While staff are getting excited about the company’s upcoming annual event, employers and employees may find it sobering to hear of a couple of recent cases in the UK and Australia where the holiday party did not turn out so well. In the UK, at issue was whether an employer was liable for injury to an employee by a manager. In Australia, it was whether an employee’s termination due to behavior at a party was lawful.

United Kingdom. In the English case, Bellman v. Northampton Recruitment, the Court of Appeal held that Northampton Recruitment was vicariously liable for the action of the company’s managing director, John Major, at the office Christmas party in 2011.

Vicarious liability refers to a situation where an employer can be liable for the acts or omissions of its employees, provided they took place in the course of their employment.

Following Northampton Recruitment’s Christmas party at a golf club, Major, who was also a director and shareholder of Northampton Recruitment, paid for taxis for all those who wanted to go to a nearby hotel where he was staying. Later, after further unplanned drinks paid for by Northampton Recruitment, Major started lecturing those employees who were still drinking in the hotel as to his authority over company decisions. When challenged by Clive Bellman, a sales manager, over the recent appointment of another employee who was not present, Major punched Bellman, who fell and hit his head on the ground, suffering traumatic brain damage causing significant ongoing impairment to his speech and language.

At first instance, the judge concluded that the assault was committed at an impromptu gathering and not a seamless extension of the Christmas party. In his judgment, there must be a limit to a discussion about work-related issues and account must be taken of the time and place at which the discussion takes place. The consumption of alcohol at the hotel was “in the context of entirely voluntary and personal choices,” and any increased risk of confrontation arising from the additional alcohol at the hotel, even though it was paid for by Northampton Recruitment could not properly support a finding of vicarious liability as the circumstances were so far removed from employment.

The plaintiff appealed the judgement on grounds that the judge failed to take account of the nature of Major’s job as managing director and the power and authority entrusted to him over subordinate employees. The fact that the wrongful conduct was triggered by a challenge to his managerial authority; and that the risk of the wrongful conduct was enhanced by Northampton Recruitment’s provision of alcohol were significant factors. It was argued the judge had also wrongly concluded that the imposition of vicarious liability for conduct in such circumstances would be potentially uninsurable and would place an undue burden on an employer.

The Court of Appeal overturned the judge’s decision, observing that the lecture which preceded the fight was concerned with the nature and extent of Major’s authority in relation to Northampton Recruitment’s business and the exercise of that authority over his fellow employees. “He chose to wear his metaphorical managing director’s hat and to deliver a lecture to his subordinates. He was purporting to use his position and drove home his managerial authority, with which he had been entrusted, with the use of blows” in the words of Lady Justice Asplin.

On the issue of whether there was a sufficient connection between Major’s employment and the assault, the Court of Appeal held that the drinking session had to be seen in the context of the evening’s events. It was not just an impromptu drinks party between work colleagues, which might happen on any night of the week after work. The drinks occurred on the same evening as the work event which had been paid for and orchestrated by Major on behalf of Northampton Recruitment. Major was present as managing director of Northampton Recruitment, a relatively small company, and misused that position, after a lengthy discussion on business matters before his managerial decision-making was challenged. Despite the time and place at which the assault occurred, Major’s position of seniority persisted and was a significant factor.

The lesson to be learned from this case is that misuse of authority in the context of employment can occur out of hours or when the parties are off-duty, particularly by someone in a senior position.

Australia. In the Australian case, decided in the employer’s favor, the Fair Work Commission found that ALDI supermarket chain had been justified in dismissing an employee for throwing a full glass of beer over the heads of other employees at the work Christmas function.

In November 2017, ALDI held a Christmas party at a hotel for its warehouse operations staff based at the distribution center in Dandenong, Victoria, Australia. Sione Vai, a warehouse operator, became agitated during the function when he was refused service by the hotel bar staff. Several section leaders employed by ALDI attempted to calm him down. However, Vai subsequently threw a glass of beer in the direction of the security guards, which went over the heads of his colleagues and smashed against a wall. Vai was dismissed for serious misconduct because he threw the glass after having been spoken to by ALDI’s section leaders and “as per company policy, provocation is not accepted as an excuse for physical violence.”

Vai brought an unfair dismissal application to the FWC on grounds that he had no memory of the incident; he had been provoked by the bar staff who had directed a racial slur towards him; the party had not been an official work function because there had been no ALDI management present; and his dismissal had been disproportionate to his alleged misconduct.

Vai also argued that ALDI must take some responsibility for the alleged misconduct given that it had occurred while he had been intoxicated at an event where ALDI had supplied the food and drink and there had been no instructions or directions in advance of the function about the standards of behavior that would be considered appropriate. He submitted that ALDI had failed to demonstrate how he had breached his employment contract as there was no evidence of any serious damage being caused to the employment relationship or ALDI’s interests.

However, the Fair Work Commission found that the function had been within the scope of ALDI’s legitimate supervision and it had taken reasonable steps to ensure that the behavior of those attending would not get out of hand. The commissioner also said that any employee attending has a responsibility to act within reasonable bounds and that Vai could not be considered to have acted in this way.

Vai’s behavior was significant and serious given the potential to cause significant harm by his actions, even though the glass had not hit anyone, and the fact that the bar had been closed shortly after the incident and the party brought to an end. The commissioner held that ALDI’s issuance of a warning in these circumstances would not have been appropriate given the risk of harm, and the fact no one had been hurt did not lessen the potential significance of what had occurred.

This case, albeit concluded in the employer’s favor, underscored the responsibility of employers to ensure that appropriate standards of behavior are maintained at work functions, particularly those where alcohol is present. This obligation may be met by having a behavior policy and issuing gentle reminders to employees prior to the event. Alternatively, it may be appropriate to have managers or security personnel observing behavior, depending on the size or nature of the event, or placing restrictions on alcohol. In any case, it is also a salutary reminder — if one were needed — to employees that they also have a duty to act responsibly.