Many workplaces enjoy functions where alcohol is served, but some recent decisions establish that if an employer permits the alcohol to flow freely, then it may have to wear the liability for any inappropriate behaviour its intoxicated employees get up to. If there is an accident, the employer may also be found to have breached its duty of care and be liable for damages. In such a situation, the employer's insurance policy may not apply. So it is now time to reassess how you manage your workplace functions, particularly if alcohol is involved.

Unfair dismissal

Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156 (26 June 2015)

The Fair Work Commission heard an unfair dismissal case involving an intoxicated male employee who sexually harassed other employees. The harassment included persistently asking an employee for her phone number, telling another she was a "Stuck up b****" and another "Who the f*** are you? What do you even do here?". The intoxicated employee also kissed another employee in an unsolicited and unprovoked manner. The Commission found that the worker's conduct was a result of his intoxication and that he was never refused a drink or prevented from accessing alcohol at the work Christmas party, despite his visible intoxication. The free-flowing access to alcohol at a function under the employer's control was a factor in the Commission finding that the employer's decision to terminate the worker's employment was harsh, unjust and unreasonable. It was said, "This was ultimately a result of the fact that [the employer] did not place anyone with managerial authority in charge of the conduct of the function, but essentially let it run itself".

Duty of care

Canny v Primepower Engineering Pty Ltd [2015] WADC 81 (3 July 2015)

The West Australian District Court found a Managing Director breached their duty of care by allowing workers to become intoxicated. Beer was provided at a party at the workplace. In behaviour described as skylarking, a number of workers decided that it would be fun to try to start and then seize an old engine. As an apprentice poured petrol into the engine's intake, the engine sparked and created a fireball. The apprentice was engulfed in flames, suffering serious burns to 60% of his body.

The apprentice sued the employer for damages claiming it was negligent. The employer denied liability, arguing it was not unsafe for workers to attempt to seize the engine. Rather it was the bringing of petrol onto the site and the unsafe use of it that was the difficulty, and the employer could not be held responsible for that. The employer also claimed indemnity from its insurer, which opposed indemnity on the basis that its insurance policy did not cover a reckless disregard for workers' safety. The judge was critical of the employer for breaching its duty of care by providing free-flowing alcohol at work. The judge went on to say:

"The activity should never have been allowed. To start and seize the engine was not a required task for the business. The workers should not be permitted to consume alcohol and nor should the supervisory staff. Adequate supervision was essential. The [managing directors] conduct was serious. It was more than negligence. The conduct does amount to deliberate flouting of the [insurance] policy."

Lessons for employers

So it seems clear that the days of an open, unrestricted bar at workplace functions may well be over. But what controls should you be looking at to manage these types of functions? Here are our top tips:

  1. Before the event, tell participants the event's start and finish times, and that anything beyond this timeframe is not endorsed by the company. Send a reminder about your appropriate workplace behaviour policies and the consequence of breaching them.
  2. Have someone assess the venue beforehand for any hazards and risks, including whether transport to and after the event is available so people can get home safely.
  3. Have an event supervisor to monitor behaviour and ideally deal with any potential issues before they arise.
  4. Set limits around bar tabs and responsible service of alcohol, and make sure some food is available.
  5. If the event is fancy dress, still consider appropriate dress guidelines for the workplace.

If there are any post-event complaints, don't ignore them. Rather, deal with them through your usual internal dispute resolution processes, just as you would other workplace-related concerns. Your events in the future may well be less eventful, but I dare say they might be more enjoyable for the majority of your people and your legal liability will be less.