Associate & Hygienist Contracts
The headline point to note is that a written contract is an essential safeguard for both the Practice Owner and the Associate or hygienist concerned. It promotes certainty and avoids dispute.
Within the dental industry the pre-dominant practice is to treat associates as self-employed persons. This practice is not without uncertainty as associates look very much like the other employees within the business. A written self-employed associate’s agreement can help establish that the relationship is one of self-employment (depending upon the provisions included) but the employment cases have established that the label of “self-employment” within such a contract is by no means conclusive.
Hygienists are sometimes employed and sometimes self-employed. If self-employed the same reservations about their status apply particularly if they work exclusively within the one practice.
The following clauses are likely to appear in a contract for a self-employed associate or hygienist:-
A declaration that the contract is one of self-employment and that the associate or hygienist is responsible for their own tax and National Insurance Contributions. Sometimes the associate is required to give the Practice Owner an indemnity in case HMRC decide the contract is one of employment and ask for Employers’ NICs.
A description of the facilities and staff to be provided to the associate. The clause should provide for breakdowns in equipment and whether the associate is to be compensated if repairs are not carried out within a certain time.
The hours that the facilities will be provided – including details about any Saturday rotas or emergency rotas that the associate will be required to join.
Payment terms will be of crucial importance. For an associate UDA Targets may well be imposed with corresponding provisions dealing with shortfalls in performance. In addition the agreement should deal with liability for bad debts.
Self-employment will be more easily established if the agreement allows the associate or hygienist to provide a suitably qualified substitute. Practice Owners may be reluctant to include such a clause however. Employment cases have also shown that the right to substitute must not be a sham i.e. there must be real prospects of the clause being used if the clause is to be taken as an indicator of self-employment.
Similarly the agreement should set out what obligations are required for the installation of a locum during sickness, holiday and other absences.
Usually the agreement will impose provisions about the amount of holiday that the associate or hygienist can take. HOWEVER this can be dangerous as it can affect the question of self-employment. Arguably a self-employed person is entitled to as much holiday as they want: they simply do not get paid for it!!
The self-employed person’s obligation to provide professional indemnity insurance should be included and the Practice Owner given a right to inspect the relevant policy to ensure it is suitable.
Restrictive covenants preventing competition after departure should also be included. There is a popular myth that these covenants are not worth the paper they are written on. This is not correct. Appropriately drafted covenants are enforceable but the issue must be handled with care.
Notice periods are of crucial importance to both parties and the agreement should also set out certain events which cause the agreement to terminate immediately i.e. loss of professional qualification.
Practice Owners often want an agreement to provide for a retention sum to be withheld from any final payment owing to the associate or hygienist to cover failed treatments arising after departure. It is an issue that is often hotly debated and we can advise as to the current “norm” in such situations.