Employee, Worker or Self-Employed?
The thorny issues regarding the status and rights of staff working in a dental practice continues to provoke debate and issues.
A recent case has examined when so-called “self-employed” associates, hygienists and therapists are in law classified as “workers” under The Employment Rights Act 1996 and, in fact, enjoy rights to the statutory minimum level of paid holiday, statutory maternity & paternity pay, the right to the National Minimum Wage and protection against unlawful discrimination.
In the case of Sejpal v Rodericks Dental Limited, Mrs Sejpal was engaged by Rodericks as an associate dentist. Mrs Sejpal went on maternity leave in December 2018. Rodericks closed the practice where she was working at the end of 2018. Mrs Sejpal claimed others within the Practice were relocated, but she was not ,due to her maternity leave and then claimed unlawful sex and maternity discrimination, unfair dismissal and a redundancy payment.
However, by the time her case reached a preliminary hearing before a Tribunal Mrs Sejpal abandoned any claims based on “employee” status. However, she continued with the claims based on “worker” status. At the initial hearing her claims were rejected on the basis that she was not a “worker”.
Mrs Sejpal appealed to the Employment Appeal Tribunal (“the EAT”).
The EAT noted that under the Employment Rights Act the definition of “worker” includes a situation where A has entered into or work under a contract to “personally perform some work or services for B” but excludes situations where A carries or a profession or business undertaking and B is a client or customer of A’s”
In the employment tribunal Rodericks had argued that the associate contract did not contain a requirement for the associate to personally perform some work as there was an unfettered right of substitution and Mrs Sejpal could instal a locum.
The relevant clause in the associate contract provided that;
“In the event of the Associate’s failure (through il health maternity paternity or other cause) to utilise the facilities for a continuous period of more than 14 days the Associate shall use his best endeavours to make arrangements for the use of the facilities by a locum tenens being acceptable to the Primary Care Trust and the Company.”
The employment tribunal indicated that the above clause was sufficient to constitute an unfettered right of substitution.
The EAT disagreed, noting the following key considerations:=
• Rodericks’ argument that a requirement to provide a locum after 14 days of failing to use the facilities implied an absolute right to provide one before the 14 day period elapsed was rejected;
• The contract did not allow for the appointment of a locum before the associate had been absent for 14 days
• There was an express requirement that the replacement had to be acceptable to Rodericks and not simply that the locum had to satisfy regulatory requirements
• The employment tribunal should have considered how the provision of a locum operated in practice. The claimant’s argument that she had never provided a locum in practice was not challenged.
In addition to the above the EAT found the employment tribunal had failed to consider key elements of the statutory definition of worker. In particular, it had not properly considered if the claimant was someone who carried on a profession or undertaking on their own account and entered into contracts with clients to provide work or services for them (and so was not a worker) or was a self-employed person who provided services as part of a profession or business undertaking carried out by another (and so was a worker).
As such the claimant’s appeal was allowed.
Morale of the story
It seems clear that contracts with self-employed persons within a dental practice are going to have to be drafted very carefully moving forward to ensure no “fetter” or restriction is placed on such person’s right to provide a locum or substitute. Ideally the contracts should make it clear that such persons have the right to do so at any time. Any kind of discretionary veto inserted by the Practice Owner will change the contract into one of “worker” status as a minimum and may further lead to employment status. A requirement for such person to satisfy regulatory standards may be acceptable but even here the EAT made it clear that even making the right to substitute subject to these grounds could allow a tribunal to take such requirements into account when considering if the right was unfettered.
Over and above the terms of the contract it seems that what happens in practice is also a very important consideration. If the associate has never, in fact, installed a locum, that fact could well be used to allow a tribunal to find that in fact there was a fetter applied in practice. As such associates should be encouraged to instal a locum in practice if a practice owner wants to avoid the associate being found to be a “worker”.
