Associates' employment status

Self-employment has long been the default status for associates in general dental practice.

Discussions with our members over the years, and more recently, have confirmed that most practice owners and associates prefer the self-employed model to any other. We have therefore sought to protect that position. The UK has a three-tiered employment status framework: self-employment; employment and ‘worker’ status. Worker status is something in between being an employee with full employment rights and being completely self-employed with no rights. Importantly though, it is still a form of self-employment.

There are pros and cons to the various employment statuses. Learn about the differences and what it might mean to change status.

Why are associates typically self-employed?

There are a small number of employed associates in the general dental services. The vast majority are self-employed. This is due largely to contracting arrangements with the NHS.

In England and Wales, practice owners tend to be the NHS contract holder, or the Provider, having tendered for the business. That contract enables them to engage other practitioners to deliver the care to target. In Scotland and Northern Ireland, individual NHS dentists have their own NHS contract.

Is this likely to change?

Maybe, depending on the circumstances.

There are a number of factors which could influence the future employment status of associates:

Developments in employment law

In 2017, the government published a review of modern working practices written by Lord Taylor. It has said it would implement recommendations from that report, but has not been specific. It is possible that implementation of some of the recommendations could impact on self-employed status of associate dentists. We will not know more until the government publishes details of any plans.

More recently, Employment Tribunal and Employment Appeal Tribunal decisions have indicated that some associates may now be considered workers and therefore have some employment rights. The most relevant of those rights being protection from unlawful discrimination and paid holiday.

As ever, much will depend on the individual circumstances of the relationship between the practice owner and associate. At present, we believe the recent tribunal decisions are only relevant to practices providing care in England and Wales in view of the differing contracting arrangements with the NHS in Scotland and Northern Ireland.

Changing times and preferences

In recent years and especially coming out of the COVID-19 pandemic, we’ve seen reasons to review this default position. Not all practice owners in England passed on the payments to associates despite NHS England’s expectations so a worrying number of associates were treated unfairly, prompting some to see benefits in employed status where they did not before.

In 2021, we held a series of focus groups discussing the preferences of associates and practice owners in England and Wales. We asked if they were content with the current position or, whether in light of recent legal and tax developments and a changing commercial environment more widely, there is an appetite for something different - the employment of associate dentists or engaging with them as workers. 

The majority of associates and practice owners stated a preference for continuing self-employment. However, the focus groups also revealed:

Having greater control and paying less tax/NI were seen as the main benefits of self-employment but employment rights were seen as appealing, particularly coming out of the pandemic.
Associates working in England felt that NHS dentistry was no longer an attractive route for dentists. Many feel dissatisfied and expressed a desire to move into private practice. They did not believe NHS working conditions and constraints would change if associates were employed.
Practice owners expressed concern over the grey areas of employment status, and the risk of HMRC pursuing them as a consequence. The locum clause within associateship agreements (which requires the associate themselves to engage a locum) and the degree of control given to associates were deemed contentious.
Practice owners felt that productivity would suffer if associates moved to an employed status. Since UDA targets had been suspended in Wales some practice owners claim to have seen evidence of this. It was felt a basic salary with bonuses for meeting targets would incentivise associates to deliver parity in their performance as self-employed practitioners.
Dentists in Wales felt that the current system being implemented for NHS dentistry was more suited to associates being employed. Some newly qualified associates favoured this model.
If there was to be a shift in the profession, then the BDA should be involved in shaping any future models and should continue to offer guidance to the profession.

System reform

If associates are to remain self-employed, they will need to retain control over the work they do and the amount of money they can earn. For associates to be control the work they do and their income, there needs to be a clear measurement of how much work associates are doing. UDAs for example, despite their other faults, do provide that clear measurement.

We are working with NHS England to arrive at a different contract model for the remuneration of NHS dentistry. We will fight to ensure that any measurements will allow associate performance to be measured so that associates can be paid on their performance. This will help ensure there are no consequential alterations on the employment status of any of the dentist workforce.

Wales is further ahead on system reform. On 1 July 2021, the Wales Minister for Health and Social Services indicated that there will be no return to target-based contract for high street dentistry left behind during the pandemic. To ensure remuneration is fair and proportionate, some metrics will be required to enable owners to pay associates. We are working with the Chief Dental Officer to achieve a system that both patients and providers are happy with and that respects the needs of dentists engaged to deliver the care.

HMRC’s approach

HMRC has for many years accepted that associate dentists are almost always self-employed. Its guidance included mention of our associate agreement in its employment status manual but as of April 2023, this paragraph will be withdrawn.

Jolyon Maugham QC reviewed our model associate agreement and in this video considered the impact of the withdrawal of HMRC’s guidance on the self-employment status of associates.

Thankfully, we believe that the withdrawal of this old guidance has no impact on the self-employed status of the majority of associate dentists. Indeed, HMRC has told us that they see this as a change to their guidance, not as a change to the self-employment status of associate dentists.

We can also continue to rely on ESM4030 until April 2023, and HMRC will not be using the withdrawal of the guidance as a reason to open retrospective enquiries into periods prior to 6 April 2023.

To maintain self-employment status in the eyes of the Revenue, you should ensure adherence to the principles outlined in our advice . Make sure you look at your agreement and take advice. Members can get their agreement checked as part of your membership entitlements.

The pros and cons

The following blog and video outline the facts about self-employed and employed statuses and present the advantages and disadvantages of each.

Control is a key factor. The more control a practice owner has over the associate and their work, the less self-employment can be argued. Take-home earnings are also a big differential for the associate, while national insurance and tax is a big consideration for the employer.

Blog: A different type of associate and practice owner relationship
Video: Employment (06:24)

A change in the legal status of associate dentists: your options

In view of the factors identified above, it may now be that in some circumstances where an associate has previously been regarded as self-employed, they are more likely to be a worker. Where this is the case, it is crucial that the parties recognise the reality of their relationship and choose a contract that reflects that reality if potential liabilities are to be mitigated or avoided altogether.

To help you make your choice, we have updated our model associate agreements and have two versions available for members:

an updated version of our model agreement where the associate is engaged on a self-employed basis. This may be the most suitable option for parties who wish to retain full independence; and
a new model associate agreement where the associate is engaged as a worker. For associates who want a little more protection, and practice owners who want to minimise their legal exposure, this may be the preferred option.

This microlearning resource provides an overview of worker vs non-worker contracts. It uses short video, templates and an interactive guide to the different key contract clauses to help both practices and associates develop mutually-beneficial, compliant, commercial relationships.

Microlearning: worker vs non-worker contracts

Template contracts can be downloaded from the learning module above.

Private practices

The situation with associate dentists in private practice is less clear. We believe that, to a large extent, whether an associate dentist is a worker will depend on whether the associate is working for the patients, or whether the associate is working for the practice.

If patients understand that any agreements they have for treatment are with the associate and not the practice, then a tribunal is likely to consider that the associate is working for the patient, and they are not a worker. The traditional form of self-employment would therefore be appropriate. However, if the patient believes they are being treated by the practice and that they are paying the practice, rather than the associate, for the work, then it is likely that the associate will be considered to be doing work for the practice on a patient of the practice and is therefore a worker.

Private practices which prefer to have their own brand as a practice may wish to engage associates on a worker contract. Whereas private practices which are happy to be more of simply a facilities provider may prefer to engage associates on the fully self-employed model.

Associates and vicarious liability

There have recently been some cases where practice owners have been found to be liable for the work of associate dentists. There has been talk that this may affect self-employed status of associates dentists. We do not believe it will.

The legal tests relating to vicarious liability are different to the tests for self-employed status, even if there are some common areas.

Practice owners may conduct more checks on associates to ensure that the work done by associates is good, and practice owners may want to work with associates to ensure that patient complaints are dealt with well. These checks and complaint handling should be done with practice owners and associates working together. Clinical audits should be no different to any other check on the performance by one commercial party of another commercial party.

Practice owners should not be too prescriptive. Treating associates like employees could make them employees in the eyes of the law. Likewise, associates should cooperate sensibly and professionally with practice owners. Practice owners faced with non-cooperate associates may decide that the safest course of action is to give the associate notice of termination.