Hi there. Your situation raises several important legal issues.

Employment status

Even though you were not paid by the employer, it is still possible for you to be considered an employee in the eyes of the law. Whether you were an employee depends on many things. If you were helping with the ordinary operation of the business or were integral to the running of day-to-day business, rather than just obtaining work experience or observing, you are more likely to be considered an employee. Similarly, if your work was benefiting the business rather than you personally, you are likely to be an employee.

If you were legally an employee, the employer has a legal duty to pay you wages. This applies even if no written employment contract was signed between you and the employer. Depending on the exact nature of the arrangement, you may be able to claim unpaid wages from the employer.

Mistake on the job

Employees have a duty to exercise reasonable skill and care on the job. If an employee fails to exercise reasonable skill and care, and the employer suffers a loss as a result, the employer has a right to recover that loss from the employee. Often employers are insured for these losses so that they can recover the money from an insurer, rather than the employee, who may not have enough money to cover the loss.

If you made a mistake on the job causing the business to lose money, you will not have to repay the money unless you failed to exercise reasonable care and skill in doing your work. An employee’s honest and inadvertent mistake, especially where there is little supervision on the job, is not likely to result in the employee being liable for the loss. However, if the employee engaged in serious misconduct or wilful negligence, they will have to repay any loss suffered by the business.

If you were not considered an ‘employee’ of the business, the outcome is similar. In the work arrangement you described, the law may say that you owed the owner of the company a duty to act with care. If the owner can prove that your conduct fell below the standard of a reasonable person in your position, then the owner may be able to recover any financial loss caused by your conduct.

Suggested way forward

From the information you provided, it is unlikely you are obliged to repay the money to the employer. From a practical perspective, the employer would need to commence formal legal proceedings against you to recover the money. This may be more costly than the value of the loss, so the employer may decide not to pursue the matter. But if they do, you should speak to an employment lawyer who can advise you of your legal rights. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.