In January 2001, Marty Graw a computer technician was asked by his neighbour, B.A. Ware, a manager of RAM Hardware Company, ("RAM") to join RAM to do project work for him.

Assuming a valid contract exists, decide if Marty is

A) Unfairly dismissed employee or

B) Disloyal contractor in breach of contract and subject to a claim for damages.

 

Marty Graw thought hard about the offer during a vacation to New Orleans. Upon returning, he quit his job and joined RAM.

Marty was well accepted and did a good job. Mr. Ware was pleased and asked Marty to sign a contract with RAM. Marty's wife, who was a fan of ABBA, a band popular in the 1970's, begged Marty to register his business as "ABBA Consulting Company", before signing. On October 1, 2001 ABBA signed a 1 year contract with RAM.  This Contract is in your materials.

From October 1, 2001 until 2009, Marty continued working for RAM. Technically his contract expired in October 1, 2002, but since the relationship was based on trust, RAM and Marty thought it was fine to renew it verbally versus in writing.

Marty worked in RAM's offices as part of the team managed by Mr. Ware - he did well on his performance reviews. He was trusted by Mr. Ware to represent RAM with customers and suppliers and negotiated and even signed deals for RAM. He was rewarded with increases in his hourly rate and vacation time.

In October 2009, B.A. Ware retired and was replaced by Anna Sasin, who was a stickler for the rules. Around the same time, Marty requested a four (4) week vacation. Mr. Ware approved it before he retired and let Ms. Sasin know by leaving a memo on her desk on his last day.

Ms. Sasin, while reviewing the employment records left behind by Mr. Ware discovered the 2001 Contract with ABBA. She promptly called Marty to her office and undiplomatically told him that he was a Contractor and not entitled to vacation and moreover, that during this busy time he had to stay and work.

Marty, having bought the tickets for his vacation reacted badly and a heated discussion ensued. Ms. Sasin became exasperated and told Marty that she would pay him for 20 more days of work as per their contract, but his services were no longer needed thereafter. Marty said that "he was an employee and that he was just asking to be treated the same as everybody else in the office."

Marty applied and was relieved to be hired by BULL almost immediately and moreover, into a more senior role where his experience at RAM could be used to BULL's advantage. Ms. Sasin, upon finding this out, hired a lawyer and sued for breach of contract.

Answer rating: 100% (QA)

The first question is whether Marty is an employee or a contractor of RAM This is important because different employment statuses have different rights and obligations under the law Employees are enti... View the full answer