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Know what you’re signing: Employment contracts, procedural protection, and CMPA assistance

Close-up of a doctor signing paperwork

Published: March 2021
The information in this article was correct at the time of publishing
21-05-E

Canadian physicians practise within a variety of settings and service delivery models. While some physicians work at hospitals within a traditional privileges-based model, others work at hospitals, clinics, or other settings in an employment or contractual arrangement. 

It is important to understand that different practice arrangements offer different levels of procedural protection around critical issues such as discipline, the termination of the employment relationship, and expectations around service delivery. 

Generally speaking, a traditional privileges-based model at a hospital offers physicians the highest level of procedural protection. Contract-based models in hospitals and other settings do not necessarily offer the same level of protection unless the contract has been specifically drafted to do so.

Different practice arrangements, different levels of procedural protection

Hospital privileges-based model

Within a privileges-based model, a hospital grants rights to a physician to perform specific acts and recognizes the independent nature of the doctor. A privileges-based model at a hospital usually offers the highest level of procedural protection. Physicians working within a privileges-based model are protected by:

  • provincial and territorial laws and regulations that require hospitals to enact by-laws setting out robust procedures for renewing, restricting, and terminating a physician’s privileges
  • case law that clarifies the processes that should be in place when a hospital seeks to restrict, revoke, or fail to renew a physician’s privileges
  • appeal processes that let a physician request a review if they are denied privileges or lose their privileges

Employment contracts in hospitals and other settings

Outside of the traditional privileges-based model, physicians in hospitals and other healthcare settings may work under arrangements such as employment contracts or alternate service agreements. In some cases, physicians choose these contracts. In other cases, the contracts are proposed by the hospital or health authority and physicians do not have a choice.

Generally, employment contracts and service agreements do not offer the same procedural safeguards as the privileges-based model. Specifically, the procedural protections guaranteed by hospital by-laws and confirmed by the courts governing the termination or suspension of privileges within the privileges-based model often do not apply to contracts and agreements.

With a contractual or service agreement, the terms of the contract govern any disputes that might arise between a physician and the healthcare organization. This means that — unless procedural safeguards have been written into the contract — a physician facing termination will have significantly fewer protections under a contract or service agreement. For example, most contracts will allow the hospital to terminate a contract at any time and without cause so long as it provides sufficient notice.

For this reason, physicians entering into employment contracts and service agreements should be very clear on the terms of the contract that relate to their job description, call schedule, permitted outside activities, discipline, and contract termination. The contract should address the circumstances under which a physician can end the employment or contractual relationship, the contract renewal or renegotiation process, and the consequences of terminating the relationship (e.g. access to hospital records following termination). Terms relating to the job description should describe the specific type of care to be provided (e.g. internal medicine v gastroenterology) and specific patient care hours. Clauses on activities such as moonlighting, volunteer clinical work, and research should also be included.

CMPA assistance with individual contracts

The following principles apply to CMPA’s assistance with contracts in hospitals and other settings:

  • Assistance with contractual disputes: The CMPA will generally not assist physicians in contractual disputes unless their professional medical work is called into question, and/or their ability to practise medicine is in jeopardy. In these disputes, the CMPA's assistance will be limited to aspects of the dispute that concern medical care.
  • Assistance with contract negotiations: The CMPA generally does not provide advice to members who are considering signing contracts. Physicians are encouraged to contact their own personal lawyer and, if relevant, their local medical organization or provincial/territorial medical association/federation for assistance with contracts. The CMPA’s document, Medical-legal issues to consider with individual contracts,1 provides information that might be of assistance to members and their lawyers when reviewing individual contracts.

Be sure before you sign

Once you sign a contract, it becomes difficult to break the terms you have agreed to. It can also be difficult to add new terms once the contract is in effect.

For this reason, it is essential that you understand the terms you are agreeing to before you sign a contract. You should never agree to a term you do not understand.

The CMPA strongly recommends consulting with your personal lawyer before you sign any contract.

The bottom line

If you are considering signing an employment contract, it’s important to look carefully at the details of the contract and to be aware of the implications of various terms. Members are strongly encouraged to consult with a personal lawyer.

More information is available from the following CMPA resources:


Reference

  1. Canadian Medical Protective Association. CMPA. Medical-legal issues to consider with individual contracts [cited 2021 Feb 10]

DISCLAIMER: The information contained in this learning material is for general educational purposes only and is not intended to provide specific professional medical or legal advice, nor to constitute a "standard of care" for Canadian healthcare professionals. The use of CMPA learning resources is subject to the foregoing as well as the CMPA's Terms of Use.