Contractors are jeopardising their businesses by failing to draw up written agreements with their locums, C+D has learned.

Many independents were employing locums on a verbal understanding alone, legal experts told C+D, and unwittingly exposing their finances and confidential business information to risk.

Where contracts were used, many left out vital clauses on confidentiality and the locum's responsibilities, they added (see 3 vital contract clauses, below).

Failing to draw up a contract could cast doubt over whether a locum was self-employed, said David Reissner, head of healthcare at law firm Charles Russell	More on locums Locum suspended for plagiarising colleague's coursework More pay rises for employees but locum rates remain depressed Locums feel sharp end of management demands
	David Reissner, head of healthcare at law firm Charles Russell, said failing to draw up a contract could cast doubt over whether a locum was self-employed, "especially if the locum works for the same owner over an extended period". These doubts could make the employer liable for penalty charges plus interest and unpaid tax, he warned.

Mr Reissner added that, where written agreements did exist, they typically avoided spelling out key responsibilities and confidentiality issues. "Pharmacy owners often do not take sufficient steps to protect themselves and can find they are at a disadvantage if [their] business information is used by a locum who, for example, decides to set up a competing business," he said.

Sarah Booth, solicitor at Shoosmiths LLP, agreed that contractors should be aware of the dangers of hiring locums without making the terms clear. "Because of the casual nature of the arrangements, it can be all too easy for employers to fail to document [them]," she told C+D.

Numark said it had heard of locums using a contractor's business information to set up a competing pharmacy or demanding the right to cancel all future bookings at short notice.

"We always advise independent contractors to have a legally binding contract with any locum they take on," said Numark's director of pharmacy services Mimi Lau. "This is to protect them and the locum in case there are any disputes in the future over what has been agreed verbally."

3 vital contract clauses

1. Responsibilities

"Standard locum contracts often do not clarify the responsibilities of the locum," says Charles Russell's David Reissner. "The last thing an employer wants to discover is that the locum has not fulfilled the intended role because responsibilities and obligations were not spelled out."

2. Confidentiality

"The employer must ensure they take steps to protect the business' confidential information by ensuring that all staff, including locums, sign up to confidentiality restrictions," advises Shoosmiths' Sarah Booth. "Employers sourcing locums through an agency may also wish to consider negotiating indemnities covering losses sustained as a result of a breach of the employer's confidential information by the locum."

3. Self-employed status

All contracts should make clear that the locum is self-employed, Mr Reissner stresses, to avoid them effectively becoming an employee by working at the pharmacy on a regular basis. "If the locum really is an employee, then they will have rights the pharmacy owner may not have intended," he warns.

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