Many practices use locum GPs to temporarily take over the place of a regular partner or team member. Traditionally they’re self-employed and will have numerous GP practices as clients. This includes locums who work through a limited company. However, the law surrounding such contractor status is complicated, which means that, in reality, situations can become blurred. This may especially be the case where a locum is on a long-term contract, or is juggling self-employment with other salaried work.

Why should a practice manager care greatly about this, you might ask? There’s enough work to do each day without worrying about legal technicalities. If everyone seems happy with arrangements (even if they seem a bit iffy), then what’s the problem?

The problem is that if any individual working for your practice is wrongly defined as a contractor when they’re really an employee, you will quickly find yourself to be non-compliant with tax and/or employment law. These issues can potentially lie dormant for years, but when they rise and bite, they bite hard! Despite some back and forth from the Government regarding IR35 last year, the legislation remains very much in place. Under those rules, some practices could find themselves liable for unpaid tax bills from HMRC. The costs of employment law disputes for issues such as unpaid holidays or unfair dismissal can likewise be excruciatingly expensive.

It’s obviously a good idea for practice managers to keep an eye out for potential risks in this area. I’ll explain the basics below, but be warned, legal questions about employment status can easily fill an entire textbook when explained in full, so this is only a very rough guide.

A contractor will normally submit invoices for payment and is responsible for their own tax arrangements. They have no right to paid holidays, sick pay, or maternity leave, etc. Work arrangements can be ended at any time, so long as they’re in line with the terms of whatever contract for services they work under. An employee, of course, is the opposite to most of this!

This would all be fine and dandy if establishing employed/contractor status were simply a matter of choosing what the GP practice would like it to be. But, in fact, the exact legal status will always depend on the ‘real-life’ arrangements and relationship between parties – and these can slip and change over time. There’s no single easy test to identify whether, say, a long-term locum GP has met the legal definition of an employee for either tax or employment law purposes, but here are some of the factors that a tribunal would consider:

• How the locum’s contract is worded
• The freedom that parties have to offer/accept/refuse work as they wish (often known as ‘mutuality of obligation’)
• The level of control that a practice has over the locum’s work
• Whether the locum could provide a (suitably qualified and vetted) substitute, if needed
• Who provides equipment and resources
• How the practice represents the locum’s status to patients and staff
• Whether the locum is paid via invoice or payroll
• What other GP practice clients the locum has, or is allowed to obtain

To make things even more complicated, sometimes a practice will use an existing salaried GP for locum work, so the individual could be both employed and a contractor at the same time – argh! It’s possible, in theory, to keep such situations legally compliant, but it will take conscious effort by the practice to keep clear boundaries between two different working relationships with the same person. They will need two different contracts, and their working (and pay) arrangements for each must be distinct. Many practices find it much easier/safer to treat this type of locum arrangement as overtime rather than self-employed work.

If you’re reading this and wondering what, if anything, you should do next, here are some suggestions:

1. Consider any contractor arrangements you have with locum GPs (including any salaried GPs who carry out self-employed work) and ask questions which include the following:
   1. Do they have a contract for services with the practice which makes their contractor status clear?
   2. Do they invoice for payment?
   3. Is their working relationship with the practice noticeably distinct from the working relationship you have with employees?
   4. Do they have other clients, or do they only work for you?
2. Ensure you have a set IR35 policy and process to satisfy HMRC’s tax requirements. This may sometimes result in locums coming under the practice’s payroll rather than invoicing – and implies that they may potentially be classed as an employee for employment law purposes as well.
3. If you have any concerns about someone’s employment status, seek specialist legal advice ASAP.

Finally, here are some resources which may be useful:

• Template Locum Policy [PLUS]
• Template Contract for Services (for self-employed contractors) [PLUS]
• Template IR35 Policy [PLUS]
• BMA Handbook for locum GPs (includes a sample locum contract)
• HMRC guidance on assessing employment status