It is not uncommon for dentists and other medical professionals to purchase a practice and inherit the staff. It is also not uncommon for staff in these industries to lack written employment contracts; rather it is the status quo. Unfortunately, many dentists and medical professionals have not been made aware of the possible consequences of maintaining oral (no pun intended) contracts with their employees.
Written Employment Contracts
There are many benefits associated with transitioning from oral to written employment contracts. Written employment contracts allow for greater clarity in the employer-employee relationship, and establish clear expectations, affording protection to both parties moving forward. Written contracts are also beneficial upon a sale of the practice, as the new business owner and practitioner will adopt the staff with a clear understanding of the obligations flowing between the employer and employees.
In the absence of written employment contracts, the business owner may be exposed to unexpected risks and associated expenses moving forward. For example, in the context of terminating an employee’s employment, if there is no written employment contract in effect, the business owner will not only be required to fulfill the minimum standards set out in the B.C. Employment Standards Act (the “ESA”) but will also likely be subject to the far more onerous (and less certain) common law notice/severance obligations. Further, if you are purchasing an existing practice, you may inadvertently inherit these obligations and liabilities. By limiting employees’ termination to the minimum required by the ESA or some other specified amount, business owners protect themselves from having to pay exorbitant compensation for long-term employees who have their employment terminated.
Additionally, written employment contracts remove the risk, expense and time associated with possible arguments and/or litigation over the employee’s rights and obligations in the workplace, obligate the employee to abide by current and prospective workplace policies, provide the employer the ability to limit the use and disclosure of confidential and/or proprietary information, and provide many other benefits that add value to the employer’s business.
Prior to transitioning from oral to written contracts, it is imperative that dentists and medical professionals alike seek legal advice as this transition must be done correctly to avoid unintended legal consequences, such as constructive dismissal. At Baker Newby we have lawyers experienced in all aspects of employment law and would be happy to advise you on the most effective and efficient option for your practice.
