The problem with Uber

Ray Goodman, joint Managing director at Goodman Grant Solicitors, the specialist  dental  lawyers, discusses the potential ramifications of the recent Uber employment tribunal – and why it’s more important now than ever before to have strong associate agreements in place…

In October 2016, two Uber drivers claimed that the company had been acting unlawfully by not paying holiday or sick pay. Uber, in response, insisted that its drivers are self-employed and, thus, not entitled to the same benefits as employees.

The result of this was that the two drivers took Uber to an employment tribunal and, to the surprise of many, the decision ruled in favour of the drivers, stating that they were in this case employees as opposed to self-employed professionals.

This decision, however, now raises cause for concern in relation to the established practice of principals engaging associate dentists, hygienists and therapists in their dental practices, under what purports to be a license to use the premises on a self-employed basis, and, as we know, in return for this, the associate pays a percentage of their gross income to the principal for the use of the facilities.

The main issue here is tax-driven in that associates are generally accepted by HMRC as being self-employed. However, there have in the past been attempts to challenge this practice and it may be that – depending on the outcome of Uber’s inevitable appeal – that if the current judgement ultimately stands, HMRC could look afresh at associates as they could be seen as low-hanging fruit in regards to taxation. There are also employment law issues in that if an associate is found to be an employee they would have rights  not to be unfairly dismissed and  be eligible for  maternity , paternity and other rights.

The judgement in the Uber case is forty pages long and it is the subject of an appeal so a detailed analysis wouldn’t be appropriate at this point. In general, though, the main criteria in determining whether, for the purposes of employment law and tax status, somebody is an employee – that is, working under a contract of employment rather than a contract for services (in the case of self-employed professionals) – is a matter of fact in each case.

One of the main determining factors is the degree of independence of the associate themselves – or, to put it the other way round, the amount of control the principal has over them. For example, is the associate obliged to work certain hours, achieve certain targets, or if it’s necessary for them to gain the consent from the principal for the timing and duration of their holidays. Other factors would be requirements by the principal for the associate to carry out their treatments in accordance with certain plans and pricing structures. In these days of increased regulation and CQC requirements, inevitably there are many more requirements for systems to be in place and adhered to, which could push an associate’s relationship with their principal further towards one of employment rather than one of self-employment.

The outcome of the Uber appeal is awaited with distinct interest; however, the judge in the initial employment tribunal case did specifically say that whilst they concluded,  on the facts of the cases before them, that their was an employment relationship, it would have been possible for Uber to create a relationship that did not amount to employment if their documents and procedures where different.

The lesson to be taken from this is that it is more important than ever to ensure that associates’ agreements and, indeed, any other agreements with staff who are intended to be self-employed, should be reviewed by specialist lawyers, who have a thorough understanding of the nuances of both the dental profession and employment law. If necessary, these agreements should be redrafted to ensure, as far as is possible, that the risk to both principal and associate – in regards to the status of their working relationship – be minimised.

The expert dental legal team at Goodman Grant are closely following this case and are prepared to advise their clients on the best course of action as soon as this becomes clear. With years of experience with the dental profession, they are perfectly poised to help principals ensure their associate agreements are ready for any outcome.

Of course, until the appeal has gone through, we cannot safely say what will happen, but it is worth bearing in mind regardless. By taking steps now in preparation, principals could potentially minimise the complications they may be faced with in the future.

A specialised solicitor with experience in the dental field who cares about your practice can help you manage the legal admin of and advise you on the best way to run your practice. Click here or below to schedule your Free Legal Assessment 

 

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