Independent Contractors

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Independent Contractors

There has been a recent development in the Thomas & Naaz Case which has implications for Surgery Owners.

A lot of it has to do with Payroll tax and most Drs, most likely owners are keen to point out that if one is deemed to be a Employee for Payroll purposes, it doesn't necessarily follow that they are also de facto Employees in a contractual sense and thus entitled to benefits that accrue to Employees like Superannuation, Paid Parental, annual and sick leave etc. I agree that this interpretation of the ruling is indeed correct

It is also being said that this will reduce what is available to take home for both owners and Drs working there and is bad for General Practiotioners, whether they be owners or not. If the Govt. taxes a base amount or taxes it at a higher level than before, then it is self evident that what remains will be less than before.
Therefore, contractor Drs cannot expect to walk away with even more than they did before this ruling.

The lady doth protest too much, methinks
- William Shakespeare, Hamlet

I can only chuckle at the clumsy attempt by owners to make this an issue solely about money. This issue goes to the heart of what being a GP in Australia means.
That IMGs are treated shabbily is no secret. Bonded Drs exist. The DPA is a thing
On top of this practices routinely add restrictive clauses to their contracts.
I quote an article published in NewsGP recently summarising the opinions of several lawyers in this field

The Thomas and Naaz case referenced areas of the service agreement which were relatively onerous on the doctors. As such, the trend has been to ‘weaken’ the terms of service agreements to help them comply with the requirements of the payroll tax exemptions.

Previously, many service agreements included restrictions on doctors working in certain areas, dictated that ownership of records stay with the practice and stated hours that the contractor must work in the practice. The updated service agreements do, in some cases, provide a favourable outcome to the individual doctor in practice.

Also, some service agreements have been written by the practice owner, practice manager or a solicitor who was not aware of the intricacies of the medical practice arrangements. When they are rewritten, you can expect to see more complex agreements.

So, as an Independent Contractor you should expect to be able to do the following:

• Set your own fee
• Own the medical records of your patients
• Choose your hours
• Any Goodwill would belong to you
• Get paid the fees paid by patients in to your own Bank Accounts and then pay the surgery the management fee
• Not only be able to, but be required to advertise your services to the general public independent of the surgery, usually by way of a website

Lastly, I come to the issue of funding for General Practice. It has long been said that Medicare rebates are hopelessly inadequate and that we should charge what we feel we are worth, i.e move away from Bulk Billing and towards a Mixed/Private Billing Model. The recent sharp increase in the Cost of Living, the rise in Mortgage rates has indeed spurred many Drs and Practices alike to ditch bulk billing and move to private fees.

So, why suddenly is the Payroll Tax the death knell for General Practice?
We are being weaned away from the teat of Govt Funding. It is us who have been dragging our feet all along. Here too I think the owners of surgeries have more responsibility to shoulder as many owners and large groups continue to Bulk Bill and their response to falling margins has been to go large and use the "pack 'em and stack 'em" kinda model of General Practice. And Drs are encouraged to Pack and Stack medicare items during consults.

Just as Al Capone was done for taxes, not any of his other activities, the way General Practice is run and how recruitment and retrenchment in General Practice will be shaped in Australia might be determined by the ATO it seems!

Want to take back control? This is the opportunity. You start with your website.
I'll tackle this in my next episode.

Till then...

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