Julianne Yeager, Lawyer (biography and disclosures)
Disclosures: Associate lawyer at an employment law firm. Mitigating potential bias: Recommendations are consistent with legal advice.
Disclaimer: This article is not intended to be used as legal advice or to form any lawyer-client relationship. Do not use or rely upon the contents of this article without first obtaining independent legal advice.
What frequently asked questions I have noticed
Take a moment to think of all the liabilities that are involved in operating a medical office. Did employees pop into your mind?
Employees can be the biggest liability of a medical office. In my practice as an employment lawyer, I have noticed that I receive a relatively high volume of inquiries from Medical Office Assistants. They always have the same question: “Have I been wrongfully dismissed?” My answer is always: “Let’s see your employment contract.”
Consider the following illustration of a fictitious Medical Office Assistant who finds herself in my office. She was employed by a doctor in his clinic for 15 years. The employment contract consisted of an offer letter setting out her position, rate of pay, and hours of work. The clinic was recently sold, and the new owner had a personality conflict with my fictitious MOA. He googled the Employment Standards Act, worked out the required notice payment, and dismissed her effective immediately with a cheque for eight weeks of statutory notice pay. Then he carried on in his practice, a well-respected doctor in the small community where they lived, completely unaware that he had just incurred a significant amount of liability to this MOA. While this situation is imaginary, employment lawyers encounter similar facts every day.
Data that answers these questions
In my experience, physicians mean well but are not aware that the law surrounding termination of employment goes much farther than what is stated in the Employment Standards Act (“ESA”). To know how an employment can be lawfully ended, you need to look at how it began: what does the employment contract say?
If the employment contract gives some formula of termination notice or says that an employee can be terminated on ESA notice, then the correct thing to do may be to simply calculate notice based on the contractual formula or else refer to the ESA and figure out how many weeks of notice are owed. An employment contract can use any formula that does not provide less than the ESA minimum. Under the ESA, employees are essentially entitled to one week of notice per year of service, up to a maximum of eight weeks.
In most cases the employment contract is similar to the one that my imaginary MOA presented in the illustration above. It either does not say anything about termination notice, or else there is something wrong with the clause itself so that the notice provision is ineffective. In both scenarios, your entitlement to dismiss on contractual or ESA notice is quietly supplanted by something much more employee-friendly: reasonable notice.
Reasonable notice is determined by Courts with reference to the age, position, and length of service of the employee, together with their prospects of finding similar alternative employment. The maximum amount of reasonable notice B.C. Courts will typically allow is 24 months.
Reasonable notice is not as easy to determine as ESA obligations, and doing so requires a certain amount of familiarity with case law. It seems to me that doctors who own clinics and employ staff tend to be very busy practicing medicine and operating their business. Unsurprisingly, they are typically not researching contractual interpretation principles or reasonable notice case law. They may not even have a copy of the employment contract. As with my fictitious MOA client above, the doctor acts in good faith and thinks the employment has been lawfully terminated – but this can be an expensive and time-consuming error.
What I recommend (practice tip)
My practice tip is this: if you employ people, you should have professionally drafted and implemented employment contracts put in place. The time and cost of having contracts drafted and implemented are minor, in comparison to the time and cost of dealing with a wrongfully dismissed employee and their lawyer. The peace of mind alone is likely worth the expense – as is, I suspect, the prospect of being able to tell a belligerent lawyer where to put their worthless case.
My fictitious MOA was probably entitled to 12 to 15 months of reasonable notice, that is, all elements of her pay for 12 to 15 months. She had been paid $24 per hour for a 7 or 8 hour day, the clinic had covered her MSP payments, and she had worked full time. In addition to the cheque for eight weeks of pay, she was therefore also owed a further 44 to 56 weeks of pay plus the value of her benefits. That’s around $43,000 to $55,000 the doctor would have saved, not to mention legal costs and management time attending to settlement negotiations (or worse, court proceedings) if only the employment contract had covered notice of termination.
The best time to implement an employment contract is at the beginning of the employment. However it is also possible to effectively introduce a new employment contract that protects your practice right away, to an existing employment relationship. You can start protecting your practice immediately by taking advantage of your legal right to control your workplace, through the use of professionally drafted and implemented employment contracts.
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Very nice article that should be made a mandatory reading for any doctor going into practice, solo, group or partnerships. Too often, the young doctors are more concerned about their medical practice (getting patients, referals, setting up appointment systems, balancing office and hospital work) or joining an established group. I think all provincial medical association should provide these information (or better hold periodic seminars or info sessions for doctors entering practice).
Yes, I agree with the above thoughts. I assumed a practice in BC 3 years ago and had no idea about these employment issues. Thanks for the information.
this is an excellent article with exceptionally important info. i have been in practise for 30 yrs and we had some problems before adopting more careful policies. Thank you
There is no substitute for getting these agreements in place at the beginning. !
I agree with the previous comments! Thank you for placing this practice management wisdom within the framework of CME. I feel it is often the questions that we don’t think of asking that get us into the most trouble.