Adam Farber, LL.B.OMA Legal Counsel

October 14, 2012

1. What is a Contract?2. Types of Contracts3. Negotiations4. Contract Clauses

1. Scope of Work (job duties, hours)2. Payment (salary, benefits,etc.)3. Term of Contract/Termination of Contract - Notice Period,4. Confidentiality & Patients Records – Maintenance, Retention, Ownership and Physician Access and Who is Responsible5.Sickness, Disability

A contract is "an agreement between two or more parties creating obligations that are enforceable at law”

To be “enforceable at law”,

•Each party must intend to enter into the agreement,•The terms of the agreement must be “certain”.

There are two types of contracts for the provision of services,

1. contract of employment, and2. independent contractor contract.

Contract of Employment

Independent Contractor

Terms some terms are implied by law,terms evolve with time and the conduct of the parties

terms will not generally be implied by the courts,all terms must be agreed to in the contract.

Interpretation of Contract

extrinsic evidence allowed

no extrinsic evidence allowed

Statutory Regulation

relationship extensively regulated by Employment Standards Act,parties cannot contract out of the Act

little statutory regulationparties are largely able to agree to whatever terms they want

•The determination if someone is employed or self-employed is a question of fact which requires consideration of a number of factors including:

• level of independence in carrying out responsibilities• requirements to report• determining when work will be performed• ability to set own schedule and vacations• determining where services will be performed

more information on the factors used by Canada Revenue Agency evaluates this relationship can be found at: http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-11e.pdf

•Negotiating employments will vary greatly depending on the specific circumstances of the proposed employment relationship.

•Factors that influence the negotiation process include:

• Size of employer (eg. large institution, clinic)• Nature of employer (public vs. private)• How many employees• How many positions are the same or similar• Union or non-union• How positions are funded (permanent or term limited funding) • New employment or renegotiation of an existing employment

relationship

Considerations for determining how negotiations will be conducted:•leverage and understanding the current landscape •will the negotiations be for an individual or is there a collective bargaining opportunity•are there benefits that can be negotiated that are not directly related to monetary compensation•expectations of what can reasonably be achieved at the present time

1. Scope of Work

2. Payment and benefits

3. Term of Contract/Termination of Contract - Notice Period

4. Confidentiality - Disclosure of Personal Health Information

5. Sickness, Disability

The Employer usually wants this clause to be as flexible as possible:

“Physician Assistant will provide consistent with his/her scope of practice”. “Physician Assistant will perform whatever work of similar nature assigned by employer”.

The employee will want this clause to be as tightly prescribed as possible so he/she knows what he is to do:

“Physician Assistant will provide the healthcare services listed in Schedule A during regular business hours.”

“Physician Assistant will not provide any healthcare services which in his/her opinion are beyond his/her professional competency”.

Who gets to amend the description of the services provided?

Unless there is a agreement to the contrary, the employer has the unilateral right to direct the employee to perform different services. The only limitation upon this is the law of “constructive dismissal”.

Where the employer unilaterally makes a fundamental or substantial change to the employee’s contract of employment – a change that violates the contract’s terms – the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed.Farber v. Royal Trust (1996) 27 CCEL (2d) 163 (SCC)

Even if an employer constructively dismisses an employee, some case law holds that the employee must accept the new position offered by the employer to mitigate their damages.

“Where the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships are not acrimonious it is reasonable to expect the employee to accept the position offered in mitigation of damages during a reasonable notice period or until he finds acceptable employment elsewhere”. Mifsud v. MacMillan Bathurst Inc. (1989) 70 OR (2d) 701 (CA)

• Payment terms in an employment agreement should be as clear as possible to avoid any term being misunderstood.

• Typically, employment agreements will simply spell out the salary that will be paid determined by the total annual amount, or broken to an amount earned per month, or week.

• Some agreements could contain provisions explaining how different amounts could be paid based on incentives offered by the employer or third party fundors (eg. Government)

• Benefits should be clearly set out in the agreement (eg. Extended health, LTD, pension, CPD, vacation beyond rights under the Employment Standards Act)

•Employment contracts are either for a fixed term or of indefinite duration.

•Contracts can be terminated either for cause or without cause.

Termination Without Cause - Fixed Term Contract

Unless there is a written agreement to the contrary, a fixed term contract cannot be terminated by the employer prior to its termination date except for cause.

Termination Without Cause - Indefinite Duration Contract

Unless there is a written agreement to the contrary, the common law implies that the employer must give the employee “reasonable notice” of dismissal except for dismissal for cause. Reasonable Notice is a period of time set by the courts on a variety of factors, the most important of which are,

1. Level of responsibility,2. Length of service,3. Age.

Termination Without Cause

It is to the benefit of the employee to negotiate a termination clause in their agreement which will provide the employee,

• with at least as much notice as he/she would receive at common law, and

• requires the employer to pay a severance package rather than giving “working notice”.

Termination For Cause

Except in extreme cases, courts require employer to warn employees of substandard performance and to give them a reasonable period of time to improve their performance to avoid dismissal.

Physicians and health care institutions are required by law in each province/territory to maintain a treatment record for each patient. Records are also invaluable to the physician who is the subject of a complaint or civil action by a patient. How long, then, should medical records be kept to ensure their availability in the event of litigation or a complaint by the patient? The most prudent approach is to retain the medical records until the anticipated expiry of the limitation period to commence an action.

CMPA Physician Handbook 2005

Contract Provision

The records are owned by the Employer (eg. Hospital or Physician). Hence, the Physician Assistant should have a clause in his or her contract that states that,

- the employer shall retain all health records concerning each patient the physician assistant has dealt with for at least 10-15 years.

- the employer shall provide copies of any health records concerning patients the physician assistant has dealt with to physician when required. [These clauses survive termination of the agreement].

It is in the employee’s interest to have the employer,

1) Pay full compensation during waiting period for LTD benefits, and

2) Provide LTD insurance.

Conversely, it is in the employer’s interest to limit any such rights. Employers sometimes seek to include clauses like the following,

“the employee agrees that after a continuous disability of 6 months, this agreement will terminate”.

Human Rights Code (Ontario)

3.  Every person having legal capacity has a right to contract on equal terms without discrimination because … disability.5(1)  Every person has a right to equal treatment with respect to employment without discrimination because of … disability.

17.(1)  A right of a person under this Act is not infringed for the reason only that the person is incapable of performing or fulfilling the essential duties or requirements attending the exercise of the right because of disability. (2)  No tribunal or court shall find a person incapable unless it is satisfied that the needs of the person cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

A clause of an agreement that provides for termination of the employment relationship should an employee be absent longer than a specified period of time is clearly aimed at ill or disabled employees.  Although the period negotiated by the parties [3 years] is a factor to consider when assessing the duty to accommodate, it does not definitively determine the specific accommodation measure to which an employee is entitled, since each case must be evaluated on the basis of its particular circumstances.  The right to equality is a fundamental right, and the parties to a collective agreement cannot agree to a level of protection that is lower than the one to which employees are entitled under human rights legislation.  In light of the individualized nature of the accommodation process, the parties cannot definitively establish the length of the period in advance. 

McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés de l’Hôpital général de Montréal, [2007] 1 S.C.R. 161, 2007 SCC 4