A common assumption often made by dentists and dental practice managers alike is that, provided a service agreement states the dentist in question is self-employed, that dentist could never be considered to be an employee of the practice from a legal perspective. This simply is not the case, and the possible consequences for a practice of their dentists being held to be employees can be significant.
Despite the belief the label ‘self-employed’ is sufficient in itself, there are many different factors to be considered when ascertaining the employment status of an individual. These factors range from their treatment by HMRC to the job description in their service agreement. Ultimately, though, the courts will usually make a decision based on whether they consider a ‘mutuality of obligation’ to be present, or whether a ‘personal service’ is being offered, together with a number of other factors, including the issue of ‘control.’
From a legal perspective, ‘mutuality of obligation’ relates to the duty befalling an employer to provide work, as well as the obligation on an employee to accept that offer of work.
The term, ‘control’ has been described as having/possessing ‘the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done.’
Other factors that need to be taken into consideration when deciding upon a dentist’s employment status, include:
- The tax status of the dentist
- Whether or not the dentist has a say in when and how they work (self-employed individuals have a greater degree of freedom in their method of working than an employee does)
- The degree of integration of the dentist into the employer’s business
- The job or title description applied by both parties
- The nature and length of the dentist’s engagement
- Any benefits/insurance they receive from the practice
- Agreements concerning the provision of tools/equipment and who is held to be responsible for their maintenance
- Whether the individual dentist is held to be responsible for providing a substitute in their absence
- Whether or not there is any financial risk for the individual dentist as a result of the arrangement.
Reasons
The employment status of a dentist really does matter, for a number of reasons:
- The type of contract employed will determine the nature of the legal obligations of each party to the other.
- Some core legal protections only apply to employees, such as the right not to be unfairly dismissed, as well as the right to receive statutory redundancy payment. Dentists who are employees are also covered by the ACAS Code of Practice on Disciplinary and Grievance Procedures.
- Dentists considered to be employees are automatically transferred to any purchaser of their employer’s business under the Transfer of Undertakings (Protection of Employment) Regulations Act of 2006.
- Practice principals could be considered liable for negligent acts committed by an employee during their employment. However, such ‘vicarious liability’ is unlikely to extend to dentists who are considered to be a self-employed individual.
- All employers are required by law to take out employer’s liability insurance to cover the risk of employees injuring themselves at work. In most cases, dentists who enjoy self-employment status may not be covered by this insurance.
- Employers owe employees statutory duties relating to health and safety, something that would not necessarily apply to dentists considered to be self-employed.
For more information on the ASPD call 0800 458 6773 or visit www.aspd.co.uk