Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., (1992) 136 N.R. 40 (SCC)

• Judge: Gonthier, Cory, McLachlin and Iacobucci, JJ.
• Court: Supreme Court (Canada)
• Case Date: March 02, 1992
• Jurisdiction: Canada (Federal)
• Citations: (1992), 136 N.R. 40 (SCC);53 OAC 200;[1992] ACS no 41;11 CPC (3d) 140;JE 92-783;[1992] SCJ No 41 (QL);[1992] CarswellOnt 892;1992 CanLII 102 (SCC);91 DLR (4th) 491;7 OR (3d) 480;136 NR 40;1992 CanLII 91 (SCC);[1992] 1 SCR 831;[1992] 1 SCR 986;40 CCEL 1

Lefebvre v. HOJ Industries Ltd. (1992), 136 N.R. 40 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Gilles Lefebvre v. HOJ Industries Limited

Marek Machtinger v. HOJ Industries Limited

(21586)

Indexed As: Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd.

Supreme Court of Canada

La Forest, L'Heureux-Dubé, Sopinka,

Gonthier, Cory, McLachlin and

Iacobucci, JJ.

April 30, 1992.

Summary:

Lefebvre and Machtinger were both em- ployed by a used car dealer. Lefebvre's contract of employment provided for termi­nation by the employer on two weeks' notice (or two weeks' salary in lieu thereof). Mach­tinger's contract provided for termination of employment upon no notice. Both Lefebvre and Machtinger were terminated without cause and given four weeks' salary in lieu of notice. Both Lefebvre and Machtinger com­menced separate actions for damages for wrongful dismissal. The two actions were tried together.

The trial judge held that the provisions for notice of termination contained in each of the employment contracts were null and void under s. 3 of the Employment Standards Act, but that the employees were each entitled to the common law remedy of damages for wrongful dismissal based on what was a reasonable period of notice. The trial judge held that a reasonable period of notice for Lefebvre was 7.5 months and for Mach­tinger, seven months. The trial judge awarded damages accordingly. The employer appealed. Lefebvre and Machtinger cross-appealed but abandoned the cross-appeals.

The Ontario Court of Appeal, in a decision reported in 31 O.A.C. 1; 66 O.R.(2d) 545; 55 D.L.R.(4th) 401; 23 C.C.E.L. 77, allowed the appeals. The Court of Appeal agreed that the notice periods stipulated in the contracts of employment were invalid under the Em­ployment Standards Act, but held that the employees were not entitled to damages for wrongful dismissal on the basis of an im- plied term that they should have been given reasonable notice of termination of their employment. The Court of Appeal held that the employees' benefits in these circum­stances were limited to those given under the Employment Standards Act. Lefebvre and Machtinger appealed.

The Supreme Court of Canada allowed the appeal and restored the decision of the trial judge.

For a previous decision of the Supreme Court respecting the same parties, see 134 N.R. 386.

Master and Servant - Topic 1230

Contract of hiring (employment contract) - Termination - Notice of termination - By employer - The Employment Standards Act of Ontario provided for mandatory minimum notice of termination periods - The Supreme Court of Canada held that by virtue of s. 3 of the Act, contractual provi­sions which did not comply with the mini­mum notice requirements of the Act were null and void as being attempts to contract out of the Act - See paragraph 26.

Master and Servant - Topic 1230

Contract of hiring (employment contract) - Termination - Notice of termination - By employer - The Employment Standards Act of Ontario provided for mandatory minimum notice of termination periods - The Supreme Court of Canada held that under ss. 4 and 6 of the Act the minimum notice periods do not operate to displace the presumption at common law of rea­sonable notice - The court held that the common law presumption of reasonable notice was a "benefit" within the meaning of s. 4(2) which, if the period of notice required by the common law was greater than that required by the Act, will, if otherwise applicable, prevail over the notice period set out in the Act - The court held that, from a public policy standpoint, if an employment contract fails to comply with the minimum statutory notice provisions of the Act, the presump­tion of reasonable notice is not rebutted; an employee can only be dismissed with­out cause if given reasonable notice of termination - See paragraphs 23 to 25, 30 to 37.

Master and Servant - Topic 8001

Dismissal without cause - Notice of dis­missal - Reasonable notice - Effect of statutory requirements - [See both Master and Servant - Topic 1230 ].

Master and Servant - Topic 8404

Employment and labour standards - Lay­off or dismissal - Notice - [See both Master and Servant - Topic 1230 ].

Cases Noticed:

Collins v. Kappelle (1983), 3 C.C.E.L. 228 (Ont. Dist. Ct.), refd to. [para. 8].

Pickup v. Litton Business Equipment Ltd. (1983). 3 C.C.E.L. 266 (Ont. Dist. Ct.), refd to. [para. 8].

Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), refd to. [para. 10].

Carter v. Bell & Sons (Canada) Ltd., [1936] O.R. 290 (C.A.), refd to. [para. 19].

Prozak v. Bell Telephone Co. of Canada (1984), 4 O.A.C. 12; 46 O.R.(2d) 385 (C.A.), refd to. [para. 21].

Rover International Ltd. v. Cannon Film Sales Ltd., [1989] 1 W.L.R. 912 (C.A.), refd to. [para. 27].

Erlund v. Quality Communication Products Ltd. (1972), 29 D.L.R.(3d) 476 (Man. Q.B.), refd to. [para. 28].

James v. Thomas H. Kent & Co., [1950] 2 All E.R. 1099 (C.A.), refd to. [para. 28].

Suleman v. British Columbia Research Council (1989), 38 B.C.L.R.(2d) 208, refd to. [para. 29].

Reference Re Compulsory Arbitration, [1987] 1 S.C.R. 313; 74 N.R. 99; 78 A.R. 1; 38 D.L.R.(4th) 161, refd to. [para. 30].

Canadian Pacific Hotels v. Bank of Montreal, [1987] 1 S.C.R. 711; 77 N.R. 161, not consd. [para. 39].

Allison v. Amoco Production Co., [1975] 5 W.W.R. 501 (Alta. S.C.), refd to. [para. 47].

Liverpool City Council v. Irwin, [1977] A.C. 239, varying [1976] 1 Q.B. 319 (C.A.), refd to. [para. 51].

Tai Hing Cotton Mill Ltd. v. Liu Chong Hing Bank Ltd., [1984] 1 Lloyd's Rep. 555 (Hong Kong C.A.), revd. [1986] A.C. 80 (P.C.), refd to. [para. 52].

Lister v. Romford Ice and Cold Storage Co., [1957] A.C. 555 (H.L.), refd to. [para. 53].

Sterling Engineering Co. v. Patchett, [1955] A.C. 534 (H.L.), refd to. [para. 56].

Statutes Noticed:

Employment Standards Act, R.S.O. 1980, c. 137, sect. 1(e), sect. 2(2) [para. 14]; sect. 3 [paras. 14, 26, 29, 37, 42]; sect. 4 [paras. 14, 25-26, 37, 42]; sect. 6 [paras. 14, 25, 37]; sect. 40(1) [para. 42]; sect. 40(1)(c) [paras. 13-14, 24, 26]; sect. 40(7)(a) [paras. 14, 24].

Interpretation Act, R.S.O. 1980, c. 219, sect. 10 [para. 31].

Statute of Artificers, 1563, 5 Eliz., c. 4 [para. 19].

Authors and Works Noticed:

Christie, I., Employment Law in Canada (1980), p. 347 [para. 21].

Etherington, B., The Enforcement of Harsh Termination Provisions in Personal Em­ployment Contracts: The Rebirth of Freedom of Contract in Ontario (1990), 35 McGill L.J. 459, p. 468 [para. 32].

Freedland, M.R., The Contract of Employ­ment (1976), pp. 151-154 [para. 19].

Jacoby, S.M., The Duration of Indefinite Employment Contracts in the United States and England: An Historical Anal­ysis (1982), 5 Comp. Lab. L.J. 85, p. 88 [para. 19].

Swinton, K., Contract Law and the Em­ployment Relationship: The Proper For- um for Reform, in Studies in Contract Law (B.J. Reiter and J. Swan, Eds.) (1980), pp. 360-361 [para. 2].

Treitel, The Law of Contract (7th Ed. 1987), pp. 158-165 [para. 46]; 162 [para. 48].

Counsel:

Howard A. Levitt, Constance C. Olsheski and Stacey R. Ball, for the appellants;

John R. Sproat, for the respondent.

Solicitors of Record:

Howard Levitt & Associates, Toronto, Ontario, for the appellants;

Miller, Thomson, Toronto, Ontario, for the respondents.

This appeal was heard before La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin and Iacobucci, JJ., of the Supreme Court of Canada on March 2, 1992. The decision of the Supreme Court was delivered in both official languages on April 30, 1992, when the following opinions were filed:

Iacobucci, J. (La Forest, L'Heureux-Dubé, Sopinka, Gonthier and Cory, concurring) - see paragraphs 1 to 39;

McLachlin, J. - see paragraphs 40 to 57.