Christmas is not only the time to celebrate another year with family and friends, but it is also a time to celebrate your workforce, and your business’ achievements during the year. While Christmas parties can be great for team building and morale, such events are loaded with potential employment law risks.

This Employment Update aims to provide employers with practical tips to help ensure that their Christmas festivities run smoothly this year.  We also have a quick look at some cases to see the lessons learned from employers who have previously got it right or wrong.

Practical tips to implement

Firstly, employers should make sure that there are clear workplace protocols in place to regulate employee conduct at workplace functions.  The following are some key tips to assist employers:

• Set your expectations beforehand – have current workplace policies such as Drug and Alcohol, Social Media, Workplace Bullying, Sexual Harassment and Discrimination policies that outline your expectations in terms of employee behaviour (including at work functions).
• Communicate your expectations beforehand – ensure that employees have access to the workplace policies, including any complaints or grievance procedure, and have received recent training on those policies. We recommend refresher training on workplace conduct type policies at least every two years.
• WHS obligations – assess the location, venue and activities for the Christmas party. Identify potential hazards and assess the risk of an incident occurring.  Implement practical measures to reduce the risk of an incident, such as ensuring that there will be adequate food, non-alcoholic beverages and arrangements for travel after the event (where alcohol is being consumed).
• Send a reminder – prior to the function, remind employees about your behavioural expectations. They should understand that workplace policies apply to the work function and that disciplinary action will be taken if policies are breached.  Remind employees to drink responsibly and set out the arrangements for the function, including a finishing time.  Employee’s should be informed that after this time, they will need to leave the venue if they wish to continue partying.  They should also be reminded not to drive whilst under the influence of alcohol.
• Monitor and address behaviour – have senior employees oversee alcohol consumption and employee behaviour. Address unacceptable behaviour at the time and/or ensure complaints are handled in accordance with normal disciplinary procedures.

Lessons from the cases

To highlight the risks involved in not taking these practical steps, we have summarised two interesting cases, and the lessons learned from those cases:

The Dangers of Unlimited Alcohol at the Work Christmas Party

There are many risks associated with providing employees with unlimited alcohol at workplace functions.

In this case, the employer was found to have unfairly dismissed an employee despite the employee’s inappropriate conduct during and after a work Christmas party.  The employee had allegedly consumed two beers prior to arriving at the Christmas party, then 10 beers and vodka and coke at the party in a short period of time.   In considering the unfair dismissal application, the Commission focused on how alcohol was served to employees during the function.  The Commissioner summarised that:

“The Hotel set up a temporary bar facility in the Endeavour Room for the purpose of the LBAJV Christmas function. A number of tables were set up in a half-rectangle shape behind which Hotel Staff served the alcohol. Either one or two Hotel staff were serving alcohol for the duration of the Christmas function. Generally speaking a drink was able to be obtained by speaking to a person at the bar facility, who would then pour or hand over the drink. Bottled beer was contained in a “big Esky-type container” and appears to have initially been handed out upon request by the bar staff. However it was the evidence of Mr Keenan that, beyond a certain point, attendees at the function were able to help themselves to the bottled beer.”

The Commission also considered the conflict between the service of alcohol at the venue and the employer’s expectation surrounding compliance with standards of conduct.

“An exacerbating factor in that respect was the manner in which alcohol was served at the function. In my view, 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.”

The Commission was also critical of the fact that despite the employee’s clear state of intoxication, management failed to address the employee’s conduct or the responsible service and supply of alcohol.  During the Christmas party, the employee made several offensive and derogatory comments, as well as suggestive, unwarranted verbal and physical advances toward female employees.

Shortly after the Christmas party had ended, the employee continued to make inappropriate advances towards female employees in the Public Bar and at the taxi stand outside the hotel.

The employer investigated the employee’s conduct at the Christmas party which identified various incidents of misconduct: inappropriate behaviour and language; harassment (including sexual harassment); and bullying.

After a limited opportunity to respond to the allegations, the employee was terminated for his conduct at and after the function.

While the Commission stated that the employee could not “divest himself of responsibility for what occurred because of his state of intoxication”, the Commission also stated the fact that the “employer did not place anyone with managerial authority in charge of the conduct of the function” supported a conclusion that the dismissal was harsh.

In confirming that the employee’s dismissal was harsh and unjust the Commission considered the employees length of service and good record of employment.

Factors weighing against the employer were the lack of procedural fairness provided to the employee and the employer’s failure to explore other options besides termination.  The employee was provided an opportunity to respond to the allegations, however this occurred during the same meeting determining the employee’s termination.  Another factor was the disparity between the employer’s decision to terminate the employee for conduct at the Christmas party compared to the employer’s response to a Manager’s inappropriate comments made to a female employee during work time.

Critical to the employer’s failure to defend the unfair dismissal were the following issues:

• management failed to supervise and address conduct at the function;
• the conduct which occurred during the work function that could warrant termination was not provided as the reason for termination;
• the employee was not provided with an adequate opportunity to respond to the allegations;
• the employer did not consider the employee’s good employment record in deciding to terminate; and
• the employer was not consistent when addressing complaints involving employee standards of conduct.

Lessons learned:

Employer’s should:

• not allow unlimited free alcohol at work functions;
• make sure employees are informed in advance the standard of conduct that applies to workplace functions;
• deal immediately with behavioural concerns in the function;
• set clear boundaries for the start and finish of the work functions and
• seek advice before terminating employees to ensure there is valid reason to terminate, and to ensure that any other risks or considerations are assessed.

 The Benefit of Clear Directive Not to Drive

The New South Wales Supreme Court upheld the decision of the Deputy President of the New South Wales Workers’ Compensation Commission to eventually deny compensation to a worker who was injured when driving home from a work Christmas party.

The worker had arrived at the Christmas party at 7:00pm and left the party the following morning at 2:00am.  One hour later, at 3:00am the employee lost control of the work vehicle and collided with a rock wall and suffered serious and permanent disablement due to the injuries sustained. The employee tested a blood alcohol reading of 0.124.

The history of the litigation of this case is complex.  It was accepted that worker had disobeyed an order or direction given by her employer during the event not to drive in “her then present state”.   Despite this, the employee received weekly workers compensation benefits from the employer’s insurer for a number of years, until those benefits were eventually declined. The employee sought a review of the decision to decline her benefits and was successful in having that decision overturned. Out of that process, an appeal was commenced by the employer.  The appeal was on the basis that the injuries did not arise ‘in the course of her employment’ and that if the claim was a ‘journey claim’ compensation was not payable, because her injury was attributable to her serious and wilful misconduct.

The Deputy President of the Workers’ Compensation Commission, on hearing the appeal considered the following:

• in normal traffic, it took the appellant 30 minutes to travel from her employer’s office in the City to her home in Beecroft;
• the period between leaving the party at the bottom of King Street in the City and the accident on Epping Road (well short of Beecroft) was one hour;
• the appellant had a blood alcohol reading of 0.124 shortly after the accident; and
• she had been directed by her employer not to drive in her inebriated state.

The Deputy President determined that the worker had been driving home, however it could not be inferred that the worker was coming from a place of employment.  The employee then appealed that decision.

The New South Wales Supreme Court, in reviewing the Deputy President’s decision, did not find that the Deputy President had erred in law.  The court determined that the worker failed to establish that she was in the course of her employment during the one-hour lapse between leaving the party and the motor vehicle accident causing injury.

The employee’s claim, that the entitlement to use a company vehicle for private use as well as company use brought all her driving of the vehicle for ‘private purposes’ within the course of her employment, was rejected.  Rather, the focus remained on the worker’s deliberate disobedience.

Lessons from this case:

• Having clear workplace policies (and employment contracts) regarding the use of company vehicles can assist to limit employer exposure where employees drive company vehicles under the influence of drug and alcohol; and
• When arranging a work function, be sure to provide clear directions to staff about not driving whilst under the influence, and ideally, provide alternate means of transportation for your employees to use to get home.

Contact Aitken Legal for assistance

If you are considering organising a work Christmas party, please contact one of our experienced employment law specialists to review your workplace policies and provide strategic advice as to how to minimise the potential risks associated with your Christmas celebrations.