Employment Solicitor Liz Whitehead explains why staff Christmas parties can be an extremely expensive gesture of goodwill by the unwary employer…

The Christmas season is upon us once more and many employers will be arranging functions as a thank you to staff. Whilst such parties should be relaxed and fun for the staff, care needs to be taken to make sure that the Christmas spirit and any associated frolics do not land the employer with a far larger bill than the bar tab.

Employers will obviously be liable for their own misconduct, but few realise that they can also find themselves equally liable for the misconduct of staff – even at functions away from the office. Responsibility for employees’ discriminatory comments, acts of violence or harassment at Christmas functions can easily land at the employer’s door.

From drunken brawls to offensive jokes and an unwelcome kiss under the mistletoe, Employment Tribunal panels are not afraid of finding such acts took place “in the course of employment”, therefore exposing the employer to liability. If there is a sufficient connection to work, the fact that the incident happened away from the office or was outside working hours is no defence.

Although this does not mean all Christmas parties should be cancelled immediately, it is important for employers to be able to demonstrate they have taken steps to make staff aware that such conduct at Christmas parties will not be tolerated. Employees should be informed that the company’s disciplinary rules still apply during the party, and that bad behaviour reflects upon the company’s image. A clear policy on equal opportunities and discrimination should be in place, outlining those types of behaviour may lead to dismissal.

If an employee does overstep the mark at a Christmas function, the employer needs to take care to follow the correct procedures. Failure to do so could render what would have been a perfectly reasonable disciplinary sanction unfair. The employer could then find that he is liable to the guilty employee as well as any innocent victim of the misconduct. An investigatory hearing as the first step in the disciplinary process may be appropriate on their return to work. The employer needs to handle the problem sensitively and fairly, but “firmly”.

Given that angelic employees cannot be guaranteed employers should be reviewing their policies and contracts of employment to provide as much protection as reasonably possible. Legal advice should be taken where a difficult or sensitive situation has arisen before the employer takes disciplinary action. With awards potentially running into ten of thousands of pounds, employers could otherwise face an unwelcome additional Christmas expense!