Community Dental Centres Limited v Sultan-Darmon (2010)

Community Dental Centres Limited v Sultan-Darmon (2010)

In the case of Community Dental Centres Limited v Sultan-Darmon, the Employment Appeal Tribunal solidified what constituted to a fundamental right of substitution. Simultaneously, this case provided valuable guidelines for professionals providing services in the healthcare industry.

Dr Sulton-Darmon worked for the End Client Community Dental Centres Limited (“CDC”) on a consultancy basis. He worked there between 2002-2009 as a Dentist. Primary care trusts would contract with CDC for dental services. These services were provided by Dr Sultan-Darmon or other contractors holding a similar position.

There were numerous factors indicating that Dr Sultan-Darmon was being treated as a disguised employee. Firstly, Dr Sultan-Darmon appeared to be heavily controlled as he was required to work fixed hours by CDC, limited to time he could take off and was on a roster for on-call emergencies. Additionally, CDC provided him with: basic equipment; support staff; a premises to work from; introductions to patients requiring dental work and monthly patient targets.

In contrast to this, there were also factors that supported his employment status as an independent contractor: the substitution clause in the contract had been exercised by other dentists; Dr Sultan-Darmon was paid per patient / per unit of dental activity; Dr Sultan-Darmon provided his own work wear; liability for bad debts were split equally between both parties; the contract accurately reflected the working practices; Dr Sulton Darmon provided his own insurances; CDC were indemnified for any defective works as a result of negligence; Dr Sultan Darmon could undertake private work and he has to meet some of the costs of the laboratory work generated from treating patients. As a result of the plethora of these factors, on balance it was clear that they outweighed any argument that Dr Sulton Darmon had an employment relationship with CDC.

What can healthcare professionals learn from this case? Firstly, not receiving holiday pay or sickness benefits will not be enough to distinguish an independent contractor from an employee. Secondly, it would always be advised to be paid per patient to allow you to demonstrate that financial risk is present and that there is no mutuality of obligations. This is because you would be in control as to when you pick and choose which patients to see and when. This is also distinguishable from an employee who is paid at an hourly or daily rate or alternatively an annual salary. Also, some items such as: being on call, having targets set by the client, working fixed hours, can counter-balance with factors that demonstrate independence from the client. Finally, it is of paramount importance to ensure that a contract accurately mirrors working practices. For example, Dr Sultan Darmon’s contract stated that he was “a self-employed independent contractor dentist with full clinical freedom and accepting full clinical responsibility”. This is a powerful clause as it includes 3 key IR35 elements: Dr Sultan-Darmon has autonomy in relation to his work; he bears financial risks of any errors (he is not covered by CDC’s insurances) and it was intended for Dr Sultan-Darmon to be engaged on a self-employed basis.

Substitution was an imperative component in this case. The substitution clause within the contract between both parties read as followed: “In the event of your failure (though ill-health, maternity leave or other causes excluding up to 30 days’ annual holiday allowance) to utilise the facilities for a continuous period of 5 days you shall make arrangements for the use of the facilities of a locum tenens acceptable to [CDC] and in the event of your failure to make such arrangements [CDC] shall have the authority to appoint a locum tenens if possible to act on your behalf who should be your servant or agent and shall be paid by you”. The Employment Appeal Tribunal confirmed that a substitution clause can be detrimental to a claim of disguised employment where: the contractor accepts responsibility for the substitute, for example where the contractor pays the substitute through their limited company; where a contractor can demonstrate that substitution has be exercises in practice, for example contractors working alongside Dr Sultan-Darmon had provided a substitute and where the clause is not limited to circumstances where you are unable to perform the services, for example through ill health or maternity leave.