By DR SIMON HOCKEN
I’m surprised at how many principals don’t have a proper contract with their associates. To be fair to the principals, I’m surprised how many associates refuse to sign contracts offered by principals in good faith. When this happens, the situation usually persists as an uneasy stand off.
Many associates seem to have a basic mistrust of a contract with their principal. I suspect they feel it will limit their freedom. Actually they’re right, it will.
There are a few key clauses in a contract which protect either the principal or the associate and one of these is the hated barring-out clause.
A lot of associates believe these clauses are un-enforceable. In some cases this is true – if they are unreasonable they will be discounted by any court – however, reasonable barring-out clauses are upheld and protect the principal from their associates opening up on their patch in competition and, more importantly, stealing their patients.
Strong words, you might think. But, let’s be clear about this, patients treated by an associate form part of the valuable goodwill owned by the principal. There’s no grey area here.
The patients can of course go to whichever dental practice they like, but a barring-out clause makes it harder for the associate to take them out of the practice.
All this is academic until it happens. However, there are many, many stories of associates damaging their principal’s practice.
Recently we assisted a client (who wanted to retire) find a buyer for his practice, he having first offered it to his associate at a market valuation. The associate declined and a week before the deal was due to be signed with a new buyer, the local paper published a planning application for the associate’s new practice, less than a mile from our client’s.
The buyer quickly changed their mind and our client was left with no deal and no associate (having given the renegade associate their marching orders).
I can understand associates not wanting to be tied by a contract. However, there are advantages for them in having one. Principals don’t always behave well either.
Amongst their crimes the most frustrating for an associate are: late, wrong or withheld payments, a lack of patients and changes to their hours without consultation. A proper contract will protect against these and many other principal misdemeanours.
Actually, a fundamental reason for having a contract is to protect the associate’s treasured self-employed status. The Revenue would love to see this changed and every now and again they challenge its validity.
However a proper contract such as a BDA or CODE contract will help protect their financial advantage. Incidentally, there are cases of associates claiming they weren’t really self-employed, but employed, at which point the Revenue chases the principal for the associate’s PAYE and NI – even if the associate has already made the payments!
So, let’s agree that a contract is a good idea for both parties. My advice is; don’t let a new associate (or a hygienist/therapist) start work without signing a contract, even if it is a provisional contract to be replaced with a second contract after a trial period.
For existing associates, you principals will have to out-bluff them. Set a date by which you want it agreed and signed and if a Mexican stand-off situation arises, you will have to risk giving them their notice. You can’t be seen to lose this one.
If you need help sorting out your clinicians and their contracts, we have a new Breathe Legal Service to support you in all your HR needs. Please call Ernie on 07990 568909 or email email@example.com for more information.
Breathe Business CPD at the BDA
Dr Simon Hocken is hosting a BDA Training course titled:
Grow your dental practice using effective retail strategies
By the end of the course you will:
- understand what large retailers such as John Lewis can teach you about running a successful practice
- know how to break through your practice’s glass ceiling
- understand the life cycle of your practice
- discover how to take your team with you when implementing change
- know when the bell has rung and it’s time to sell your practice
- gain tips on how to exit your practice well
When: Friday 27 March 2015, 10:00-16:00
Where: BDA, 64 Wimpole Street, London W1G 8YS
Buy a ticket: visit https://www.bda.org/events/Pages/Grow-your-dental-practice-using-effective-retail-strategies.aspx or call 020 7563 4175.
This training course meets the educational criteria set by the GDC for 4 1/2 hours of verifiable CPD and is certified by the British Dental Association.