Every year when the leaves turn brown and the first snow starts to fall, companies are frantically planning their Christmas parties. Ideally, such festivities improve the company climate, foster communication among colleagues and offer an ideal opportunity for a joyous farewell to the old year. In reality, however, even an innocuous event such as a Christmas party can cause legal disputes.

Organisation and participation

There is no general obligation of the employer to organise a company Christmas party. This might be the case as an exception where the company Christmas party has become an established company practice. This could apply particularly where the employer has always organised a Christmas party in the past and has thus caused the employees to believe that there will also be Christmas parties in the future.

Employees are generally free to decide whether to attend the Christmas party. Plainly speaking: If the Christmas party takes place outside working hours, each employee decides for herself/himself whether they wish to attend. This does not apply if the Christmas party takes place during working hours. If this is the case, non-attending employees cannot simply go home but must work their usual hours or use their overtime account or holiday entitlement to go home.

Presents

Where the employer generously assumes the role of Father Christmas, disputes also often erupt with respect to the presents. With regard to presents from the employer to the staff, it must be kept in mind that these can also establish a company practice.

It is admissible for the employer to hand out valuable electronic entertainment devices exclusively to those employees present at the respective party. A non-attending employee’s legal action for a “subsequent handing over of presents” was dismissed by Cologne Labour Court (decision of 09 October 2013 – 3 Ca 1819/13). Employers are thus without a doubt entitled to reward employees for attending the Christmas party – arbitrarily handing out presents to a selection of individual employees, on the other hand, is likely to be problematic due to the employment law principle of equal treatment.

Employers should always use common sense when it comes to presents: For example, gifting gold coins to employees on the occasion of a company Christmas party is to be regarded as a taxable salary component according to the German Federal Finance Court (decision of 07 November 2006 - VI R 58/04). In addition to tax and social insurance problems, this may also cause trouble with the works council: Although the employer is free to decide whether to hand out presents without involving the works council, the works council’s right of co-determination might well apply to the specifics of such benefits pursuant to Sec. 87 of the German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG).

Conduct-related grounds for dismissal

Company Christmas parties commonly involve a significant consumption of alcoholic beverages. The later the hour, the higher the risk of (mis-)conduct which might give reason for a dismissal, as alcohol lowers inhibitions and shortens the fuse. This might find its manifestation in a wide range of behaviours: insults, physical attacks and even sexual harassment.

For example, a dismissal with immediate effect was justified in a case where an employee grossly insulted his superior at the Christmas party and then tried to blame this behaviour on a blackout (Hamm Regional Labour Court, decision of 30 June 2004 – 18 Sa 836/04). The same applied to an employee who punched a random colleague in the face without warning as he was angry about negative feedback regarding his drunk singing on stage (Osnabrück Labour Court, decision of 19 August 2009 – 4 BV 13/08).

But even without alcohol, the events around a company Christmas party can seriously jeopardise the employment relationship. For example, a branch manager who applied for a Christmas party allowance from the company, submitting a list of attendants signed by the employees, avoided a dismissal by the skin of his teeth; it was nevertheless agreed with the employees that the Christmas party would ultimately not take place for organisational reasons (Hamm Regional Labour Court, decision of 14 January 2010 – 8 Sa 1182/09).

Insurance cover

Where serious breaches of duty occur due to a – sometimes excessive – use of alcohol, accidents are also likely to happen. Therefore, those who enjoy insurance cover at least have a quantum of luck in their misfortune. Statutory accident insurance cover applies where the accident is classed as an on-the-job accident.

Accident insurance cover generally only applies in case of company Christmas parties. “Rogue” Christmas parties, i.e. parties organised by the employees themselves, are only covered by the statutory accident insurance if they are initiated by the company management itself or by a person authorised or instructed to do so by the company management (Federal Social Court, decision of 26 June 2014 – B 2 U 7/13 R).

However, it is not necessary for a company Christmas party that the company management personally attends the party (Federal Social Court, decision of 05 July 2016 – B 2 U 19/14 R). However, night life enthusiasts and party people should bear in mind that the insurance cover generally ceases to apply when it is clearly apparent and comprehensible that the company Christmas party is over. This may for example be the case if all other colleagues have left the party hours ago (Hesse Regional Social Court, decision of 26 February 2008 – L 3 U 71/06).