Contractor left in wilderness by company

Contractor and company disagreed on whether oral contract was for fixed term or contingent on work available
|Canadian Employment Law Today|Last Updated: 01/08/2009

This instalment of You Make the Call features a dispute over the existence of an oral contract.

Dean Williams was an independent editor, videographer, graphic designer and video technician. In May 2007, he was hired by Wildman Productions, a video production company based in Whitehorse that specialized in filming wildlife. He was initially hired under an oral contract for one month, which was followed by further terms of three and three-and-one-half months, respectively, lasting until December 2007. The contracts were not for fixed terms but were contingent on enough work being available for him, which Wildman said was normal in the Yukon film business.

On Dec. 10, 2007, Wildman met with Williams so it could outline a new pay structure for any further services he would provide, as long as there was work for him. He would have more work if Wildman could secure a government project that was in the works. They agreed Williams would be paid $3,000 per month in biweekly instalments plus three per cent of the company’s gross until June 2008. His hours of work were defined as 9 a.m. to 5 p.m. when Wildman’s office was open. However, by agreeing to these terms, Williams felt this constituted an oral contract for his services beginning Jan. 3, 2008, and running for the next six months.

On Jan. 3, Williams returned from vacation and began working on the government project involving the production of 115 DVDs, for which Williams had been involved in the initial planning of in December. On Jan. 25, Williams showed the DVD’s specifications to one of the owners of Wildman. His boss made it clear he was not happy with some of Williams’ work and the two men got into a heated argument.

The next morning Williams’ boss told him his contract was being terminated but he wasn’t given a reason. He was paid for his work up to the previous day and told he would be given a plane ticket to Vancouver, where had come from for the job.

A few days later, Williams contacted the other owner, who had been on vacation and wasn’t aware of the termination. The second owner discussed it with his partner and later told Williams there was no further work for him and his services were no longer required.

Williams claimed he had an oral contract for six months and should have received notice of termination. He sued for breach of contract, asking for $18,900 in damages.

You Make the Call

Did Wildman breach an oral contract with Williams?

OR

Was Wildman free to terminate Williams for lack of work?

If you said there was an oral contract and Wildman breached it, you’re right. The court found Wildman and Williams set out the duties to be performed, what his pay would be and the time period for his services. There was no uncertainty of terms for the contract.

The court also found Williams’ work from May to December 2007 were under time limits and not work dependent, particularly since Williams submitted proposals for additional work each time one of the contracts ended, showing he was kept on for more than existing projects.

Also worth considering, the court said, was the “unusual” circumstances in which Williams was terminated. He was given no warning and the other owner was not aware of it until Williams contacted him. The fact it came after a heated argument between Williams and his boss made it more suspicious.

“Given the history of the parties and the nature of their relationship, the termination appears to be more consistent with a spur of the moment decision by (Williams’ boss) than with a carefully considered decision that arose from a lack of work,” the court said.

The court found Wildman and Williams had entered into a six-month oral contract on Dec. 10, 2007, and Wildman breached it when it terminated Williams. It ruled Williams was entitled to damages for the breach and agreed to hear further evidence before determining the amount. See Williams v. WildMan Productions Inc., 2008 CarswellYukon 58 (Y.T. Sm. Cl. Ct.).