Associate contracts - why it's important to take time before you sign

When we launched our associate contract checking service in June 2019, our aim was to help members avoid being mired in professional disputes, which have the potential to disrupt the practice and affect patient care.

In September 2020, the DDU saw a significant increase in the number of requests for contract advice compared to the same period last year. Since launching this service, we have regularly seen flaws and inconsistencies in contracts that are likely to result in disputes further down the line. The source of contractual disputes is often ambiguous wording, which each party interprets in their own way. By the time they realise they are on different wavelengths, it is usually harder to reach a compromise.

In the past, tensions generally surfaced when an associate was on the brink of leaving, but the pandemic has caused such disruption to practice working arrangements and professional lives that contractual fault lines have been exposed much sooner. 

Some of the most common areas of contention include:

  • Remuneration - The pandemic has reduced the number of patients that can be seen and procedures that can be carried out, making it impossible for some associates to achieve the targets set out in their contract. Arrangements for NHS practices should be in line with current guidance from the relevant CDO. Elsewhere, associates and practice owners may need to agree changes that are fair to both parties. Most associate agreements include provision for variations to be agreed, but the relevant clauses dealing with amendments can vary between contracts. Problems can arise if changes are enforced by one side and/or unfairly disadvantage one party.
  • Retained fees - These can work to the advantage of both parties by ensuring remedial treatment can be carried out swiftly and reducing the likelihood of complaints. However, the wording of the associate agreement should clearly set out how much money the practice will withhold, for how long and how the money will be used.
  • Termination and notice periods - Associate agreements generally include termination clauses, which both set out the circumstances when a contract can be immediately terminated, and allow either the practice owner or associate to give the other an agreed period of written notice. Such clauses should apply equally; for example, by not allowing one party to give a shorter notice period than the other.
  • Restrictive covenants - These clauses usually seek to prevent associates from working within a specified radius for a set period of time, but they may have to be considered ‘reasonable’ to be enforceable in a formal dispute. This means taking into account factors like the location of the practice. 

Of course, no self-employed associate contract will cover every possible eventuality. However, the current upheaval highlights the value of having a clear agreement that protects the interests of both parties and that both can enter into in good faith. This is rarely achieved by rushing the process.

While practice owners should already be familiar with their contract, associates are advised to carefully read each clause and highlight anything that makes them uncomfortable, or seems ambiguous. Raise any issues with the practice owner and seek clarification, or negotiate a mutually acceptable variation. It might not be possible, especially with some of the larger groups or corporates, but the ideal scenario is for associates and practice owners to discuss and ensure they have the same understanding of the contract, before signing on the dotted line. Remember that once signed, the contract is a legally binding document.

Associates and practice owners alike can get constructive advice on the wording of associate agreements from the DDU’s contract checking service. In addition, we can check existing or proposed contracts against best practice guidelines and provide a free model contract developed in conjunction with a specialist dental lawyer. While we are unable to help with resolving contractual disputes, we have also negotiated a competitive rate with specialist dental lawyers so members can obtain a legal opinion.

Ultimately, it is in everyone’s interest to invest the time and effort to avoid contractual disputes, particularly at the moment. Both practice owners and associates should appreciate that maintaining a good professional relationship makes for a happier and more productive working environment, which is better for patients.   

This page was correct at publication on 23/10/2020. Any guidance is intended as general guidance for members only. If you are a member and need specific advice relating to your own circumstances, please contact one of our advisers.

David Lauder

by David Lauder Dento-legal adviser

David qualified from Newcastle Dental School in 2002. His post-graduate training included qualifications from the Eastman Dental Hospital and the Royal College of Surgeons, after which he worked in a number of dental settings in the UK and abroad. He has always pursued an interest in the legal aspects of dentistry and has a Master of Laws degree in the Legal Aspects of Medical Practice.