‘Contractor’ Dentists Really Employees: Fair Work Commission

In an important ruling for dental practices, the Fair Work Commission (FWC) has found that a group of dentists engaged as independent contractors were really employees.

Background

The FWC was required to determine whether the group of dentists were contractors or employees as part of an unfair dismissal claim brought by a former employee of a dental practice located in New South Wales.  The status of the dentists was central to determining whether the practice was a small business employer under the Fair Work Act 2009 (Cth).  The dental practice (respondent) maintained that the dentists were independent contractors and should not be included in determining the number of employees employed by the practice.  The applicant in the matter argued the dentists were really employees and therefore, the employer was not a small business employer.

What the FWC found

Deputy President Cross of the FWC examined the provisions of the Contractors Agreement under which the dentists were engaged.  The Deputy President observed that various provisions were indicative of it being a contract of employment, particularly the exercise of significant control by the practice over the time and places at which the dentists could work.  The Agreement required the dentists to exclusively practice with the respondent and not otherwise be employed, engaged or hold an interest in a competing business within a 10 km radius.  Two weeks of notice was required of the dentists if they were unable to attend their scheduled hours.  The dentists also needed to provide a medical certificate if they were unable to attend work due to illness.  The Deputy President noted that the practice exercised substantial control over the manner in which the dentists were to carry out the work, including complying with directions and policies.  The dentists had no control to remove records or equipment with the consent of the respondent and all patient records made by them remained the exclusive property of the respondent.  The dentists were required to wear a uniform (scrubs) provided by the respondent. 

On the other hand, the Deputy President observed that the Contractors Agreement included some provisions that were indicative of an independent contractors agreement.  Income tax was not deducted from the remuneration paid to the dentists and the remuneration paid related to their professional fees for the services performed, less expenses and a 60% management fee.  No annual leave or personal/carer’s leave entitlements accrued for the dentists.  A $300 daily fee applied in the event a dentist did not produce a valid medical certificate to cover costs incurred by the practice in replacing them.  The Contractors Agreement also specifically provided that the dentist was not an employee of the practice but an independent contractor.

After weighing the evidence, the Deputy President was not persuaded that the dentists were independent contractors:

Viewed practically, none of the Dentists could be viewed as conducting a business of their own of which the work in question forms a part. While the nature of the work, being the practice of the profession of dentistry, can have a greater tendency for engagement as independent contractors, the significant control exercised by the Respondent over the Dentists’ performance of work, place of work and hours of work negates that tendency.

The Dentists perform work at the Respondent’s premises, using tools and equipment provided by the Respondent. The Respondent presents the Dentists to the world at large as part of the Respondent’s business.

In performing the work pursuant to the Contractors Agreement, the Dentists have no opportunity to grow their business, or create goodwill or saleable assets. Dentists are required to treat patients referred to them by the Practice, and those patients are to remain patients of the Respondent and not of the Dentists. Further significant post engagement restraints apply. Their only ability to work for others or in their own name would occur outside their hours of work and, with the consent of the Respondent, outside a 10 kilometre radius.

Chan v Advanced Health Invest Pty Ltd T/A Mastery Dental Clinic [2019] FWC 7824