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Court awards damages to physician dismissed from hospital

The Ontario Court of Appeal has ruled that a physician who was terminated without cause is entitled to damages despite any difficulties he may have had in the workplace, Toronto health lawyer Lonny Rosen tells

“Dismissal of an employee without cause will generally result in a requirement to provide pay notice or payment in lieu of notice unless the contract is frustrated,” says Rosen, a partner with Rosen Sunshine LLP.

Rosen was commenting on the appeal court’s decision to quash a finding by an Ontario Superior Court judge that a doctor at Toronto’s Hospital for Sick Children was not wrongfully dismissed and, consequently, could not claim damages.

The U.S.-certified anesthesiologist was working towards his Ontario medical licence when he was dismissed.

Rosen, who was not involved in the case and comments generally, notes that in Ontario, U.S.-board-certified physicians can work under a restricted certificate of registration. They have to complete a one-year period of supervision and then pass a practice-ready assessment administered by the College of Physicians and Surgeons of Ontario.

The hospital hired the doctor on a one-year contract to work under a supervisor in the department of anesthesia and pain medicine. He was initially allowed to focus on his chosen area, pediatric cardiac anesthesiology, according to background provided in the decision.

“His initial reviews were positive,” Rosen tells “His clinical skills were sound, although there were some concerns raised with respect to his interaction with the operating room team.”  

However, personality conflicts arose between the doctor and members of the department’s cardiac group, the court said. He felt he was being micromanaged, the decision notes.

“According to the decision, the other team members felt he was not amenable to instruction,” Rosen says.

As a result, his department chief told him he should work in a different area within the department, which he was reluctant to do.

Following a meeting with senior staff, during which the anesthesiologist allegedly suggested that his supervisor was jealous of and disloyal to his department chief, the supervisor indicated he could no longer oversee his work, the court says.

Meanwhile, the department chief learned that the doctor had made three medical errors which had not been brought to the doctor’s attention, and he so alerted the supervisor.

Shortly thereafter, the supervisor advised the College that there were clinical performance and personal interaction issues, and he could no longer oversee the doctor’s work.

This is significant because one of the restrictions on the doctor’s certificate was that it would expire if the supervisor was no longer willing or able to oversee his work or was concerned about patient safety, Rosen says. Consequently, the College told the anesthesiologist his certificate would expire and he could no longer practise at the hospital.

The department chief recommended that he be immediately terminated based on his errors, his conduct at meetings, and the resignation of his supervisor, the court says.

This is important because any physician who applies for privileges at a hospital, or applies for licensure in another jurisdiction, is asked if they have ever had their licence restricted or their privileges suspended or revoked, Rosen says. “So being terminated could leave a black mark on a physician’s record.”

The anesthesiologist found other work in the United States.

But he sued the hospital, the department chief and his supervisor, alleging wrongful dismissal and defamation, and claiming he had suffered damage to his reputation and career prospects, the court said.

The hospital initially said there was cause for dismissal but abandoned that position at trial. The hospital claimed, however, that the doctor was only entitled to three to six months of damages and could have mitigated those damages by accepting other assignments within the department, Rosen says.

Notably, the hospital did not plead that the contract was frustrated by the doctor's loss of his certificate of registration, an avenue it could have pursued, Rosen says.

The trial judge dismissed the doctor’s lawsuit and ordered him to pay $137,000 in costs.

She found that his contract did not guarantee he would work on cardiac cases and that he could have worked in other areas of the department.

She also found that his conduct destroyed any prospect of building productive relationships and that the hospital was not required to find him a new supervisor.

The doctor appealed.

The Ontario Court of Appeal ruled that the trial judge erred in finding that the doctor was not wrongfully dismissed because the hospital itself had abandoned that claim.

The appeal court also found that his refusal to work in other areas of the department prior to termination was not evidence of failure to mitigate his damages — this obligation arose upon termination, Rosen says.

Furthermore, because the trial judge did not explain her findings, the court rejected her ruling that the respondents did not act in bad faith.

The court held that the issues before the trial judge should have been:

  • the damages that flowed from the dismissal
  • whether the doctor had an obligation to mitigate his damages by finding comparable employment following termination
  • whether the hospital and administrative staff acted in bad faith in his dismissal 
  • whether the doctor suffered damages as a result of any bad-faith conduct

The appeal court returned the case to the trial judge to determine: the quantity of the wrongful dismissal damages, whether the respondents engaged in bad faith or conduct in the dismissal, defamation, if any, and, finally, if the doctor does establish bad faith conduct and/or defamation, the quantification of any resulting damages.

“The takeaway for hospitals and supervising physicians is that, where a physician is working under supervision, the resignation of that physician’s supervisor may result in the frustration of the physician's contract of employment. However, the decision to dismiss the physician from his position of employment without cause may give rise to a claim for damages for wrongful dismissal,” Rosen says.

“It is important to note that most physicians are not employed by the hospitals at which they work and will not have recourse to the courts if their appointment is suspended or not renewed," says Rosen. "Instead, most physicians would be required to proceed under the Public Hospitals Act to address any interference with or suspension or non-renewal of their hospital privileges. The physician in this case had an employment contract in addition to hospital privileges, and it was under the former that he sued for wrongful dismissal.”

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