Running a dental practice isn’t just about perfecting smiles—it’s also about managing people, mitigating risk, and ensuring your business can thrive without unexpected legal pitfalls. Few people understand this better than Dirk de Lint, partner at MBC Legal, a firm specializing in employment law for dental and healthcare practices. With over 13 years in employment law (and another 12 as senior legal counsel and legislative drafter at the Ontario Securities Commission), Mr. de Lint has seen first-hand how the right contracts—or the lack thereof—can make or break a practice.
MBC Legal is affiliated with MBC Brokerage, which specializes in valuing and selling dental and other healthcare practices. That dual perspective means Mr. de Lint knows exactly how employment issues can impact a practice’s day-to-day operations and its long-term value.
Why contracts are more than paperwork
When asked for the single most important piece of employment law advice for dentists, Mr. de Lint doesn’t hesitate:
“Employment contracts are extremely important,” he says. “But equally important—and less understood—is the employer’s duty of good faith and fair dealing with employees.”
This duty, recognized by the Supreme Court of Canada in the late 1980s, is rooted in the idea that employment is central to a person’s identity and self-worth. Courts treat the employment relationship as a special contractual relationship, which means the law scrutinizes not just what you do as an employer, but how you do it.
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That’s where many small business owners—including dentists—run into trouble. Frustrated with underperforming staff, some respond emotionally: ignoring employees, making snide remarks, or embarrassing them in front of their colleagues. According to Mr. de Lint, that’s a fast track to legal problems. Instead, dentists should use the tools available under employment law: properly drafted contracts, documented policies, formal warnings, and, when necessary, performance improvement plans.
The contract advantage: Dollars and sense
From a purely financial perspective, properly drafted contracts can dramatically reduce termination costs. Without one, the courts fall back on awarding employees “reasonable notice,” often calculated at about one month per year of service—up to 24 months. With a well-drafted contract, termination costs can be limited to the Employment Standards Act (ESA) minimums—a maximum of eight weeks’ notice or pay.
For example:
- Without a contract, terminating a 15-year employee could cost roughly 15 months’ pay.
- With an ESA-compliant contract, the same termination might cost only eight weeks’ pay.
This difference also impacts practice sales. Buyers are wary of acquiring long-term staff without contracts, as the termination liabilities can reduce a practice’s value—and their purchase offer.
Beyond contracts: Policies and processes
While contracts set the foundation, policies are the operational backbone and can address a wide-range of problem areas, including cell phone use, professional conduct, gossip, punctuality, and computer use. Clear, written expectations give dentists a defensible position if problems arise.
Performance improvement plans and progressive discipline (oral reprimands, written warnings, final warnings) provide further structure. When looking to terminate a poor-performing employee in a high-risk situation (e.g., one who has taken a stress leave), taking these steps, when properly documented, can show that you met your duty to treat the employee fairly and in good faith. Being able to show the employee’s lawyer that you’ve properly documented these steps will often put an end to what could otherwise be a substantial and costly legal claim.
When to introduce contracts
Transitioning your staff to written contracts can be done at any time, so long as it’s done properly. The ideal time? Yesterday. Failing that, Mr. de Lint suggests practice owners consider other opportune times:
- At the start of a new hire’s employment.
- When purchasing a practice.
- Before giving raises—making the raise conditional on signing.
Raises are a particularly effective trigger for updating an employee’s contract, as they provide a tangible benefit in exchange for the employee’s agreement to updated terms. This, Mr. de Lint notes, is not considered duress—as long as employees have a fair opportunity to review the contract.
Mitigation: The employee’s obligation
Employees who are terminated also have legal duties—namely, to “mitigate” their losses by seeking similar work. While courts often give employees a grace period, dentists can strengthen their position by documenting available job postings and reminding the employee’s lawyer of this obligation.
Still, Mr. de Lint cautions, terminations should be carefully planned. A pre-termination consultation with legal counsel can identify risks, explore alternatives, and reduce exposure to wrongful dismissal claims.
The law is evolving—fast
In recent years, courts have thrown out long-accepted contract language, especially in termination clauses. A 2024 Ontario case, for instance, invalidated a commonly used phrase allowing termination “at any time” on the grounds it could theoretically allow unlawful dismissals. Subsequently, lower courts in B.C. and Ontario have ruled the opposite, creating significant uncertainty in the case law. Mr. de Lint advises that the most recent Ontario case is being appealed, which should result in the Ontario Court of Appeal providing clarity and direction to employers and their counsel.
Nevertheless, for dentists, the takeaway is clear: even if your contracts were solid a few years ago, case law may have shifted. Mr. de Lint recommends having your contracts reviewed:
- Whenever hiring a new employee.
- Before giving raises.
- Whenever you learn that a significant legal decision has emerged.
The bottom line
Employment contracts aren’t just legal formalities—they’re essential business tools that protect your practice’s value, provide clarity to your team, and help you navigate the complexities of running a modern dental office.
“It’s about limiting your cost and your risk,” de Lint concludes. “The sooner you put proper contracts and policies in place, the better positioned you are to run a successful practice—and sleep well at night.”
Quick tips: Bulletproofing your dental practice
By Dirk de Lint, MBC Legal
1. Get employment contracts in place—now
- Use ESA-compliant language to cap termination costs.
- Review your contracts regularly.
- Check whether an update is required before hiring or giving a raise.
2. Know your duty of good faith
- Treat staff respectfully, even when performance is poor.
- Avoid public embarrassment or retaliation.
- Consider the use of the tools available to employers, such as written warnings and performance improvement plans.
3. Keep a solid employee policy manual
- Address cell phone use, punctuality, professionalism, gossip and many other issues that can, if left unattended, grow into larger and more costly problems.
- Reference policies in contracts and discipline steps.
4. Manage terminations wisely
- Consult legal counsel before dismissing anyone.
- Document misconduct and performance issues.
- Remind employees (and their lawyers) of the employee’s duty to mitigate losses.
5. Review contracts more often than you think
- Check with expert counsel before every new hire or raise.
- Check whether an update is needed after a major legal decision. (Contact MBC Legal and ask to receive their monthly email on legal and brokerage issues to ensure you stay up-to-date.)
About the author
Dirk de Lint is a partner at MBC Legal. MBC Legal provides employment law advice primarily to dental practices and other employers in the health care sector. MBC Legal is affiliated with MBC Brokerage, which specializes in the valuation and sale of dental practices and practices in other health care sectors. Mr. de Lint has been practicing employment law for thirteen years. Prior to joining MBC, he was senior legal counsel at the Ontario Securities Commission for twelve years.
