The Nightmare before Christmas

Seasons greetings!

We are at a point in the year where, after the last push to meet end-of-year deadlines/targets and complete the last billing/invoicing cycle, workers can breathe a sigh of relief before it all starts again next year.

In the interim, most workers shall be revelling at the annual workplace Christmas party yet, for management and their HR teams, it is a time to keep litigation radars active. While work socials are a terrific opportunity for teams to celebrate, they can also be a breeding ground for misconduct claims particularly since it was not so long ago when we were all contemplating whether partying would ever return after the pandemic.

Employers ought to, therefore, take the time and do all that they reasonable can to reduce the risk of acts of misconduct arising (especially at work socials which are booze-fuelled) lest they find themselves being sued for vicariously liability for the conduct of their employee(s).

What is vicarious liability?   

It is the test that determines the degree of responsibility an employer may have as regards the actions of their employees in the course of their employment. In establishing liability, a Tribunal will ask itself:

1. Is there a relationship of employment (or akin to employment) between the Respondent employer and the person who committed the wrongdoing; and
2. How closely connected was the wrongdoing to the acts that the wrongdoer was authorised to do.

If the two-stage test is satisfied, then it is likely that an employer will be found vicariously liable unless it can show that it took all reasonable steps to prevent the wrongdoing from occurring. Let’s consider the following case:

Bellman v Northampton Recruitment Limited 

Mr Major, the managing director of the Respondent, arranged an after-party at a nearby hotel once the Christmas party ended. At the hotel, everyone engaged in a heavy drinking session which led to some criticising Mr Major’s managerial style. Aggravated, Mr Major took the opportunity to lecture his subordinates as to his rights as a manager and, when Mr Bellman, wasn’t getting the message, Mr Major punched him, twice, causing serious brain damage.

The Respondent did not arrange the after-party and those in attendance were there voluntarily. The only involvement it did have was paying for everyone’s taxi fares and a few drinks at the hotel bar.

Based on the above, do you think the vicarious liability test has been satisfied?

If you said no, then you’re probably of the same mindset as the High Court which was that the incident occurred due to the ‘entirely voluntary and personal choices’ of those engaging in a heavy drinking session. However, the Court of Appeal interpreted these events very differently.

It noted that, at the point that Mr Major decided to lecture his subordinates on his rights as managing director he, in that moment, “…chose to wear his metaphorical managing directors’ hat”. After which the assault on the Claimant followed.

In deciding whether the Respondent was vicariously liable for Mr Major’s actions, the Court of Appeal took into account all the relevant factors including Mr Major’s seniority, his field of activities, and his authority over junior employees.

In attacking the Claimant, the Court found that Mr Major misused his position as managing director to teach the Claimant a lesson. As such, there was sufficiently close connection to the employment relationship for the Respondent to be held vicariously liable for Mr Major’s actions.

Managing Misconduct

Understanding the doctrine of vicarious liability is important as it can be applicable to a myriad of situations that might cause misconduct to arise. The UK has a prominent drinking culture but not everyone subscribes to this, and some may not partake due to lifestyle choices and/or religious beliefs. Employers need to think carefully about how each of their employees are treated and, ultimately, protected.

Discrimination 

Discrimination arises in two forms: direct and indirect.

The former arises where a person is treated less favourably precisely because they possess a protected characteristic. The latter comes about if an employer’s policy, criterion, or practice disadvantages a group of people who have certain protected characteristics when compared to their comparators who do not share the same characteristics. Consider the following cases:

Nixon v Ross Coates Solicitors & Another

After the Respondent’s Christmas party, the Claimant was seen kissing one of her male colleagues and both went to a hotel. Soon after, the Claimant revealed she was pregnant opening the floodgates for gossip. Being at the centre of it all, the Claimant suffered considerably and was signed off sick. The Claimant then raised a grievance in respect of this, yet the Respondent refused to investigate it and to pay her sick pay. Consequently, the Claimant brought a discrimination claim on the grounds of pregnancy and sex. The case eventually came before the Employment Appeal Tribunal which, despite commenting that her actions gave rise to the gossip in the first place, found in her favour.

McClellan v Dow Jones

The Claimant, a middle-aged accounts manager, was forced to dress up as Santa Claus by his female manager for the Respondent’s Christmas party. She regarded him as an “old buffer” who would be a perfect fit as Santa Claus. The Claimant felt he had been discriminated against due to his age and sex. He brought a claim for discrimination and, perhaps unsurprisingly, the Employment Tribunal upheld his claim and awarded a substantial amount of compensation.

Harassment

It is well-established that employers must take all reasonable steps to prevent misconduct from happening in order to avoid liability and, while they cannot control the actions of their employees, they can take steps to ensure that the risk of acts of misconduct is limited.

In Lyons v Starplan, the Claimant was invited to the Respondent’s Christmas party and then to a nearby restaurant. It was there that one of her male colleagues made a comment about her breasts and then proceeded to hug her from behind without her consent. The Claimant brought a claim for sexual harassment and was awarded £19,000 in compensation.

Unfortunately, the above case is a common occurrence but not all harassment cases are so overt. In fact, giving a secret Santa gift may constitute harassment if the gift is regarded as unwanted conduct related to a protected characteristic which has the purpose or effect of violating the recipient’s dignity, or creates an intimidating, hostile, degrading, humiliating or offensive environment for them.

As explored in further detail here, by 26 October 2024 the Workers’ Protection Act 2023 will come into force and create significant changes to how employers go about upholding their duty of care. It will put the onus on the employer to take much more active steps to try to prevent situations happening in the first place.  It is vitally important to prepare for this as getting this wrong may be disastrous for your company.

How can employers reduce the risk of liability?

As you prepare for the upcoming festivities, or any other work-related social event, we set out below a non-exhaustive list of recommendations for you to consider:

• Conduct risk assessments of your chosen venue. In Shelbourne v Cancer Research UK, the High Court held that the Respondent was not vicariously liable for the injuries that the Claimant suffered as it had carried out a full risk assessment which identified that alcohol would be consumed at the party. They made a provision to restrict access to the laboratories by those who may have consumed alcohol and therefore had done all they reasonably could.
• Be as inclusive as possible: Ensure that you accommodate all religious, cultural, and dietary requirements. Do not assume, as this manager did in the case Amal Abdi v Odeon Cinemas, that because an employee is Muslim they should not be invited to the Christmas party due to alcohol being consumed.  It is of course possible to enjoy oneself without alcohol.
• Manage employees’ expectations: clearly state what the event is; between what times it will take place; and how staff are expected to conduct themselves. If there is alcohol, remind employees to limit consumption and act responsibly.
• Arrange safe and timely transport: you still have a duty of care and you need to ensure that staff can leave the event and get home safely. If the event is expected to finish late, remind staff to arrange the journey home in advance or provide an allowance to enable staff to expense a taxi.
• Keep conversation light: In addition to avoiding discussion of an offensive nature, also steer clear from discussing confidential and/or sensitive work-related matters such as promotions or company financials. In Judge v Crown Leisure Limited, the Employment Appeal Tribunal held that the Respondent had been “lucky” to escape liability after an employee was told by his manager at the Christmas party that he would receive a higher rate of pay within two years. The promise was not kept and the employee resigned. The Tribunal found that, given the context in which this statement arose, it could not be said that it was intended to create a legally binding agreement. This was coupled with the fact that the Claimant had received increases to his salary during this two year period, the Respondent avoided liability.
• Take action: if you identify a problem; step in and try to resolve it immediately.  This may prevent the problem escalating. Do not be surprised if you receive a grievance reporting misconduct following such an event and, if you do, ensure that it is investigated thoroughly and in line with your grievance and disciplinary policies.

Of course, please do get in touch if you need assistance on this subject, SMB’s employment team is more than happy to assist.