Australia: All I want for Christmas…is legal protection from vicarious liability

Last Updated: 17 November 2017
Article by Benjamin Marshall and Hannah Dunai

Most Read Contributor in Australia, August 2018

Christmas is nearly upon us and everyone in the workplace is looking forward to kicking back and celebrating the end of another busy year.

Everyone, that is, except for Human Resources – who are tasked with the unenviable job of attempting to navigate the legal minefields scattered throughout the festive season, without being branded the office Fun Police.

In the face of increasing penalties for contraventions of bullying and sexual harassment laws, now more than ever employers need to be aware of their responsibilities when it comes to end of year celebrations, and to take steps to ensure the safety of their employees and protect themselves against vicarious liability for the transgressions of their staff.

The consumption of alcohol in particular has the potential to create risks to safety and result in unprofessional and even criminal behaviour. Employers have a duty to serve alcohol responsibly, and to take all reasonable steps to guard against risks arising from drinking at work-related functions. Where an employee is injured, or otherwise exposed to harm arising from intoxication at a work function, an employer can be held liable if it induced or encouraged the excessive consumption of alcohol, and may end up on the receiving end of a workers' compensation claim.

Further, where employers dismiss inebriated employees who engage in misconduct at work functions, the Fair Work Commission will not necessarily hold those employees to ordinary standards of behaviour when determining whether or not the dismissal was unfair. In the 2015 case of Keenan v Leighton Boral Amey NSW Pty Ltd, the Fair Work Commission warned:

"...it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at the function. If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately."

Examples of legal action arising from a work-related function include:

  • a team leader who, after becoming heavily intoxicated and abusing and sexually harassing his colleagues, was found to be unfairly dismissed, in part due to his employer's irresponsible service of alcohol
  • a Kalgoorlie employer who was found liable for severe burn injuries suffered by an employee at a work barbeque, when he and other employees attempted to seize a disused car engine while intoxicated
  • a claim for negligence brought against an employer in the Supreme Court by an employee who was king-hit on an office Christmas cruise by an attendee of another party on the boat (the employer was ultimately cleared of liability).

Importantly for employers, their responsibility does not necessarily end once the drinks stop flowing and the lights go up, as they can still be held vicariously liable for the unlawful actions of their employees outside of work hours, where the impugned conduct is connected to their employment. In a notable decision earlier this year, an employer was ordered to contribute to an award of over $300,000 in compensation for sexual harassment, which took place whilst two of its employees were staying in employer-funded accommodation.

Unless you plan on hosting 2017's most boring office Christmas party, it is not possible to eliminate all risks associated with the festive season. However, there are some important steps employers should take to manage those risks, including:

  1. have clear, legally compliant workplace policies in place in relation to bullying, sexual harassment and the consumption of alcohol, and ensure employees are familiar with those policies
  2. take the opportunity to remind employees at the start of the festive season of the standards of behaviour expected of them when attending work-related functions
  3. serve alcohol responsibly (in particular avoid the "help yourself" method of service), provide plenty of food and water and ensure that inebriated employees are promptly cut off from the bar
  4. provide for clear 'start' and 'finish' times for work-related festivities
  5. provide safe means of transport home from work-related functions, especially in the case of employees who are intoxicated or otherwise vulnerable.

Finally, if all else fails, retreat to a corner with a glass of wine and remind yourself that the office Christmas party only happens once a year.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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