Australia: Office Christmas parties…'tis the season to think before you drink

Last Updated: 13 December 2015
Article by Daria McLachlan

It's beginning to look a lot like Christmas...and office parties are in full swing! Unfortunately Santa's gift to employers tends to be an increase in workplace claims arising from sexual harassment, bullying, discrimination and work health and safety breaches. This is unlikely to make any employer jolly, but there are steps you can take to reduce the risk of such claims arising.

The obligations of employers

The legal obligations of employers continue to apply during work Christmas parties. Employers owe a duty of care to their employees and must take reasonable steps to reduce potential risks to their health and safety. This includes protecting them from the heightened likelihood of sexual harassment, bullying, discrimination and safety breaches that tend to come hand-in-hand with alcohol consumption.

The general position is that employers will be vicariously liable for employees' misconduct unless the employer can show it has taken all reasonable steps to prevent the conduct from occurring. The case law makes it clear that this obligation extends to work Christmas parties and other work-related functions.

Lessons learnt from the courts

The decision of Ewin v Vergara (No 3) is an example of where an employer was found to be vicariously liable for sexual harassment. In this case, it was held that inappropriate sexual conduct that took place in a taxi and at a hotel was connected to employment because the

Employers owe a duty of care to their employees and must take reasonable steps to reduce potential risks to their health and safety.

behaviour was part of a course of conduct that had started in the workplace.

A recent decision before the Fair Work Commission has highlighted the difficulties employers can experience when disciplining misbehaving employees if they do not have appropriate controls in place before work functions are held. In Keenan v Leighton Boral Amey Joint Venture, the Commission held that dismissing an employee for drunken and inappropriate conduct at a work Christmas party where the supply of alcohol was unlimited and unmonitored was unfair. During the party a male employee made offensive comments to a number of his co-workers and later attended a public bar with his colleagues where he swore at his boss and made unwelcome sexual advances to a female co-worker. As a result of this conduct, the employee was dismissed.

The employee filed for unfair dismissal and was successful in part because the employer had provided him with unlimited alcohol, despite his obvious intoxication. This was held to be a mitigating factor for his conduct as he could not be held accountable for his behaviour to the degree necessary for dismissal. This decision confirms that employers may not be in a position to insist on appropriate standards of conduct at functions if they serve unlimited amounts of free alcohol.

In the decision of Canny v Primepower Engineering, an apprentice suffered serious burns to 60% of his body when he was engulfed in flames at a birthday party at work. The employer provided 11 kegs of beer at the party. A number of intoxicated employees subsequently started working on an engine using flammable liquids, which resulted in the apprentice's injuries.

The apprentice sued the employer for damages on the basis that it had been negligent in allowing employees to work on the engine while intoxicated. The Court held that the employer had breached its duty of care by providing free-flowing alcohol at work and that it had failed to provide a safe system of work by not adequately supervising the employees.

Tips to reduce your risk

To avoid a Christmas party legal hangover, we recommend the following:

  1. Before your function, remind your employees that it is a work event and that appropriate standards of behaviour, as set out in your workplace policies, are expected.
  2. Identify any potential hazards by performing a risk assessment of the party venue.
  3. Warn employees about the potential consequences of inappropriate behaviour.
  4. Set a start and finish time for the function and make it clear that events/activities that occur outside of this time frame are not endorsed by the employer.
  5. Ensure a senior employee is assigned to stay sober and monitor behaviour and alcohol consumption. This role may require taking action to address escalating behaviour, such as sending someone home or closing the bar.
  6. Comply with responsible service of alcohol requirements and provide sufficient food and non-alcoholic drinks at the event. If an employee is visibly intoxicated then cut off their alcohol supply.
  7. Ensure you have up-to-date policies and procedures on bullying and harassment, discrimination, social media, work health and safety, and drug and alcohol use. You should also have policies that set out your complaints process so that any incidents can be swiftly and appropriately addressed.
  8. Communicate your policies and procedures to your employees and ensure appropriate training is provided.
  9. Immediately deal with all complaints in a professional and confidential manner.
  10. Review your applicable insurance policy to assess whether the proposed Christmas function is covered.

There is no need to be a Grinch when it comes to your Christmas party. It is simply a matter of being prepared and having systems in place to ensure you can manage and address any issues that may arise during your event. We wish you a happy and liability-free Christmas!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Daria McLachlan
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