As Christmas and the staff party season approaches, a recent case serves as a useful reminder to employers of their liabilities to staff.

Vicarious liability – “in the course of employment”

As an employer you are vicariously liable for an act committed by your staff “in the course of their employment” even if you had no knowledge of it happening. The line undoubtedly becomes blurred when incidents occur at social occasions such as the staff Christmas party, a colleague’s leaving party or corporate function which may be out of working hours and off the premises.

Whether a social gathering is an extension of employment will depend on the situation and a Court will take into account the employees’ positions within the company. In a recent case an employer was found liable for an incident that happened late at night after everyone had left the staff party.

The facts

Following the staff Christmas party a number of staff of a recruitment agency, including the MD and the sales manager, went on to a hotel where they had an impromptu drink. The company had paid for taxis to the hotel and some of the drinks consumed. Eventually an argument broke out on a work-related matter. The MD got angry and when the sales manager challenged him in a non-aggressive way the MD punched him. The sales manager was knocked to the floor and this resulted in a fractured skull and brain damage, making it unlikely that he will work again. The employee sued the company claiming it was vicariously liable for the MD’s actions.

The question was whether the after party was sufficiently connected to the staff event, or was it an entirely voluntary decision to engage in heavy late night drinking?

What did the Court look at?

In terms of the MD’s position, the Court decided that as a small company he had almost unrestricted authority.   He decided to speak at length on work issues late at night. When his managerial authority was questioned he reasserted his authority by attacking his sales manager. The Court decided that the punch arose out of a misuse of the position entrusted to him as managing director and it was therefore fair and just that the company should be held liable for his actions.

Practical pointers

This case was unusual in its facts and in another instance the after party may not have been seen as an extension of the company social event.  Such cases depend on their facts and the positions of the staff involved.  An employer will not be responsible for every drunken brawl that happens between staff out of hours. However, the test the Court applies is broad.

To avoid potential problems, employers should make staff aware of the standard of behaviour that is expected of them in a given situation.

Steps you can also take:
• Have a policy on Christmas parties and staff social events which  sets out clear expected standards of behaviour; is clear that any form of harassment, discrimination or victimisation will be unacceptable conduct; links to your disciplinary policy in case of breach;
• Appoint staff members to monitor behaviour and alcohol intake at staff parties to ensure the safety of all staff.  Consider how much free alcohol to provide.  If you provide a free bar all night then you may be condoning their behaviour.
• Take prompt disciplinary action against any employee who is in breach of your policy once back at work.

You may also like

In a similar vein you may also find this article useful: Sexual Harassment in the Workplace