When working with small companies, and in particular, when it is an individual doing the work, there is often a significant amount of work that is done informally. An email is sent, responded to, some phone calls exchanged, and the work begins. The terms may or may not be clear to everyone involved, the expectations might not be clearly defined.
Often, there is a contract, but it is only arranged after the work has begun, which makes its validity questionable from a legal perspective. At a minimum, the issues regarding the work already done would have to be addressed in the contract to some extent.
The problem arises, however, if a disagreement arises prior to a contract being signed. As an employer, you need to be very careful that any commitments already made, whether verbal or written, are still being honored.
As an example, take an employer who hires someone to perform some work, and agrees to bypass the training normally required to do that work. The company’s policy is that people who are training are not paid.
If, after a few days on the job, the employer decides that the new employee needs more training, at this point in time, they may still be obligated to pay the employee. The reason is that the employee can argue that the agreement was to be paid for the work – and that there would be a certain amount of work available to be done. If the employer decides to remove that work, they need to be aware that they might still have to pay the employee for the training at this point.
That’s not to say that the employer is necessarily in the wrong for refusing to pay, but that regardless of the legal right or wrong, from an image perspective, it would be critical to pay this employee. First, it will build trust in the employer that they honor their agreements. Second, the employee might have given up another opportunity when told that they would be paid – potentially making the employer liable for that missed opportunity.
But most importantly, people need to honor their obligations. If you give someone your word, and then discover that an error was made, you need to try, as much as possible, to honor whatever promises were made.
After all, building trust starts with being trustworthy, and if you don’t honor your word, then you are not trustworthy.