Lesley Taylor, dentolegal adviser at the Dental Defence Union (DDU) and Alexandra Addington, solicitor at Peninsula Business Services, discuss the three types of employment status and the importance in understanding the difference.
Self-employed, worker or employee? These are the three ways an individual can perform work. It’s important to know the distinction between these terms as it can make a big difference to their rights. So, with that in mind, let’s take a closer look.
Employees are those that are hired directly by the practice to provide a personal service. They are under the control of the practice as well as being part and parcel of it. There is also a mutuality of obligation for the practice to offer work and for the individual to undertake it.
A worker is someone who has a contract to personally perform services for the practice, but they have a substantial amount of freedom over where, when and how much work they do. The work carried out by a worker is often less structured with no guaranteed hours.
If they are in business on their own account, provide their own equipment, have control over the work that they do and how they do it, and can provide a substitute, then they are likely self-employed.
Employment status is a question of fact which is ultimately for a tribunal to decide if a claim is brought. The tribunal will carry out a detailed analysis and will look at the reality of the situation as well as the contractual terms.
Sejpal versus Rodericks Dental
For example, in the case of Sejpal versus Rodericks Dental, the claimant was a dentist who started working for the respondent as an associate. The contract included a substitution clause which required the dentist to use their best endeavours to arrange a locum, acceptable to the Primary Care Trust and the practice, if they did not use the practice facilities for a continuous period of more than 14 days. If the dentist failed to arrange the locum, then the practice could engage one themselves.
Around the same time that the dentist started a period of maternity leave, the practice announced that it would be closing the branch that the dentist worked at when the lease expired. While others were redeployed, the dentist alleged that their contract was terminated on the grounds of their pregnancy/maternity leave.
They argued that they were a worker and that they had been discriminated against. The practice, however, believed that the dentist was self-employed, and their argument centred around the contractual term that because a locum could be sent, the dentist was not, therefore, providing a personal service which is a requirement of being a worker.
This status question was the first thing that the Employment Tribunal (ET) had to consider. The ET held that the dentist was not a worker because they were not employed under a contract personally to do the work. The claims were, therefore, dismissed.
Worker or self-employed?
However, on appeal the Employment Appeal Tribunal (EAT) found that the ET had applied the incorrect test when deciding that the dentist was not a worker.
The EAT found that in determining whether the dentist was a worker for the practice, there must be a structured application of the statutory test:
- The claimant must have entered into or work under a contract with the practice and
- The claimant must have agreed to personally perform some work or services for the practice.
The EAT found that there was a contract in place between the dentist and the practice and, while they could send a locum, there were restrictions in place set by the practice about it. The main point of the contract, the EAT found, was for the dentist to provide a personal service. So, from consideration of these points, the dentist appeared to be a worker.
The next part of the test though is to consider whether the dentist carried on a profession or business undertaking, and if the practice is a client or customer of the dentist because of the contract. If these two points are satisfied, then they are not a worker. The case was, therefore, sent back to a different ET to consider these final two points to establish whether the dentist was really a worker or not.
It is not always straightforward
This case is useful because it reiterates the correct approach when determining status, particularly regarding substitution. It also shows is that it is not straightforward, so it is always best to get specific legal advice in this area.
There are some potential consequences if an individual’s employment status is incorrectly determined.
Employees have more rights than workers. Only employees, for example, qualify for employment protection rights like guaranteed pay, protection from unfair dismissal, redundancy payments, and the right to notice.
Workers have some basic rights including the right to be paid no less than the national minimum wage, protection under equality law, and the right to breaks at work on a daily and weekly basis, as well as to paid holidays.
The self-employed have certain rights in respect of trade unions, discrimination and under the Human Rights Act only. Any other rights will be as agreed between the parties subject to the agreement to perform the work, which is subject to civil law.
If an individual is labelled incorrectly, they could be denied their rights. Ultimately, it could result in claims being brought to the employment tribunal which could be costly for the practice, so it’s important to take specific legal advice to make sure you get it right from the start.
Staff wellbeing is important. DDU Groupcare ensures dental practices and corporate members get access to free 24-hour employment law advice line from Peninsula, a leading provider of employment law and health and safety services in the UK.
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