Associates – employed or self-employed?

David Griffiths is a solicitor member of the Association of Specialist Providers to Dentists (ASPD) and a partner in Maxwell Hodge, Solicitors, based at the firm’s Liverpool Office.

Most principals would consider their associates to be self-employed, and while many associates would agree there are occasions when an associate might claim to be an employee. The distinction between employment and self-employment is important for both parties.

Employees are entitled to extensive rights by reason of their status. They may not be unfairly dismissed and female employees have the right to maternity leave and statutory maternity pay. An employer is required to deduct tax and national insurance from the employee’s earnings and to account for them to the fiscal authorities. Fulfilling these obligations costs the employer money and management time.

So how do you decide whether an associate is an employee or self-employed? For over a 100 years the law has made a distinction between contracts of employment and contracts for the provision of services but, in truth, has found it difficult to settle on a single clear definition. What is certain is that in cases of doubt the law will examine the reality of the situation. It is not enough to stick a label marked self-employed on a contact of employment.

For much of the last century it was said that a worker was probably self-employed if he or she retained control over the work they were required to carry out. However, a heart surgeon may still be the employee of a hospital trust even though none of its managers or executives would be competent to tell him how he should conduct his work. Recognising this problem, the law has moved away from using the control test as a determining factor.

When it has been necessary for the courts to decide whether a person is an employee or self-employed they have looked at a range of factors, including the method of payment, the extent to which the associate can choose his or her hours and methods of working, whether he or she can delegate, who provides the equipment, whether PAYE and NI contributions are deducted from payments, and the way in which the payments themselves are made.

Taking these factors into account it becomes apparent that a number of typical features of associateship could indicate that the associate was actually an employee, with the practice principal usually providing the work and the surgery resources and also specifying the hours the associate will work. Although the fact that PAYE and NI contributions are not deducted from an associate’s salary or wages would suggest self-employment, this in itself is not a conclusive argument.

With the debate being so finally balanced it is important, particularly for the principal, that the relationship is clearly expressed in a written document setting out the factors pointing towards self employment.

It is equally important for associates to have a clear written agreement defining the terms of their appointment. Too often associateships end with the associate complaining that the principal has withheld money unfairly. In these circumstances clear guidelines will help both parties.

If you are a principal and your practice has written associates agreements, to ensure peace of mind they should be regularly reviewed by a lawyer familiar with dental employment law, such as a member of the ASPD. If you do not have written associate agreements it is clearly in your own interest, as well as your associates, to put them in place as soon as possible.

Save you time and money with the right advice, call ASPD today on 0800 458 6773 or email

Original Article: