In brief - Employers should consider risk of and take steps to avoid being held vicariously liable
We are currently in the midst of the workplace social function season. It is now well established that such occasions, even if held outside standard work hours and away from work premises, are sufficiently “connected” to the workplace such that any unlawful behaviour—for example, bullying, fighting or sexual harassment—engaged in by employees at those functions can be the subject of a workplace complaint or litigation.
Vicarious liability in workplace legislation
Most workplace legislation, for example, discrimination and sexual harassment laws, have provisions that allow the employer to be held “vicariously liable” for the conduct of its employees if the employer has not taken reasonable steps to prevent the unlawful behaviour from occurring. These laws usually extend coverage to work corporate events and even parties occurring after official events have ended.
Here are some infamous Christmas party litigation cases from the archives:
- An employee was dismissed after he urinated over the side of a balcony on to diners below at his employer’s Christmas party. Astonishingly, after he was dismissed for the behaviour he lodged a claim alleging his dismissal was unfair!
- An employee was dismissed for sexual acts in front of several other employees in a hotel room booked by a group of employees, after the end of a Christmas party organised by the employer.
- Four employees were prosecuted and fined by WorkSafe for breaches of occupational health and safety laws when an employee suffered severe burns at a Christmas party when another employee sprayed paint thinner onto his colleague’s bare torso, which then caught fire as a result of the flame from an already ignited spray can.
- An employee was injured by a propeller after being pushed off a boat by another employee at a Christmas party. The employer was found liable for the injury.
- A golf club was held liable for the conduct of its president who sexually harassed a female employee of the club at the end of year Christmas party.
Top 5 take away tips to mitigate legal risks
To ensure your end of year function does not result in workplace complaints and litigation, employers should consider taking the following measures when preparing for and managing end of year corporate functions and events in the workplace:
Ensure that the organisation has in place current policies on equal opportunity, sexual harassment, bullying and workplace health and safety. Issues at Christmas parties generally fall into one of these categories. Policies should be reviewed now for compliance with current judicial expectations, as defective policies will be no defence. The policies should form contractual terms referenced in employment contracts. Circulate and reinforce workplace policies, and the Code of Conduct if you have one, prior to the end of the year.
Ensure responsible service of alcohol. In McDaid v Future Engineering and Communication Pty Ltd  FWC 343, the Fair Work Commission (FWC) held that employers must “take steps” to ensure that they serve alcohol responsibly. As the FWC does not always assume adults can be responsible for themselves, employees and others present should not be allowed to become heavily intoxicated. Consider sending unruly employees home in a taxi before anti-social behaviours develop.
The corporate function should have a designated finish time taking into account the length of time employees have been present. Make sure no one who has been consuming alcohol has to drive home. Provide transport or cab vouchers.
Designate someone to monitor hazards. In Keenan v Leighton Boral Amey NSW Pty Ltd  FWC 3156, the FWC encouraged employers to appoint a manager to supervise the conduct of work events to avoid mishaps. Make sure the designated person is sober and is able to monitor and attend to occupational health and safety hazards at the Christmas party, such as wet floors, broken glass and loose electrical cables.
Remind all staff by email before the Christmas party of the standards of behaviour expected of staff at workplace functions and the disciplinary consequences of failing to meet those standards, as provided in relevant policies. Employees should understand that just because the work function may be outside of standard working hours and may be at a non-work venue, normal workplace standards of behaviour continue to apply.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2022.