An MD assaulted an employee at a drinking session after the Christmas party, and the employer was found by the High Court not to be vicariously liable.
Mr Major was the managing director of Northampton Recruitment Ltd. Mr Bellman was a sales manager employed by the company.
The staff Christmas party took place at a golf club. All employees plus their partners were invited, and 24 people attended. After the party ended, just over half the guests went onto a Hilton Hotel. This included 5 or 6 of the eleven staff. Most of them were staying at the hotel. This was not a pre-planned extension to the party. The expectation was that the company would pay for, or reimburse taxi fares and at least some of the drinks.
At first, the conversation was mainly social in nature. However, it turned to work matters and, in particular, discussion arose about the controversial recruitment of a new employee. Mr Major became annoyed, and stormed off. When they had regrouped, he began to lecture them on how he owned the company, that he was in charge and that he would do what he wanted to do; that the decisions were his to take, and that he paid their wages. The tone of the conversation deteriorated, with Mr Major swearing when discussing the recruitment of the new employee. Mr Bellman, in a non-aggressive manner, challenged what he had said, and Mr Major, swearing, said that he made the decisions in the company. He punched Mr Bellman, who fell down. Mr Bellman got up, bleeding, and pleaded with him not to "do this". Two employees tried to hold Mr Major back, but (as shown by CCTV coverage) Mr Major broke free, ran back over and hit Mr Bellman again, knocking him so that he fell straight back to the ground. As a result of this assault, Mr Bellman suffered permanent brain damage, and is unlikely to be able to work again.
An employer is vicariously liable for a tort committed by its employee if that employee was acting in the course or scope of his employment. Mr Bellman claimed that the company was vicariously liable for the assault by its MD. (Mr Bellman did not sue Mr Major because Mr Major did not have enough money to make it worthwhile.)
The judge set out the relevant principles in relation to assaults committed by employees:
An employer is not liable for an assault by his employee merely because it occurred during working hours. However, the employer is not free from liability because the assault occurred outside working hours.
Has the employer created a material risk of harm? It is not sufficient that the employer has merely provided the opportunity for the act in question.
What was the nature (looking at it broadly) of the employee's job? Was there sufficient connection between the employee's job and his wrongful conduct to make it right that the employer be held liable under the principle of social justice? This must also be looked at broadly, and the purpose and nature of the act as well as the context and circumstances should be taken into account.
The test is inevitably precise, and requires the court to make a fact specific evaluation, looking at the full circumstances of the employment and of the act committed.
Consideration of the time and place at which the relevant act occurred will always be relevant, but it may not be conclusive.
The policy of social justice must always be borne in mind.
Applying these principles, the judge found that the company was not vicariously liable for the assault of Mr Bellman.
Key to this decision was the fact that the assault was committed after and not during an organised work event. The judge considered that a line could be drawn under the Christmas event – after which some employees went home: there was a break in time as well as a change in location from the golf club where the party was held to the hotel where the incident took place. This was an "impromptu drink", and could not be seen as a seamless extension of the Christmas party. He characterised those who were left as "hotel guests, some being employees of the Defendant some not, having a very late drink with some visitors".
The judge did not consider that Mr Major's role as the directing mind and will of a small company meant that he was always on duty solely because he was in the company of employees.
The judge did not consider the fact that the assault took place in the context of a work discussion meant that it was necessarily done "in the course of employment", nor did he think that the provision of alcohol by the company meant that the employer had created a material risk of harm. The late night drinking was a "voluntary and personal" choice by those present to engage in heavy drinking.
What does this mean for employers?
This is a helpful decision for employers. However, it should be treated with a great deal of caution: it could easily have gone against the employer. Employers should not assume that they are free from liability for acts of their employees at "after parties". This case does not change the law, and (as the court emphasised) the test of vicarious liability is imprecise, and involves an evaluative judgement in each case.