More than ever, employers are dealing with issues arising from workplace conduct, including discrimination, harassment, sexual harassment and bullying.  As the Christmas season looms, this franchisors should be aware of their obligations as employers but also be pro-active in ensuring their franchisees are putting processes in place to prevent any brand-damaging a worrying trend for franchisors, who typically have difficulty in overseeing the daily conduct of their franchisees’ employees.

Under State and Federal anti-discrimination legislation, employers can be vicariously liable for employee behaviour which constitutes harassment, sexual harassment or discrimination and which is committed ‘in the course of employment.’  In almost all cases, conduct that is ‘in the course of employment’ will include employee behaviour at employer-sponsored events, like Christmas parties. 

For franchises, inappropriate behaviour at Christmas parties can be particularly damaging because it affects not only the individual employees and franchisees involved, but also has flow-on consequences for the franchisor and the reputation of its brand.

However the good news is that generally speaking, an employer will not be liable under State and Federal anti-discrimination legislation for the actions of its employees where it can show that it took ‘reasonable steps’ to prevent the discrimination, harassment or sexual harassment from occurring. 

Therefore to reduce the risk of claims being brought against franchisees, and to ensure the wellbeing of all employees, franchisors should ensure that their franchisees have taken appropriate steps to ensure that inappropriate behaviour at work parties doesn’t occur. 

For example, this could include:

  • reminding franchisees and their employees of their obligations under discrimination, harassment and sexual harassment legislation and policies, and also that these obligations exist at staff Christmas parties or other employer-funded events;
  • ensuring that franchisees and their employees are adequately trained in these policies (including by undertaking ‘refresher’ courses if required); and
  • at work parties, ensuring that there are limits on supplied alcohol and that alcohol is served responsibly.