I’m Kate Dewhirst.

I’m a lawyer who writes about legal issues affecting healthcare in Canada

Kate Dewhirst Health Law - bringing the law to life. Meet Kate (in 13 seconds)

Did you know employment termination packages are subject to pre-approval by the Ministry? Guest Blogger: Maria McDonald

Posted by

Calling all family health teams in Ontario.  Here’s something you should know!

This blog was written by Maria McDonald from McDonald HR Law

Did you know that section 4.1 of the standard family health team (FHT) funding agreement with the Ministry of Health and Long Term Care (MOHLTC) requires FHTs to obtain written pre-approval from the MOHLTC before paying an employee termination pay or severance in excess of the Employment Standards Act, 2000 (the ESA)?

4.1 reads as follows:

The Recipient shall ensure that the terms and conditions of any employment contract that the Recipient enters into for the purposes of this Agreement, shall not, in any way, contradict the terms and conditions set out herein unless otherwise consented to by the Ministry in writing. In no case shall the Recipient negotiate termination payouts and severances with any Recipient Personnel which are greater than the minimum requirements set out in the Employment Standards Act and the Common Law unless otherwise consented to in advance and in writing by the Ministry. The Recipient shall obtain the Ministry’s prior written approval before making any settlement offers to any Recipient Personnel which exceed the minimum requirements set out in the Employment Standards Act.

What does that mean?

It means two things –  FHTs are:

  1. Prevented from agreeing to termination payouts and severances which exceed the Ontario ESA minimum or common law (common law is much more generous that the minimum ESA provisions) and
  2. Required to obtain the MOHLTC’s prior written approval before making any settlement offers to an employee which exceed the ESA

Ok, so what does it really mean? What are the practical implications of section 4.1?

The first requirement under section 4.1 (not to exceed the ESA or common law) is not an issue as rarely if ever would a FHT pay out more than common law entitlements to a terminated employee.

The second requirement is more problematic as there are numerous situations where it would be reasonable to pay out termination pay in excess of the ESA. For example:

  1. The employee’s contract does not have a termination provision, or it does not limit termination payouts to ESA minimums. Therefore, the employee has a claim for common law notice and the FHT negotiates a settlement package that provides more than ESA but less than the common law.
  2. The FHT negotiates a termination package in an employment contract more generous than ESA minimums to recruit a desirable employee. The FHT is legally obligated to honor that contractual provision.
  3. The FHT pays a terminated employee more than ESA to obtain a release for other potential legal claims (Human Rights, Harassment)
  4. The FHT is only obligated to pay ESA minimum but wants to pay an extra week or two to assist the employee during the transition period
  5. 4.1 requires FHTs to obtain written pre-approval from the MOHLTC before making any payments in excess of the ESA in the above scenarios.

Why are we talking about this now?

Section 4.1 has been part of FHT/MOHLTC funding agreements for many years. Quite frankly, the provision seemed to be largely ignored by FHTs and the MOHLTC.

However, since the Provincial election in June 2018, the MOHLTC appears to be more intent on enforcing its power of pre-approval via section 4.1. In recent discussions, the MOHLTC advised it wants to be consulted on termination arrangements. It wants to ensure the FHT has done its due diligence, which includes seeking legal advice prior to agreement to a termination payout which exceeds ESA minimums.

What’s a FHT to do?

If you are planning to offer either of these two things – pause:

  1. An employment contract (at the beginning of the relationship) with a termination provision which exceeds the minimum ESA termination provisions, or
  2. A termination package (at the end of the relationship) that exceeds the ESA termination provisions

Before you act – take the following steps before making the offer of the employment contract or termination provision:

  1. Obtain legal advice
  2. Be prepared to justify why this contract of employment or termination package should exceed ESA minimums
  3. Reclassify payments that are designed to settle other matters (such as human rights, harassment claims etc.) as something other than termination or severance payments
  4. Consult with the MOHLTC program manager before presenting the offer of employment or the termination package to the employee

I expect the MOHLTC will be reasonable in administering its powers of pre-approval. This is an exercise in fiscal accountability.  It will be necessary in complex employment situations to frame the termination package in way that demonstrates its reasonableness to the MOHLTC. The goal of section 4.1 is fiscal responsibility. The job of the FHT will be to demonstrate to the MOHLTC how its proposed termination package meets that goal.

Maria McDonald is a guest blogger. She can be reached at maria@mcdonaldhrlaw.com   


If you enjoyed this article please share it:


Previous and next posts from Kate:

Some of Kate’s recent and upcoming events

Primary care webinars: Employment Law Update & Legal Issues for EDs and Board members

Part of Kate’s monthly webinar series.

Our December program will address harassment in the workplace.
Full details of the 2021 webinar series and registration here.

Free healthcare privacy webinar - ask me anything!
the first Wednesday of every month

Free webinars - advance registration needed

Whether you're an experienced privacy officer or new in the field, pick Kate’s brain for free for an hour, in this live webinar. No charge, but you’ll need to register in advance.

Team Privacy Training Events
November 11, 12, 13, 18, 24, 25, 26, December 4 7

For Primary Care clinics, Hospitals, Community Agencies and Children’s Aid

Kate trains health professionals from many more health care organizations how being privacy-respectful can improve therapeutic relationships. More details...

Free Part X CYFSA privacy webinar - ask me anything!
the second Wednesday of every month

Free webinars - advance registration needed

Whether you're an experienced privacy designate or new in the field, pick Kate’s brain for free for an hour, in this live webinar. No charge, but you’ll need to register in advance.

Part X CYFSA Privacy Designate training
November 10 and 17

For Privacy Designates in the child welfare sector including children's aid societies and indigenous children's well-being centres

This course focuses on how to implement Part X of the Child Youth and Family Services Act in your organization.
Full details and registration here.

Health Privacy Officer training
April 2021

For Privacy Officers within healthcare organizations - now totally online.

This course focuses on how to become a more confident privacy officer and gives you the tools to document your privacy program. Full details and registration here...

Advanced Health Privacy Officer training
June 2021

For Privacy Officers within healthcare organizations - now totally online

This course focuses on taking theory into practice and we do real life scenarios to build your Privacy Officer skills.
Full details and registration here.

Kate Dewhirst Health Law

Kate says:

My mission is bringing the law to life. I make legal theory understandable, accessible and fun! I’m available and love to work for all organizations in the healthcare sector across Ontario and beyond.

Subscribe to my mailing list and keep up to date with news:

Latest Tweets


RT @choirchoirchoir: We sang the 🇨🇦 anthem at the Grey Cup 3 yrs ago + trended because we upped the BPM’s + actually had a good time with…

about 15 hours ago


contact details

P.O. Box 97010 Roncesvalles
Toronto Ontario M6R 3B3

(416) 855 9557

.