The issue of employment status is a perennially challenging subject across all sectors, with many employers preferring to go down the self-employed route which can bring greater flexibility and fewer rights for workers, despite the well-known risks of a challenge either by the individual or tax authority. All too often employers wrongly believe that by having a robust contract in place it will protect them, yet they fail to consider the true nature of the relationship, which is probably the most critical component in determining the status of an individual. This issue has been a hot topic in England and Wales in the context of so-called "Associate Dentists", and the recent case of Lorna Taylor v (1) Alexia Hewett (2) Brian Hewett (3) A D Hewett Dental Practice (judgment dated 9th December 2015) has sought to provide some guidance on this issue within the Isle of Man.
The Claimant in this case was pursuing a whistleblowing claim, with such protection only open to employees and workers (as defined under the Employment Act 2006 (the Act)), and not for the self-employed. Accordingly, a preliminary hearing was set down to determine the employment status of the Claimant, who had signed a widely-used standard contract approved by the British Dental Association (BDA) within which she was classed as a self-employed "Associate Dentist".
In this case the Tribunal noted that it must look beyond the express terms of the contract towards the true factual situation between the parties in order to understand the status of the individual. Upon considering the matter the Tribunal unanimously held that the Claimant was both an employee and worker for the purposes of the Act.
The Tribunal noted in this case that the BDA had in its own guidance note warned that self-employed "Associate Dentist" status could be compromised if actual daily working practices were too prescriptive. In making its decision the Tribunal held that this was exactly what had occurred. Furthermore, the Tribunal noted that whilst the Claimant was classed as self-employed in the contract and for tax purposes there were a number of examples of control being exerted upon the Claimant. In particular, the Tribunal gave weight to the fact that the Claimant worked regular hours, worked exclusively for the Respondent, and that the Respondent provided the equipment, materials, premises, dental nurse and reception staff.
This case highlights the importance for all businesses, not only dental practices, to consider the true employment status of any self-employed workers, especially in cases where they are considering termination. Where there is any doubt legal advice should be sought, because the termination of self-employed individuals who may possess employment rights such as an "Associate Dentist" contract could potentially expose a business to the possibility of fighting a lengthy and costly unfair dismissal claim.
Mark Emery is an Associate in the Dispute Resolution Department at Appleby Isle of Man who successfully represented the Claimant in this case.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.