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Today's Practice | May 2012

Drafting an Employment Contract

A suitable contract helps establish a healthy employer-employee relationship.

The contract of employment between an ophthalmic practice and its new physician can help form the foundation for a successful working relationship. Therefore, it is imperative to draft a thorough yet clearly written contract to eliminate any potential misunderstandings that could occur regarding the physician’s employment. Prior to having a new employee sign his or her contract, it is advisable to have the document reviewed by a legal expert to ensure that all provisions adhere to applicable legislative employment law requirements and are therefore enforceable. Overall, the contract should aim to protect both the employee and the employer.

In Europe, employment contracts are individualized and differ greatly among countries. In an interview with Cataract & Refractive Surgery Today Europe, Maggie Middleton, Chief Executive of Centre For Sight in London, discussed some of the key contract provisions for medical staff in the United Kingdom who work in the public sector, for the National Health Service (NHS). For information on employment in the private sector, see the sidebar on page 20.


The employment contract should state the employee’s title and job description. It should also specify the physician’s normal place of work and list the locations of the other clinics to which he or she may be required to travel. The document should state the standard hours the physician will be required to work per week and provide specifications concerning lunch breaks. There are a certain number of agreed sessions to the job plan, and if there is a possibility that the physician may have to undertake sessions on a Saturday, this should be noted in the contract as well. Any additional hours worked above the agreed hours will be covered in ongoing discussions with the line manager.


The employment contract should clearly state the employee’s base salary and any incentive compensation or bonus arrangement offered. It should outline the company’s reimbursement policy for expenses incurred by the employee on behalf of the employer, such as license fees, continuing medical education costs, travel costs, and professional association dues. Make note of whether receipts must be retained to validate expense claims and of the practice’s pension scheme. The contract should state the amount of leave provided by the organization for study/professional work and the conditions for applying for this activity.

A set of criteria and objectives to evaluate the ophthalmologist’s performance should be listed in the job specification. These criteria may be used to determine the physician’s commitment to the organization as well as his or her level of productivity and quality of work. Review will be undertaken through monthly one-on-one meetings and scheduled appraisal meetings.


Annual leave and bank holidays. The employment contract should note the employee’s annual leave entitlement per year. Additionally, it should state how the annual leave is calculated and detail the process for requesting leave. The contract should note how far in advance the employee should request leave and whether the organization cannot guarantee that the requested dates will be authorized. Additionally, if the practice has rules/preferences about employees who hold similar positions taking leave at the same time, this policy should be discussed.

The number of bank holidays (ie, national holidays) per year and conditions the employee must follow when taking a holiday should be discussed in the document. The contract should also list what other time is provided for medical education, professional society meetings, and board examinations.

Sickness and disability. The contract should explain how much sick time the new ophthalmologist will receive during each year of employment. It should also detail the reporting process the employee should follow to inform the employer of his or her absence and note the scenarios that would require a doctor’s certificate to be presented. The contract should also discuss what type of sick pay the employee is entitled to receive.

Grievance and disciplinary issues. The process for handling grievances regarding the physician’s employment should be mentioned in the contract. It is advisable to also note the company’s disciplinary policy, whether elaborated in the contract or in the employee handbook.

Termination of employment. It is crucial to include termination provisions, which define the circumstances under which the physician or the organization may terminate the contract early. The practice retains the right to terminate the contract for several reasons, including loss of license to practice medicine, loss or failure to obtain board certification, conviction of a crime or felony, loss or failure to qualify for malpractice coverage, and failure to obtain or maintain hospital privileges. The employee has the right to terminate his or her employment agreement, but many contracts require the physician to provide a minimum notice of his or her intent to terminate. This allows the practice to rearrange staffing schedules and search for a replacement. A typical notice provision is 3 to 6 months.


It is important that the contract state that the employer reserves the right to amend the contract of employment from time to time. In that event, the employee should be consulted and given necessary notice. Employment contracts play an important role in both the hiring process and in maintaining a successful work environment for employer and employees alike.

Maggie Middleton is the Chief Executive of Centre For Sight in London. She may be reached at e-mail: mmiddleton@centreforsight.com.