Setting the Foundation: Why Doctors, IMGs & Registrars Need Tailored Employment Agreements
Australia’s medical and health workforce is undergoing significant changes due to a combination of demographic, policy, and systemic factors. As the workforce landscape in the industry continues to shift, we have noted that more medical practices are engaging doctors (especially International Medical Graduates (IMGs) and Registrar Doctors) as employees. This change has been driven by recent legal developments, increasing compliance risks around contractor arrangements, practice managers and practice owners focussed on minimising legal risk areas and the evolving needs of both medical practices and doctors themselves. Misclassification has serious implications, particularly in relation to a practice’s liability to pay worker entitlements and/or payroll tax. For an IMG, misclassification can have significant legal, financial, and operational implications for the medical practice engaging them.
We often talk about the difference between independent contractors and employees, however less so about which arrangement is the better choice. The reason for this, is that the better choice really depends on the practice, and what the arrangement is at law. As a practice you can make certain choices about the engagement and the law decides on how the practitioner is classified. In this article, we break down the benefits of employment arrangements (for both the individual and the practice), special considerations regarding IMGs and Registrars, and the importance of opting for agreements that are tailored to your medical practice rather than an off the shelf template agreement.
Understanding Employment Agreements
An Employment Agreement is used to contract Practitioners in a Medical Practice, where the worker is an employee. We have covered the distinction between employees vs independent contractors or independent practitioners in several of our previous articles (read more here). Employee doctors work in and are part of the practice, they are subject to stricter controls, and are entitled to benefits like paid leave, superannuation, and certain protections under employment laws.
An Employment Agreement sets out the terms and conditions of the doctor’s employment as regulated by the Fair Work Act 2009 (Cth) and the National Employment Standards, as well as other relevant legislation, where applicable.
Key components of the agreement include but are not limited to:
Roles and responsibilities
Work hours
Remuneration
Benefits and leave policies
Termination and non-compete or non-solicit clauses
Governing law (including any Award if applicable)
A Note on International Medical Graduates (IMG) and Registrars
We typically see IMGs and registrars – across all specialty disciplines - engaged as employees due to the level of supervision required by the Medical Board of Australia and the colleges. Their hours, patient load, and clinical duties are usually controlled by the practice, aligning with the definition of employment under the Fair Work Act.
For example, the AGPT program by RACGP requires registrars to be employed, and the General Practice Registrars Australia (GPRA) association “strongly recommends that all registrars are engaged and treated as employees”. For IMGs, entering general or specialist practice, visa conditions often lean towards the correct legal classification for IMGs being employees rather than being engaged as independent practitioners.
When engaging IMGs and registrars, we often recommend implementing a separate Supervision Agreement, alongside their Employment Agreement, which we discuss in this article.
Benefits of Employment Agreements
Recent case law and State Revenue Office public rulings have highlighted the legal risks for medical practices that misclassify employees as contractors.
We have seen many medical practices tightening up their engagement models and many find that employment relationships can provide more structure, certainty, and compliance, both for the practice and the practitioner. Engaging practitioners as employees can bring you as a practice owner or practice manager significant legal, operational, and cultural benefits, including:
Clearer control and expectations
Employment Agreements give practices the legal right to set working hours, availability requirements, and performance expectations. This allows for more consistent service delivery and ensures alignment with the practice’s operational needs.Enhanced integration into the practice team
Employees can be more readily embedded into the practice’s clinical governance framework, team culture, and shared values. This fosters a sense of belonging, improves certainty of continuity of care for patients, and promotes collaboration among professionals who are all rowing in the same direction.Reduced risk of liability
By engaging doctors as employees, practices significantly reduce their exposure to claims for back-paid superannuation, leave entitlements, or payroll tax reassessments. Recent legal developments show that the cost of getting it wrong can be high, in terms of uncertainty, cost and reputation.Statutory protections for doctors
Employees benefit from a range of rights under the Fair Work Act, including annual leave, paid personal leave, superannuation contributions, and protection from unfair dismissal or adverse action. This can help attract and retain quality practitioners who value workplace stability and fair treatment.Potentially, a smarter business decision
Beyond compliance, employment arrangements can improve team cohesion, streamline HR management, and simplify legal obligations. In the long term, this structure supports sustainable growth, reduces legal ambiguity, and contributes to a healthier workplace culture.
If it is right for your medical practice, in today’s legal and economic environment, employment is not just a safer legal option, it is often a strategic business move that fosters certainty, consistency, and professional integrity.
Don’t rely on off-the-shelf templated agreements
A worrying trend is the increasing use of agreements purchased or downloaded from professional associations, business coaches, accountants, and other non-lawyers. We understand that medical practices are looking to minimise costs wherever possible, however opting for off the shelf templated agreements (which do not consider your practice’s unique risks), is never the solution.
Generic templates are not designed to reflect the complexities of your specific practice, such as your staffing structure, service model, financial arrangements, or compliance obligations. Critical provisions like dispute resolution, termination clauses, top up billing clauses, supervision obligations, and patient handover processes often require careful, customised drafting. Without this, medical practices risk finding themselves tied to unclear or unenforceable terms when issues arise. An issue we are seeing at You Legal more and more.
A well-drafted agreement is more than a formality; it’s a foundation for protecting your practice. Investing in tailored legal documents ensures clarity, reduces the risk of costly disputes or regulatory breaches, and provides peace of mind – a good night’s sleep is a wonderful benefit.
You can read more about the risks of using templated legal agreements in our blog here.
Ready to get started personalising your agreements?
Hiring doctors comes with a host of responsibilities, but it also brings enormous opportunity for growth, enhanced patient care, and practice stability.
At You Legal, we offer Fast Track Solutions for the preparation of an Employment Agreement for General Practitioners (also suitable for IMG doctors) and an Employment Agreement for Registrar Doctors. If you are employing specialist doctors, reach out as we can also assist.
Our team has extensive experience in providing advice and insights into best practices for preparing your agreements for medical practices to engage with doctors. To discuss your legal requirements, contact our team here.