Are Dentists Workers?
In recent years, employment lawyers have seen a number of cases centring on what defines a worker, an employee or a self-employed person. This has, in part, been prompted by cases from the gig economy, where employers have sought to deny particular rights on the grounds that an individual working for them is not in fact a worker under the relevant employment law.
However, it is not just the gig economy that has been subject to this kind of legal enquiry. A recent case in the Employment Appeal Tribunal has looked at the test for worker status, clarified it further and as a result, introduced what may be far-reaching implications for dentists in the NHS.
The case was that of Mrs N Sejpal v Rodericks Dental Ltd:  EAT 91. Mrs Sejpal started working as an Associate Dentist at Rodericks’ Oxford practice in August 2009. Rodericks is no small local concern; they own and operate over one hundred dental practices across the UK.
In 2010, Mrs Sejpal moved to their Kensington practice. Her final contract with Rodericks was an Associate Contract and was dated 20th January 2013.
In December 2018, Mrs Sejpal went off on maternity leave. Rodericks said that at the end of 2018, the Kensington practice would close as its lease for the premises was due to expire.
Mrs Sejpal said that her contract was terminated, whilst others (who were not on maternity leave) were redeployed to other branches. She submitted a claim to the Employment Tribunal in April 2019, saying that Rodericks were discriminating against her on the grounds of pregnancy or maternity. She also brought claims for unfair dismissal and a redundancy payment, which were later withdrawn as she accepted she was not an employee, and other claims which required her to have ‘worker’ status.
In order for Mrs Sejpal to be protected by the law, she would have to prove that she was a worker or employee as defined by Section 230 of the Employment Rights Act 1996 and Section 83 of the Equality Act 2010. To do this, she would have to show that she worked under a contract with Rodericks whereby she agreed to perform work personally and that the relationship between them was not one where Rodericks was a client/customer of a business operated by Mrs Sejpal.
What did the ET decide?
The Employment Tribunal said that they did not think that Mrs Sejpal was a worker as far as Section 230 of the ERA went, and nor was she an employee under Section 83 of the Equality Act, since she was not a person employed under a contract to do the work personally – she could send someone else to do it, a feature known as substitution. Consequently, they dismissed her claim. She then took her case to the Employment Appeal Tribunal.
What does the law say?
Before this case, the authority on the worker status of dental associates was Community Dental Centres Ltd v Sultan-Darmon UKEAT/0532/09/DA. This was an appeal by a dental practice against an Employment Tribunal decision that Sultan-Darmon was a worker and so could bring a claim for unlawful deduction of wages. The appeal was allowed.
It's also important to remember that when the ET ruled on this case, the Supreme Court’s landmark decision on Uber v Aslam hadn’t taken place.
The legislation on what a worker or employee is can be found in Section 230 of the Employment Rights Act 1996, which reads:
(3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.
The wording of contracts
In recent cases where a claim has hinged on the wording of a contract or agreement between an employer and an individual who is carrying out services for them, an emphasis on the true nature of that contract or agreement has been made; it has been observed that an employer may seek to circumvent the worker or employee status question by the use of clever wording and a tribunal that takes such a contract or agreement on face value, as the tribunal did in this case, will tend to find for the employer. The EAT said
“The ET judge considered that he should give the words of the contract primacy unless the contract was a sham, in the sense of ‘traditional English contract law’
That is not what is required by [Autoclenz Ltd v Belcher 2011]. The Supreme Court held that employment contracts had to be considered differently to other contracts and that it is necessary to determine the true nature of the agreement. There is no requirement for “misrepresentation” or for a putative worker to lack “capacity”, as this passage of the judgment suggests, for an employment tribunal to conclude that the words of a contract do not fully set out the agreement. It is necessary to ascertain the true nature of the agreement and to apply the statutory test in accordance with its purpose.”
The concept of substitution is particularly relevant to the question of whether an agreement is for personal service.
A number of different examples of substitution as it related to personal service were considered in the Court of Appeal judgement on Pimlico Plumbers v Smith  EWCA Civ 51:
“Firstly, an unfettered [that is, without conditions] right to substitute another person to do the work or perform the services is inconsistent with an undertaking to do so personally.
Secondly, a conditional right to substitute another person may or may not be inconsistent with personal performance depending upon the conditionality. It will depend on the precise contractual arrangements and, in particular, the nature and degree of any fetter [condition] on a right of substitution or, using different language, the extent to which the right of substitution is limited or occasional.
Thirdly, by way of example, a right of substitution only when the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance.
Fourthly, again by way of example, a right of substitution limited only by the need to show that the substitute is as qualified as the contractor to do the work, whether or not that entails a particular procedure, will, subject to any exceptional facts, be inconsistent with personal performance.
Fifthly, again by way of example, a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent will be consistent with personal performance.”
There were seven grounds for Mrs Sejpal’s appeal.
Ground One: Written Terms
Ground Two: Mutuality of Obligations
Ground Three: Personal Service
Ground Four: Control
Ground Five: Integration
Ground Six: Vicarious Liability
Ground Seven: Article 14 ECHR.
Ground 6 was not pursued in the light of a Court of Appeal decision earlier in 2022.
Ground 7 was not considered necessary for the analysis of the appeal.
The EAT judgment
The EAT ruled that the appeal succeeded on grounds 1 to 5.
“The erroneous approach of the employment tribunal in concluding that it must apply the strict wording of the contract (because it was not a sham) affected the entirety of the analysis of the agreement, and necessarily means that the appeal must succeed on the remaining grounds…There were also a number of specific errors that resulted from this overall failure to analyse the true agreement between the parties.”
They considered that:
There was a contract between the claimant and the respondent – there was no proper basis on which it could be said that the existence of a contract was vitiated by lack of mutuality of obligation.
There was a requirement for some personal service. The respondent’s contention that this was absent because of an unfettered right of substitution is unsustainable because it is clear that there were fetters on the right to substitute, under the terms of the agreement, and in its practical application. On an overview of the contract, it was clear that its predominant purpose required personal service by the claimant.
However, regarding the questions of whether Mrs Sejpal was a worker or not - whether she carried on a profession or business undertaking and whether Rodericks was a client or customer under the contract of that profession or business undertaking, there was no clear answer and so the EAT has now sent the case back to a different ET to look at again.
Until the decision of the new tribunal, a determination that Mrs Sejpal had entered into, and worked under, a contract with Rodericks whereby she agreed to provide some personal work or services for the respondent will be substituted for the determination of the employment tribunal.
For most NHS dentists, the implications of this judgment will be significant. The relationship between Mrs Sejpal and Rodericks is based on a template provided by the British Dental Association and is therefore likely to be in common use. If Mrs Sejpal does ultimately succeed in her claim, then she would be entitled to such rights as protection from discrimination and holiday pay (with the right to claim for arrears). The same rights would necessarily extend to all affected dentists, which could amount to a great number of cases.
For dentists in particular, but for other employers, it’s crucial to bear in mind that contracts and other agreements will be subject to scrutiny by tribunals in the event that a claim is made. Therefore, it makes sense that you get legal advice on the wording of said contracts and agreements before you need to rely on them.
For more information about this case, visit the Employment Appeal decision webpage. https://www.gov.uk/employment-appeal-tribunal-decisions/mrs-n-sejpal-v-rodericks-dental-ltd-2022-eat-91
The following contractual information supports this case.
Ms Sejpal’s contract contained a clause which Rodericks said was a substitution clause. The terms of that clause are commonplace in the dental profession.
“In the event of the Associate’s failure (through ill health maternity paternity or other cause) to utilise the facilities for a continuous period of more than 14 days the Associate shall use his best endeavours to make arrangements for the use of the facilities by a locum tenens, such locum tenens being acceptable to the Primary Care Trust and the Company to provide Personal Dental Services Plus/Personal Dental Services as a Performer at the practice, and in the event of the failure by the Associate to make such arrangements the Company shall have authority to engage a locum tenens on behalf of the Associate and to be paid for by the Associate. The Company and Associate will agree the method of payment of the locum tenens. The Company will notify the PCT that the locum tenens is acting as a Performer at the Practice. The Associate will be responsible for obtaining and checking references and the registration status of the locum and ensuring that the locum is entered into the Performers list of a Primary Care Trust in England and will confirm to the Company that these requirements have been carried out, The Associate will provide the Company with such relevant information as he may reasonably require.”