Don’t let anyone start work without signing a contract, says Simon Hocken.
Shakespeare’s line ‘et tu, Brute?’ captured Caesar’s shock at the treachery of his protégé. If you’ve been burned by a colleague you’ll know that when the penny drops, a knife in the back is not a good feeling.
Moments like this happen to principal dentists all the time, and for want of a simple thing; a contract. 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 standoff. Many associates seem to have a basic mistrust of a contract with their principal. I suspect they feel it will limit their freedom.
Key clauses
There are a few key clauses in a contract that 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 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.
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.
Contracts
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.
Tailor made contracts can also guarantee that equipment and support levels from nurses and hygienists are maintained, meaning contract terms can be enforced by the associate if, for example, their nurse is persistently absent or equipment is not fixed in good time.
Associates should always get their proposed contracts reviewed by specialists such as Breathe Legal who will advise and possibly negotiate with the principal if certain clauses don’t sit well with them (often payment terms and sliding scales for payment).
Tailor made contracts really do suit both parties because a principal can add additional restrictions to protect goodwill, such as a bar on informing patients that you are leaving.
My advice is don’t let anyone 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’d like help with your contract get in touch with Sunita Jordan at Breathe Legal on 07770 435375 or [email protected].
