We regularly advise dentists that a 3 month probation period is the standard. But recently, the Ontario Court of Appeal upheld terminating an employee during a 6 month probation period.
Filed under Blog, Staff · Tagged with 3 month probation, 6 month probation, dental practice, dental practice law lawyers, dental practice lawyers, DMC LLP, employment law, ESA, Jonathan Borrelli, notice, ontario dental law, ontario dental lawyer, probation period, probationary employee, suitability, termination, termination notice
You’ve probably read Michael Carabash’s blog about employee liability. If not, here it is. If you ARE looking to present new contracts to your existing staff, HOW MUCH notice are they entitled to? Well, the answer, as is usually the case with the law, is: IT DEPENDS. And the first “it depends” is this: do you already have a contract with your employees and what does that contract say about notice requirements?
If you already have a written contract with your employees, then the main thing to look for in the contract is the “termination” provisions. In other words, you need to find out what the contract says about how you can end the employee / employer relationship. If the contract says that the employee is entitled to termination notice or pay in lieu of notice in accordance with the Employment Standards Act, 2000 (often referred to as the “ESA“), then, in order to present a new contract, you must give the employee either notice or pay in lieu of notice in accordance with the ESA which is as follows:
|Employment Period||Notice / Pay In Lieu Owed|
|1 year or less||1 week|
|1 – 3 years||2 weeks|
|3 – 4 years||3 weeks|
|4 – 5 years||4 weeks|
|5 – 6 years||5 weeks|
|6 – 7 years||6 weeks|
|7 – 8 years||7 weeks|
|8 years or more||8 weeks|
If you do not already have a written contract with your employees, then the courts in Ontario have said that depending on certain criteria, each employer may owe much more than the minimum standards laid out in the ESA.
Some of the criteria include: the age of the employee, the position of the employee, the likelihood that they will find comparable work in a reasonable amount of time, the economic climate at the time, etc.
Despite all these criteria, there is a general trend that has appeared in the case law surrounding the issue of notice: Generally speaking, employers will owe their employees 1 month of notice up to a maximum of up to 26 months, depending on the circumstances.
Lets presume that you have decided to present your staff with new employee contracts. You have one employee who has worked with you for 20 years and has a contract that limits your liability to the ESA (lets call her Lisa) and one employee who has worked with you for the same amount of time but has no written contract (lets call her Mary).
In order to present Lisa with a new contract, you will have to give her 8 weeks of notice or pay in lieu of notice.
By contrast, Mary will require 20 months of notice if you want to present her with a written contract.
That’s a huge difference, right? That’s why we always recommend that dentist employers protect themselves by ensuring they have proper written contracts with each of their staff.
NOTE: Independent contractors are not employees and are not entitled to the same minimum/maximum standards as employees.
If you would like to read our tips and tricks when it comes to presenting staff with notice, click here to read more.
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, contact me (Ljubica Durlovska), David Mayzel or Michael Carabash. We are your legal dental team.
OK people: the weirdness about introducing new contracts to your team members must stop. Everyone (particularly your long-term team members, like receptionists and office managers) get all up in arms when the idea of a new contract is talked about. Employees think they are entitled to tenure. They don’t want to lose it. They don’t like the idea of changes. So naturally, they’re resistant to the notion of having new contracts. But what are they truly afraid of? Does their fear really exist? And what should you, the dentist employer be doing? What are your options? And how do you avoid getting into legal trouble? Want to learn more… just keep reading…
NOTICE: WORKING NOTICE OR PAYMENT IN LIEU OF NOTICE
Long-Term Team Members are entitled to NOTICE (let’s not call it “SEVERANCE” because that means something totally different and it doesn’t apply unless you have a huge payroll or are letting go of 50+ employees). So it’s just NOTICE. And NOTICE can come in the form of WORKING NOTICE (being time that the employee is provided while working and at the end of that time period, their employment will be coming to an end). If you’re giving an employee WORKING NOTICE, nothing changes. The terms of their employment remain the same during their employment. Indeed, if you do try to change things unilaterally during the notice period and that change constitutes a fundamental change in the nature of their employment, then they may have a claim that you constructively dismissed them. We won’t get into that here, but you can read more about constructive dismissal on this blog (just do a search) or in the eBook (which you can download by clicking on the top right corner of the website).
Now, if you can’t or don’t want to give WORKING NOTICE, there is something else that you can give your employee and then send them on their way. It’s PAYMENT IN LIEU OF NOTICE. That’s right: you’re cutting them a cheque equivalent to what they would have received in terms of working notice, minus the statutory deductions that you would normally make for them. So now that you know that employees are ONLY entitled to notice – either WORKING NOTICE or PAYMENT IN LIEU OF NOTICE – the next question becomes: how long is the notice period for a particular employee?
HOW LONG IS THE NOTICE PERIOD?
It really depends on a few things. First, the Employment Standards Act, 2000 says that an employee must receive at least 1 week of notice per year that they’ve been with you or a previous employer (if they carried on with you and no termination or new contracts were ever done up), up to 8 weeks maximum. So under that Act, your maximum exposure is 8 weeks of notice – even for long-term team members who’ve been there fore 20 or 30+ years! That’s somewhat good news. And just so you know, you cannot have a written contract with your team member which tries to avoid or reduce their entitlements under that Act. We’re talking minimum standards legislation people! You can’t avoid them! The only way to avoid them is by engaging your team member not as an employee, but as an independent contractor (but this is beyond the scope of this article) and there are many nuances you need to be aware of; in the worst case scenario, you may try to set them up as an independent contractor but, legally speaking, they may still be an employee and entitled to their minimum notice under the Act!
Now, the bad news is that the common law (i.e. judge made law) may ALSO apply. The general rule is that, unless there is a contract in place that clearly says that the common law does NOT apply, an employee will generally be entitled to one (1) month of notice for each year they’ve worked with you or a previous employer (if they carried on with you and no termination or new contracts were ever done up), up to a maximum of 24-26 months! Ouch! So if you want to avoid the common law from having any impact on the length of notice, make sure you have contracts in place that say so! Again, you can try to have the relationship as that of client-independent contractor instead of employer-employee to avoid the common law, but there are risks (again, to be addressed in another blog, or you can just read the eBook).
SO WHY DO WE CARE ABOUT NOTICE?
The bottom line is this: you CANNOT introduce new contracts to your team members (particularly new contracts that have different terms and conditions than they currently have) until and unless you provide them with notice. That notice will either be WORKING NOTICE, and at the end of the working notice, you can then provide them with the new contract to sign. Or the notice can be a payment in lieu of notice. The length of time should account for both the Employment Standards Act, 2000 and the common law (see above). If you present a new contract and ask them to sign WITHOUT giving proper notice, then they might have a claim that you constructively dismissed them. Do you really want to go to court or defend yourself before the labour relations board? I didn’t think so. So make sure you give every one the notice that they are entitled to.
WHAT HAPPENS NEXT?
After your team member receives written notice (and it should be documented and they should sign it and return a copy to you – FYI, you can contact Ljubica to prepare a proper notice letter if you need one), you can present them with a new contract and ask them to sign ONLY after the notice period expires or the payment is made. If they accept the new contract after the notice period expires, then they are essentially new employees and the Notice clock so-to-speak starts from “0”. If they choose not to accept the contract, you have a choice: keep them on under the same terms and conditions they had before (but they’ll still be considered a new employee with “0” on the Notice clock), negotiate the employment agreement with them (you should do this by using a dental lawyer) OR tell them not to show up for work when the notice period expires. If you do the latter, you won’t owe them anything because you’ve followed the Employment Standards Act, 2000 and possibly the common obligations that were imposed on you concerning the giving of notice before terminating an employee. In other words: if you and the employee cannot agree on a new agreement and you don’t want them back, they get NOTHING. That’s right: NOTHING. AGAIN, you’ve given them notice and followed your legal obligations. If they decide not to sign the agreement or a negotiated agreement, it’s completely up to you what you want to do.
Your ongoing liability concerning your employees is called NOTICE. You can forget about “SEVERANCE”. The amount of notice an employee is entitled to depends on how long they’ve worked with you and a previous employer (if they carried on with you and no termination or new contracts were ever done up). The amount of notice also depends on what their existing employment agreement says. If you want to present new contracts, give them notice first. At the end of the notice period, you can have them sign a new contract. If they don’t sign, it’s up to you what you want to do (i.e. keep them on without a contract, negotiate a written contract, or tell them not to come in any more). Regardless of what you choose to do: they would be considered a new employee with “0” as their Notice Clock. There may be other complications if you decide to let them go (e.g. they may claim discrimination under the Human Rights Code, etc.), so if you’re going to let them go, it might make sense to get a settlement / release from them (in exchange for giving them something like $$$) so that they can’t make a claim against you with the Human Rights Tribunal of Ontario. Or perhaps you want them to agree not to solicit patients on their way out (and therefore need a written agreement to that effect). More things to think about… just remember to contact your dental lawyer.
NOTE: we talked about introducing new contracts by giving employees notice. This is completely different from firing employees for cause (for which NO NOTICE is required). That will likely be discussed in a future blog…
David Mayzel is your legal risk manager. He is a trained courtroom lawyer and has spent many years resolving disputes both in and out of court. He knows how to prepare documents and execute transactions in a way that avoids or mitigates legal risks. He can be reached at 416.528.5280. or firstname.lastname@example.org.
Michael Carabash is your business law adviser. He is an entrepreneur at heart who helps you see the big legal picture. He drafts clear and effective agreements that protect your rights while promoting your interests. He can be reached at 647.680.9530. or email@example.com.
Ljubica Durlovska is your transition lawyer. She helps you with staff and associates, maintaining your corporation, and other business matters. She can be reached at 416.443.9280, extension 206 or firstname.lastname@example.org.
Jonathan Borrelli is your employment lawyer. He helps you with staff and associates matters, including hirings, terminations, switching staff to written contracts and resolving disputes. He can be reached at 416.443.9280, extension 204 or email@example.com.
Benjamin Kong is an experienced business law clerk. He assists David and Michael with corporate matters and purchase / sale transactions. He can be reached at 416.443.9280, extension 207 or firstname.lastname@example.org.
Julie Whitehouse is an experienced business law clerk. She assists David and Michael with corporate matters and purchase / sale transactions. She can be reached at 416.443.9280, extension 203 or email@example.com.
David, Michael, Ljubica, Jonathan, Ben and Julie are a truly dynamic team. Their diverse knowledge, skills, and experiences will help you get the best deal possible while promoting your interests and protecting your rights. You can read dentist testimonials here.