Legal status prevented doctors from receiving damages after roles at hospital eliminated
Two Ontario doctors who were put out of work by the closure of department at the hospital where they were on staff were not legally employees and not entitled to wrongful dismissal damages under the province’s Public Hospitals Act, the Ontario Superior Court of Justice has ruled.
Dr. Douglas Beattie, 65, was a doctor at the Women’s College Hospital in Toronto. He started working at the hospital in its emergency centre initially around 1991 and then moved to its urgent care centre. In 2000, he became director of the urgent care centre.
Dr. George Luczkiw, 64, was also a doctor at the Women’s College Hospital who started in the emergency centre around 1982 and then joined the urgent care centre.
In 2012, the hospital decided to close the urgent care centre. As per protocol under legislation, it submitted a service change form to the Toronto Central Local Health Integration Network indicating it would not longer operate the urgent care centre, which was a “service” defined under Ontario’s Local Health System Integration Act, 2006. The network accepted the service change proposal and the hospital set Sept. 10 as the closure date for the urgent care centre.
As a result of this closure, both Dr. Beattie and Dr. Luczkiw were no longer working at the hospital effective Sept. 10, 2012. The hospital used the authority granted under s. 44 of the Ontario Public Hospitals Act — allowing a hospital board to revoke the appointment of any physician if the only hospital privileges that appointment has is related to the provision of a service the board has decided to end — to end the doctors’ tenure. That section also states that “no action or other proceeding for damages or otherwise shall be instituted against a corporation which owns or operates a hospital for any act done in good faith in the execution or intended execution by a board of its authority under (the section) or for any alleged neglect or default in the execution in good faith by a board of such authority.”
Both doctors commenced an action for wrongful dismissal. They claimed there was no evidence the hospital’s board made any decision to stop providing a service and it “simply closed the (urgent care centre) and left the (doctors) to suffer the consequences.” They also argued that they should be considered employees because the hospital controlled their work, owned the tools of their work, and assumed the risk and profit opportunity from their job performance.
In addition, the doctors sought punitive damages for civil fraud stemming from the fact the hospital represented to the public that it would provide a portion of the $125 payment charged to out-of-country patients for physician’s services on its “Responsibility for Payment Form Urgent Care Centre Visit Only” when in fact it kept its earnings from such services — a representation based on a 2006 agreement with the doctors that the hospital would pay the doctors’ service portion of the out-of-country payment.
The court found that the doctors were not employees, as they identified themselves as “member of the medical staff” and not “employee” in hospital documentation, they were credentialed physicians under the hospital bylaws and the Public Hospitals Act, they were members of the Canadian Medical Association, and they identified themselves as self-employed on their income tax returns.
However, the court noted that the doctors met the criteria to be considered in the special category of "dependent contractors" due to the fact they depended on the hospital for most of their income and hours of work, but they were excluded from receiving damages in lieu of reasonable notice under the Public Hospitals Act. If this exclusion didn’t exist, the court said, Dr. Beattie would have been entitled to 23 months’ notice and Dr. Luczkiw 26 months’ notice for dismissal.
As for the civil fraud claim by the doctors, the court found that any such agreement by the hospital to pay the urgent care centre doctors a portion of the fee charged to out-of-country patients was never followed and the doctors took no steps to enforce it until the wrongful dismissal suit. The court labelled “the issue of out-of-country billing to be a misunderstanding between the parties” that wasn’t enough to be considered fraudulent behaviour by the hospital.
“By not taking any steps to enforce the agreement or to carry out their ‘side of the bargain’ by following the process described by (a hospital administrative employee at the time), the doctors have waived any rights they may have had under the agreement,” said the court.
The court dismissed the doctors claims for wrongful dismissal and punitive damages.
For more information see:
• Beattie v. Women’s College Hospital, 2018 CarswellOnt 3613 (Ont. S.C.J.).
