A note to employers from Scrooge Ltd

It’s that time of year again, when we all look forward to the much anticipated Christmas party. Christmas parties are generally regarded as moraleboosting events by employers, especially during times of recession and redundancies. However, Christmas parties are notorious breeding grounds for employment claims, ranging from claims of sexual harassment and constructive dismissal, through to liability for personal injury or for failing to prevent drink driving. Such claims can cost the employer thousands of pounds.

In this article, our Employment Team (also referred to by some as the Humbug Section) give advice on liability arising from all those Christmas parties.

Vicarious liability

Last year we gave you tips on holding an office party, so this year we are going to focus on where employers stand in relation to liability for things which happen at office functions.

In simple terms, employers are vicariously liable for the actions of an employee if those actions took place ‘during the course of employment’. In the UK, this phrase has been given a wide definition and includes not only events in the workplace but also gatherings with colleagues outside work. Indeed, the UK’s Code of Practice on Harassment expressly states that the scope for employers being found liable for sexual harassment ‘may also extend to work-related social events’. This is likely to be followed in Guernsey.

When the party stops

A salutary lesson can be learned from a case brought by Ms Livesy against her employer, Parker Merchanting Limited. Ms Livesy worked as a sales representative for the company, which sold protective clothing and equipment to the building trade. The depot manager began making sexist comments to Ms Livesy, which became cruder and more offensive as time went by. Matters came to a head at the company’s Christmas party, when the manager made various suggestive remarks to Ms Livesy and made unwanted physical advances which continued during their shared lift home. Not surprisingly, Ms Livesy filed a formal complaint before resigning and bringing a successful claim of constructive dismissal.

Importantly, it was held that there was no distinction between harassment which occurred at the Christmas party and the harassment on the way home from the party and that employer was liable for both incidents.

Party round the clock

We have focussed on parties and the festive season, but allow us to don our ‘Bah Humbug’ hats again, because case law doesn’t limit liability to such events. The broad definition of the phrase ‘during the course of employment’ has been held to include more informal gatherings such as after work drinks.

In another case, a detective constable (DC Stubbs) went to a pub where she met with other police officers, including her colleague, DC Walker. With an élan quite worthy of Casablanca, DC Walker pulled his stool up closer to DC Stubbs, flicked her hair and rearranged her collar. On another occasion, she attended a leaving party with her boyfriend. On her way to the ladies room, she passed close to DC Walker who was standing with other colleagues. He acknowledged her and said in a loud voice, “You look worth one. Maybe I shouldn't say that; it would be worth some money.”

DC Stubbs claimed that she felt humiliated and distressed by this conduct and the Tribunal agreed. It was held that DC Walker had committed acts of unlawful sex discrimination against DC Stubbs, that these acts were committed in the course of his employment and that his employer was therefore vicariously liable for these acts. Notably, the tribunal said that:

 “these incidents were connected to work and the workplace. They would not have happened but for the applicant's work. Work-related social functions are an extension of employment and we can see no reason to restrict the course of employment to purely what goes on in the workplace.”

Seasonal savings

Before all you employers rush to outlaw any festivities, there is one very important point to note. Under Guernsey’s sex discrimination legislation, there is a way to avoid liability. If you can prove that you took all reasonable steps to prevent harassment occurring, you are likely to have a defence to a claim for harassment.

So what does ‘all reasonable steps’ involve? In the context of the office party, steps include:

  • Sending an email detailing a code of the behaviour expected of employees
  • Reminding employees of the contents of the Equal Opportunities Policy
  • Putting down guidelines on “Secret Santa” gifts, to avoid more risqué presents causing offence.

Goodbye Mr Scrooge

Despite the potential pitfalls, many companies do have successful and enjoyable Christmas parties without any complaints. We hope yours is one of those!