LOCUM: Employee vs Independent Contractor

Introduction

Many medical practitioners in private practice use a locum when they themselves are not available to practice or need additional help. The locums are often appointed without consideration of the legal consequences or requirements. Legislation distinguishes between an employee and an independent contractor. If the locum is appointed as an employee the rule of vicarious liability comes into play which is not the case with an independent contractor. Contracts currently available to appoint a locum give the contracting parties a choice between being appointed as an employee or an independent contractor; this should be changed in that all locums should be appointed as independent contractors especially if the working of the Consumer Protection Act is also taken into consideration. Furthermore, according to the rules of the Health Professions Council of South Africa (HPCSA) the onus to ensure that the locum is registered and fit to practice, rests with the practice owner.

HPCSA

The Ethical Rules of the Health Professions Act 56 of 1974 determine that a locum cannot be appointed for a period exceeding six months. The locum should also be registered as a health practitioner with the HPCSA (independent practice) and the contract of appointment should be in writing. If the HPCSA would like to see such a contract of appointment, it should be available. Neither the Act nor the Ethical Rules prescribes how a locum should be appointed; as an employee or an independent contractor.

Healthcare practitioners often casually say that they are practicing as or making use of a “long term” or “permanent” locum.  It should be made clear that such terms are inaccurate.  Any arrangement longer than six months implies that the term locum is not applicable. Failure to properly use the term has led to practitioners being formally investigated by the HPCSA.

It is up to the practice owner and the locum to determine the contents of the contract of employment. The important reason to distinguish between an employee and an independent contractor is because the law attaches different consequences to either appointment. If a locum is appointed as an employee, labour legislation will be applicable to the contract of employment, which will not be the case where an independent contractor is involved.

BCEA & SARS

the distinction between a locum employee and locum independent contractor is based on the nature of the relationship between the parties and the specific circumstances. The Basic Conditions of Employment Act (BCEA) and the Labour Relations Act (LRA) provide guidance on determining employment status.

Employee

• An employee is entitled to employment benefits as set by the BCEA i.e. working hours, paid leave, sick leave etc.

  
  

• The employer is responsible to pay PAYE, Skill development levy and UIF to SARS as well as to register the employee with COID

Independent contractor

• An independent contractor is self-employed and is paid to produce a specific result. They are not subject to the same control or direction as an employee and are free to work for more than one employer at the same time. 

  
  

• Independent contractors are responsible for their own obligations to SARS

Employment disputes

If not carefully considered, the use of locums can potentially lead to employment disputes and legal claims against unsuspecting practitioners.

The main reason for this is a legal concept known as vicarious liability. Put simply, vicarious liability means liability without fault: one person (the employer) is held liable to a third party (the patient) for the unlawful or unprofessional act of another (the employee/locum). If the locum is an employee, then the employer (for example the practice owner) may be liable for damages flowing from the locum’s negligent acts or omissions incurred during the course and scope of their employment at the practice.  In other words, the practice owner could be required to pay damages caused by a locum who negligently harms a patient. 

Vicarious liability does not generally apply if the practitioner who caused the harm is an independent contractor. However, there seems to be a misconception that a locum is in all instances not an employee but instead an independent contractor. This is not necessarily the case. A locum may be an employee. Or they may be an independent contractor. If there is any doubt, the specific circumstances and facts pertaining to the relationship will be taken into account. This is why section 200A of the Labour Relations Act is important, because it creates a presumption that a person is an employee.

This presumption highlights the importance, particularly for practice owners and people who make use of locums, of ensuring that their agreements are in writing and carefully considered by all parties. It is recommended that advice is taken from lawyers who are experienced in the drafting of contracts of employment and labour law in general. Uncertainty and poorly drafted contracts may lead to claims against locums falling at the feet of practice owners by virtue of the doctrine of vicarious liability.

Conclusion

In conclusion, while seemingly simple and inconsequential, it is important to carefully consider the use of the term locum, as well as the use of the services of a locum at a practice. The terms “long term” or “permanent locum” are misnomers in South Africa. A locum’s services may not exceed a period of six months. A locum may either be an employee, or an independent contractor and it is important for the practice owner and the locum to carefully consider their needs and take legal advice before entering into any agreements and ensure that all parties are sufficiently protected.