Ontario Severance

Machtinger v. HOJ Industries Ltd. (Ont. C.A.)

1988 CanLII 4645 (ON CA)Court of Appeal for OntarioDecided Wrongful dismissal

Machtinger v. HOJ Industries: Invalid Termination Clauses

Summary

This is a merits decision by the Court of Appeal for Ontario concerning the enforceability of termination clauses in employment contracts that provide less notice than the statutory minimum under the Employment Standards Act. The court held that such provisions are null and void under the Act and that reasonable notice should not be implied into the contract. Consequently, employees dismissed without cause under such contracts are limited to statutory minimum notice or pay in lieu, with no entitlement to damages for common law reasonable notice. This decision was appealed to the Supreme Court of Canada, which reversed it (Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986). The Supreme Court set aside the Court of Appeal's decision and restored the trial judge's decision, holding that the employees were entitled to common law reasonable notice because the termination clauses in their contracts failed to meet statutory minimums and were therefore null and void. The trial judge's awards of 7 and 7.5 months of notice respectively were reinstated without reduction for the invalid clauses' intended terms.

Outcome

reversed by the Supreme Court of Canada ([1992] 1 SCR 986)

Award

employees limited to statutory minimum notice or pay in lieu; no entitlement to damages for reasonable notice

Key Factors

  • termination clauses
  • Employment Standards Act
  • statutory minimum notice
  • implied terms
  • wrongful dismissal

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This summary was written by AI from the published decision and its headnote. It is not an official version of the decision; read the full text on CanLII before relying on it. This is legal information, not legal advice. Ontario Severance is an educational tool. If you are facing a serious employment law matter, consult with a qualified employment lawyer in Ontario.