averse risk appetite in relation to unethical behaviour by Post Office employees.
e Averse risk appetite to risks around disputes and litigation.
Cautious risk appetite towards the risk of service interruptions that would considerably
reduce branch availability across the network resulting in the inability to serve customers.
Post Office acknowledges however that in certain scenarios even after extensive controls have been
implemented a risk may still sit outside the agreed Risk Appetite/Risk Tolerance. Risks outside of
Appetite/Tolerance may be presented to the relevant governance forums for escalation/agreement of
the risk position.
If a risk is identified which is outside of agreed policy a risk exception note will be required, 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 postmaster contract risks throughout the business and network in line
with Post Office’s risk appetite. The framework includes the following policies:
* Postmaster Onboarding
e Postmaster Training
e Postmaster Complaint Handling
e Network Monitoring and Branch Assurance Support.
e Network Cash and Stock Management
« Network Transaction Corrections:
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« Postmaster Account Support
e Postmaster Accounting Dispute Resolution
« Postmaster Contract Performance
e Postmaster Contract Suspension
e Postmaster Contract Termination (this policy)
« Postmaster Contract 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 and responsibilities
e Audit, Risk and Compliance Committee — is the Committee of the Post Office Limited Board
which reviews and approves Postmaster Support policies.
* Risk and Compliance Committee - is the standing committee of the Group Executive who
review and approve Postmaster Support policies for recommendation to the Audit, Risk and
Compliance Committee.
e Retail Engagement 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 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;
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© complete the Contract Termination Decision Rationale document before recommending
the termination of a postmaster’s contract;
© consult with the Head of Contract Management & Deployment before recommending the
termination of a postmaster's contract;
o 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);
© make the postmaster aware of the support available to them, including from the National
Federation of Sub Postmasters;
© deal with any contact (written or otherwise) from the postmaster, in a timely manner; and
© ifa meeting is required, be flexible, within reason, over the availability of the postmaster.
* Postmaster Contract Termination Decision Committee — A committee whose role it is to
review and authorise termination decisions in line with the procedures set out in this policy.
« National Federation of Sub Postmasters (NFSP) — is a professional trade association which
exists to support postmasters.
* Postmaster - refers to a limited company, partnership, limited liability partnership, other
entity or individual that contracts with Post Office for the operation of a Post Office® branch.
As many postmasters are limited companies or partnerships (and as individual postmasters
may appoint managers to operate a branch on their behalf) any steps that need to be taken
by a postmaster under this policy can be taken by someone authorised to act on that
postmaster's behalf (such as a director or partner).
In relation to this policy, the postmaster is expected to:
© be transparent and open towards Post Office;
© 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;
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© arrange legal representation or other support for any written correspondence or
meetings with Post Office;
co let their NFSP representative, legal representation or other support talk on their
behalf during any meeting with Post Office Ltd
© request information and evidence from Post Office in connection with their
potential or actual termination, including in relation to the review
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 A Termination Decision Rationale will be completed I Head of Contract I As required
decision to terminate the agreement without I to support any termination decision setting out the I Management &
terminate reasonable and proper cause. If factors to support the termination and will be Deployment
Post Office itself has not complied I reviewed by legal services who will provide
with its material obligations, assurance on the decision recommended by the
relating to the matters that Post Contract Advisor. All decisions will be signed off by
Office considers give it the right the Postmaster Contract Termination Decision
to terminate, Post Office is not Committee
able to terminate the agreement
and if the decision is made As part of the Branch Control Assurance Head of Monthly
incorrectly it could lead to: Framework, rationale documents, methodologies, Assurance &
and evidential evaluations will be sampled on a Complex
* unnecessary distress and monthly basis by the Branch Control Assurance Investigations
financial detriment to the Framework.
postmaster;
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¢ Post Office may be perceived
as not acting in good faith;
and
* possible legal challenge from
the terminated postmaster.
Loss of If Post Office are not making the All decisions to terminate shall undergo a sign off Head of Contract I Monthly
confidence and_I correct decisions by either: process with review by the Postmaster Contract Management &
possible «terminating when it does not I Termination Decision Committee with assurance Deployment
financial & have proper grounds to do so; I being provided by Post Office legal services in
reputational or advance of the committee review.
damage © not terminating when it
should, As part of the Branch Control Assurance Head of Monthly
it may lead to a loss of confidence I Framework, rationale documents, methodologies, Assurance &
both across the network and with I and evidential evaluations will be sampled on a Complex
Post Office's stakeholders in how I monthly basis by the Branch Control Assurance Investigations
Post Office manages the Framework.
contractual relationship with its
postmasters. In addition, incorrect I A postmaster has the right to request that any Head of Contract I As required
decisions may lead to financial decision to terminate their contract is reviewed. As I Management &
loss and reputational damage. set out in the Postmaster Contract Termination Deployment
Decision Review Policy® this review will be
undertaken by a panel consisting of both
independent and external members.
® The Postmaster Termination Decision Review Policy (Postmaster Support Policy) can be found in the Postmaster Support Policies on The Hub
httpsi//poluk.sharepoint.com/sites/the hub/SitePages/Postr
aster-Policies.aspx
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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
Annually
Non adherence to the Policy could
Policy non- . . All members of the Contracts Team, the wider Head of Contract I Once approved and
adherence result in legal and regulatory risk I Retail Operations Team and any teams who may I Management & _I annually thereafter (or
as well as reputational damage to I be involved in the decisions being taken will be Deployment sooner in the event of
Post Office and the relationship provided with training on this Policy. material changes to the
with postmasters. Policy)
The Head of Contract Management & Deployment Daily
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 necessary
updated. Head of Contract I As required (but
Management & reviewed at least
Deployment annually)
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4 Procedure
4.1 Termination rights
Post Office can, in certain circumstances, terminate a postmaster’s contract:
* 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 Review
Post Office will carry out a thorough review before exercising any termination rights.
Any review will be a fair and unbiased method of considering issues identified. The process of review
allows Post Office to establish facts and gives the postmaster the opportunity to identify and answer
any issues of concern.
In the review process, the Contract Advisor will seek further information from the postmaster through
written correspondence, telephone conversation(s) or face to face meetings (either in person or by
electronic means).
Post Office will ensure that complete records are kept of all reviews and that any decisions taken in
relation to a review are documented in rationale documents. Records will be retained in accordance
with Post Office's document retention policy.
Details of the review 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;
e data protection law; and
«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 reviewed and its
rights to access information and records relating to the review.
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A process map detailing the contract termination process can be found in appendix 8.3.
4.3 Contract Decision Termination Rationale
Whenever termination of a postmaster's contract is considered, the Contract Termination Decision
Rationale document must be completed by the Contract Advisor. This captures the background of the
case, review undertaken and rationale behind the decision to be taken. The document will be used by
Post Office legal services and the Postmaster Contract Termination Decision Committee 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 (although this does not restrict Post Office Ltd.’s ability to
terminate for a repudiatory breach).
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:
e — (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:
5 The Document Retention and Disposal Policy (Group Policy) can be found in the Group Key Policies on The Hub
https:/poluk.sharepoint,com/sites/thehub/P olicies/Forms/Allitems, aspx?id=% 2Fsites% 2Fthehub%2FPolicies%2FDocumen
1%20Retention%20and%20Disposal% 20Policy%20v1%2E3%2Epdf&parent=%2Fsites%2Fthehub%2F Policies
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«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.
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;
e 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;
* 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);
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.
” The Postmaster Contract Performance Policy (Postmaster Support Policy) can be found in the Postmaster Support Policies
on The Hub https://poluk.sharepoi
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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.
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);
* Ithas reasonable and proper cause to terminate (see 4.10);
e It is not itself in material breach in respect of the matters giving rise to the right to terminate
(see 4.11); and
* Ithas 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).
4.9 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 review process correctly (see 4.2) and completing the
Contract Termination Decision 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.
4.10 Reasonable and proper cause
Depending on the termination on notice wording in the contract, examples of reasonable and proper
cause might include:
* 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;
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e 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).
4.11 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 Contract Termination
Decision 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 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).
4.12 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:
* Mains contract: 12 months;
* Locals contract: 6 months;
* — Subpostmaster (SPSO) / Modified Subpostmaster / Community Subpostmaster contract: 3
months;
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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:
The length of service of the postmaster;
The level of investment made by the postmaster in purchasing the Post Office branch;
« 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.
4.13 Postmaster Contract Termination Decisions Committee
The purpose of the Committee is to sit on a monthly basis and:
e Review all recommendations to terminate a Postmaster’s Agreement and, if the decision has
been taken in line with the relevant contract and Post Office policies, approve; or
e Review all recommendations to reinstate a Postmaster’s Agreement and, if the decision has
been taken in line with the relevant contract and Post Office policies, approve; and
e Ensure that the relevant team has been engaged with and there is a clear line of sight on the
actions required; and
«Ensure the lessons learnt from the Committee are shared with the appropriate team(s) and
monitor progress to completion.
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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;
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 a review into the circumstances giving rise to the right to terminate has been carried out
and that the information and records relating to the review have been/will be made available
to the postmaster;
« Whether the termination is immediate or with notice;
e If the termination is with notice, how much notice is being given; and
¢ Any other relevant information and practicalities that should be shared with the postmaster.
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 and external members who have had no material prior
involvement in the circumstances that led to the termination, will review the decision.
The Postmaster Contract 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.
4.16 Business improvement opportunities
As part of the investigation process the Contract Advisor may identify improvement opportunities or
business issues outside of the decisions being reviewed (for example have avenues of support not
offered to the postmaster been identified). In these instances, the Contract Advisor will capture
opportunities on the Contract Termination Decision Rationale document.
It is the role of the Head of Contract Management & Deployment to follow up on any business
improvement opportunities identified. These will be monitored and tracked.
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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, 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 Speak Up 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, or report online
at: http://speakup.postoffice.co.uk or call the Speak Up Line on
Please note that a postmaster may also contact the National Federation of Sub-Postmasters (NFSP)
for help and support.
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 Tracy Marshall, Retail Engagement Director at!_
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6 Governance
6.1 Governance responsibilities
The Policy sponsor, the Group Chief Retail Officer of Post Office, takes responsibility at Group
Executive level for policies covering their areas.
The Policy Owner is the Retail Engagement Director who is responsible for ensuring that the content
is up to date and is capable of being executed. As part of the review process, they need to ensure
that the minimum controls articulated in the policy are working or to identify any gaps and provide an
action plan for remediation
Additionally, the Retail Engagement Director and the Head of Contract Management & Deployment
are responsible for providing appropriate and timely reporting to the Risk and Compliance Committee
and the Audit, Risk and Compliance Committee as required.
The Audit, Risk and Compliance Committee are responsible for approving the Policy and overseeing
compliance.
The Board is responsible for setting Post Office's risk appetite.
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7 Document control
7.1 Document control record
Summary
GE Policy sponsor Standard owner I Standard implementer Standard approver
Martin Roberts (Group Tracy Marshall (Retail David Southall (Head of R&CC/ARC
Chief Retail Officer) Engagement Director Contract Management and
Deployment)
Document Review
Version I Policy — effective date Policy location
Period
Postmaster Support
5.0 Annual 12/2023 Policies on SharePoint
Hub
I
Jose I changes I Updated by
11 2nd March 2020 Draft Version Tim Perkins
13 6th March 2020 Legal Review Tim Perkins
14 17th March 2020 For working group review Tim Perkins
15 9th April 2020 Final Draft with working group revision Tim Perkins
1.6 14th May 2020 Final draft following further legal review Tim Perkins
2.0 6th April 2021 Annual review — initial draft changes David Southall,
Head of Contract
Management &
Deployment
21 14th April 2021 Initial legal review David Southall,
Head of Contract
Management &
Deployment
2.2 26th April 2021 Second legal review David Southall,
Addition of process map Head of Contract
Alignment with other postmaster support policies bomen &
23 4th May 2021 Risk appetite amendment Jo Milton
3.0 23rd May 2021 Updated following ARC feedback including: David Southall
Updated to V3.0 Head of Contract
Addition of definitions Management &
Deployment
Addition of Contract Performance Rationale
Added linked policy statement to front page
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3.1
3.2
4.0
41
42
5.0
INTERNAL
16 November 2021
18 February 2022
1* April 2022
5% July 2022
10" October 2023
I 15 December 2023
Added reference to the Group Investigations Policy
to section 3.3 Who Must Comply?
Updated link to section 5.1
Added footnotes to link to other policies referred to
in this policy.
Annual review
3.1 Updated risk appetite statements to include
Operational statements
1.1 Definition, 3.4 Roles and Responsibilities —
amendment to make up of Contract Termination
Decision Review Group
3.5 Minimum Control Standards and 4.3
Termination Rationale — updated to reflect legal
services review the Termination Rationale
Document
4.15 New section — Business Improvement
Opportunities
8.2 Updated Termination Rationale Document
Updates made to reflect legal review of Decision
Review Policy and changes relevant to this policy.
NFSP review
Amended version number following approval
2.1, 3.4, 3.5, 5.3, 6.1, 7.1 - updated owner and
sponsor
Font updated to Nunito Sans
Annual Review
1.1(and throughout) - Contract Decision Review
Group replaced with the Contract Termination
Decision Committee
1.1 (and throughout) - Definition of ‘Investigation’
changed to ‘Review’ to better reflect what the
Contract Advisors do in reviewing the situation and
determining any necessary action
1.1 (and throughout) - Termination Rationale
renamed Contract Termination Decision Rationale
(plus associated changes throughout)
2.1 Policy owner changed to Retail Engagement
Director (and associated changes throughout)
3.4 RCC and ARC added
3.4 Addition of a note to say that the NFSP
representative, legal representation or other
support talk on a postmaster's behalf during any
meeting with Post Office Ltd
3.5 Assurance review now undertaken by
Assurance & Complex Investigation Team
4,13 Additional section outlining the
responsibilities of the Postmaster Contract
Termination Decisions Committee
5.2 Added Speak Up contact details
8.2 Added latest decision rationale document
Amended version number following approval
Rebranded
Postmaster contract termination policy v5.0
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David Southall
Head of Contract
Management &
Deployment
David Southall,
Head of Contract
Management &
Deployment
Jo Milton
Jo Milton
David Southall
Jo Milton
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7.2 Oversight committee
Oversight Committee: Risk and Compliance Committee and Audit, Risk and Compliance Committee
Committee Date Approved
POL R&CC 10 NOV 2023
POL ARC 27 NOV 2023
Next review: 30 NOV 2024
7.3. Company details
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.
VAT registration number GB 172 6705 02. Registered office: Finsbury Dials, 20 Finsbury Street, London, England EC2Y 9AQ
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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 16.2.2 I A repudiatory failure to provide Products or Services to the required
standards
Part 2, Clause 16.2.3 I Ceasing to operate the Basic Business
Part 2, Clause 16.2.4 I Provision of false or misleading information or omission of any 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 taking up
16.2.10 occupation of the Branch Premises
Part 2, Clause Changes to the use of the Branch Premises in contravention of the terms
16.2.11 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 stock of,
16.2.15 Post Office or its clients
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Part 2, Clause A repudiatory failure to pay any sum due to Post Office under the
16.2.16 Agreement by the due date
Part / Clause ref Description
Part 2, Clause A repudiatory failure to inform Post Office of certain FSMA regulatory
16.2.17 matters under clause 3.6.7 of Part 2 of the contract
Part 2, Clause Unacceptable change or proposed change in the Operator's regulatory
16.2.18 status under FSMA that repudiates the contract
Part 1, Clause Changes to the nature of the Basic Business which Post Office reasonably
1.8/1.9 regard as bringing Post Office, the Branch or its business into disrepute
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8.2 Contract Termination Decision Rationale
Branch Details
Branch Name
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Branch Code
Contract Type and Code (i.e., Local NT1)
Operator Name
Named indi
individual within this document is as
representative of the Operator)
idual (any reference made to this
Is the Operator an absentee
{i.e., managing from a distance)?
YES/NO*
*delete as applicable
If so, please explain the situation with
the Operator's involvement.
If the Operator is an absentee please name the
person in charge of the branch (including
details of the person present at the time of the
Branch Assurance visit (if applicable)).
Appointment date
Original appointment date
(If not same as above, for example if the branch
converted under Network Transformation)
Is the contract with a Limited Company?
YES/NO*
*delete as applicable
If so, please list the Director's names:
Date Contract Signed
Date Contract Countersigned
Fees over last twelve months (or since opening
if less than twelve months — please note time)
Associated Retail (please refer to Preface and
explain any difference with the Agreement)
Details of registered assistants
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Does the Operator hold a Post Office
the branch name(s) and branch code(s).
Agreement at other branches? If so, please list
Background Details
Background to Decision Being Considered
Notes from any meeting(s) held
with the Operator during the
course of the review.
Detail any areas coming from the
meeting(s) held with the Operator
that warrant further review
Case Review
Onboarding Application Review —
relevant details
Details of Onboarding training
e e-learning
* classroom
onsite (including first balance)
Details of early days support
Details of formal training intervention
Details of any branch visits
Review of inbound branch support
call logs for anything relevant to the
matter being reviewed (12 month
review)
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Review of outbound branch support
call logs for anything relevant to the
matter being reviewed (12 month
review)
Relevant supporting branch
transaction data (which could
include cash declarations, trading
statement details and any other
pertinent information).
Was a Network Support &
Resolution Team discrepancy
review report requested? If not,
please explain why.
If completed, summary of findings
from the Network Support &
Resolution Team discrepancy
review report
Any changes to the Central
Postmaster Account since
suspension (if applicable).
Record of any performance history in
branch over the past 12 months:
Record any relevant details from the
Operator's history in the past 12
months prior to this issue (for example
service length and record, any
previous or ongoing written directions
or warnings and how Post Office
followed up on any warning and
direction and provided necessary
support and training
during/afterwards). If required, the
review can go back further than 12
months.
Notes of contact with any other
stakeholder (detailing who they
are, what is their role and why
they have been contacted)
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Are there any other relevant areas
of review, not already recorded
above?
Breaches Of Agreement
Detail information identified from the review against each breach of the Contract/manual id:
as a result of the review (provide clause details and section and clause numbers). If appropriate,
reference to appropriate sections of the manuals that have been breached.
It is important to be clear why the breach is repudiatory and in the analysis why something is not
capable of remedy. It is important to be relevant in the commentary against the suggested breaches
(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 —
Considerations
Criteria for Consideration
a) What is the impact on the
Operator, were we to terminate,
and how has this impacted the
decision you have made?
b) What is the direct involvement or
responsibility of the Operator in
the actions that led to the breach,
and can this be mitigated? For
instance, is the Operator posing the
risk or have they been unaware of
events caused by assistants?
c) Risk to POL funds
d
Risk to POL brand or reputation of
the Operator continuing to operate
the Branch
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e) What is the impact of the decision
on customers and suppliers?
f) Has someone suffered loss or
damage as a result of the breach?
This could be the Operator,
Customer, POL themselves or
suppliers. Please detail who and
how.
g) Please note any relevant
information provided by the
Operator. This can include any
material issues or concerns raised
by the Postmaster that need to be
considered. (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) Operator'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
i) Has Post Office Ltd.’s actions (or
inaction) contributed to the issue?
(For termination considerations only
where the material breach by Post
Office is connected to the basis on
which it is relying to terminate)
j) Any other comments to support the
recommended decision
Factors for or against in determining whether to recommend contract
termination or contract reinstatement
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Factors supporting not terminating Factors supporting termination
Decision Rationale
Recommended Decision:
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 Operator's interests in light of this decision]
The following factors must be considered (where applicable):
a) _ the duty of good faith, which is “The duty of good faith means POL cannot terminate (i) arbitrarily, irrationally or
capriciously (ii) without reasonable and proper cause and / or (ii) in circumstances where POL is itself in breach of
material duty in respect of the matters which POL considers give it the right to terminate”.
b) whether post Office has complied with its own contractual duties in relation to matters relevant to the reason for
termination (in line with section 4.13 of the Operator Contract Termination Policy).
¢) If termination is being considered in addition to demonstrating the contractual grounds for termination it is also very
important to demonstrate why we should terminate
d) if termination on notice is being considered whether consideration has been given to the appropriate period of notice
(in line with section 4,13 of the Operator Contract Termination Policy)
Contract Advisor Detail
Name of Contract Advisor
making recommendation
Date submitted
Head of Contract Management & Deployment Review
Name
Date reviewed
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Legal Assurance
Date submitted
Feedback
Date provided
Decision Making Authority
Name(s)
Rationale for decision
Date completed
Appendix 1 - Operator Contact
Notes from contact with
Operator, through the course of
the review (not including details
of any meetings with the
Operator):
Appendix 2 - Improvements Opportunities Identified
Note: This section is to note any potential business improvements which have been raised through the
review.
Appendix 3 — Relevant Documents
Number
1
ala} wr
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