What happens when things go wrong at the company Christmas party and what does vicarious liability have to do with it?
Vicarious liability is a legal principle that can result in an employer being liable for the wrongful acts of its employees. Every year this results in a number of companies finding themselves in hot water as a result of the infamous Christmas party.
Vicarious Liability can be far reaching and result in liability arising even if the action of an employee is at events which falls outside normal working hours and is away from the workplace.
When considering whether an employer is liable for wrongdoing committed by an employee, the court will consider the nature of the employee’s role and whether there is a sufficient connection between the role and the wrongful act. If the wrongdoing is “closely connected” to the individual’s employment, the employer could be held accountable for their employees’ actions.
In the context of a Christmas party, if an employer has hosted a party for its employees and there is an expectation or obligation on employees to attend, attendance at the event could be considered in the course of their employee’s employment. As such, any wrongful acts committed during the party could be result in liability arising for the employer.
The case of Bellman v Northampton Recruitment Limited, clearly shows how far reaching the legal doctrine can be.
Clive Bellman v Northampton Recruitment Limited 
Mr Bellman was employed as a sales manager for Northampton Recruitment Limited (‘NRL’). In 2011 Mr Bellman attended a work Christmas party at a golf club.
Following the party Mr Bellman and a number of his colleagues got a taxi back to a hotel where they were staying. NRL paid for the taxi to the hotel and the accommodation for a number of the employees at the hotel.
On arrival at the hotel Mr Bellman and a number of employees, including the NRL’s Managing Director (‘MD’) went for some drinks in the hotel lobby. At approximately 3am, after many hours of heavy drinking, Mr Bellman and NRL’s MD had an altercation surrounding a work-related issue. Following the disagreement, NRL’s MD punched Mr Bellman in the face which resulted in him falling and hitting his head on a marble floor. The actions of the MD resulted in Mr B suffering a fractured skull and brain damage.
Mr B sought damages against NRL for the conduct of the MD. In the first instance Mr Bellman was unsuccessful in his claim and NRL were held not to be vicariously liable for the actions of their MD.
Mr Bellman later successfully appealed the decision in the Court of Appeal. The court found that NRL were liable for the actions of the MD as the he had been “wearing his hat” as the company’s MD at the time of the assault.
The decision in Bellman was a damming verdict for employers as it confirmed how far-reaching vicarious liability can be and the extent of the liability they could face for the actions of the employees. It is worth noting in the judgement, the Court held that the liability came about as a result of the MD’s seniority in the Company, the circumstances and topic of conversation which led to the assault and the extent that alcohol, taxis and accommodation was purchased by the Company.
An employer can defend a such a claim if they can show that the actions of employee were not closely connected to the individual’s employment.
In the recent case of Chell v Tarmac Cement and Lime Limited  an employee planned to carry out a practical joke on his colleague using an exploding pellet which he had brought to work from home. The intention of the prank was to scare his colleague but unfortunately it resulted in permanent injury to the individuals ear drum. The injured party sought damages from the Company for the actions of perpetrator. The High Court dismissed Mr Chell’s claim on basis that the incident was not closely connected to the perpetrator’s employment, and he was acting on “a frolic of his own”.
Mr Chell has been granted permission to appeal the decision of the High Court in the Court of Appeal so the outcome of this case may change in the future.
The doctrine of vicarious liability does not only cover acts of negligence but also discrimination claims as set out under section 109 of the Equality Act 2010. Section 109 can allow for discrimination, victimisation, harassment and others similar claims to be pursued against the employer as a result of the acts on an employee.
In the context of a Christmas party, a company can be found liable for inappropriate comments made by one employee to another employee at the event outside usual working hours and away from their ordinary place of work.
An example of this can be seen in the case of Elworthy v Your-move.co.uk Limited.
Elworthy v Your-move.co.uk Limited
At a ‘boozy’ lunch, in the presence of other colleagues, a female manager of the respondent Company informed a male colleague that if he hit his sales targets, she would perform a sexual act on him.
The male colleague later issued a claim for direct sex discrimination against the respondent company.
When considering this claim, the Tribunal had to determine how closely connected the incident was to the perpetrators employment and whether the employer had taken all reasonable steps to prevent the employee doing the acts complained of.
Mr Elworthy succeeded in his claim and received an undisclosed award. The Tribunal held that the incident was closely connected to the individual’s employment and the steps taken by the Company to prevent the incident were limited. In the judgement the Tribunal found that the comments by the manager were “highly sexualised” which were linked to Mr Elworthy’s gender.
Tips for employers:
An employer can defend a claim brought against them if they can show they took all reasonable steps to prevent an employee doing the act complained of. Employers should therefore:
- Review appropriate policies - When deciding if an employer has taken all reasonable steps, amongst other things, the court will review the policies that a company has in place and the training employees have received. Employers should therefore ensure the appropriate policies are in place, that they are actively implemented and are fit for purpose.
- Employers should also look to carry out equality, inclusion and diversity training to ensure employees are aware of what should not be said.
- Remind staff - Ahead of a Christmas party, employers are encouraged to contact all staff and remind them of standard of behaviour expected from them at the party and that there will be a zero tolerance to any misconduct at the event.
- Assess risk - Employers should look to risk assess any events they host and put in place measures to limit any identified risk.
- Stay alert – Members of management could be assigned to remain sober to keep an eye on proceedings and the actions of the workforce. By having an individual assigned, even if they fail to spot a specific incident, it can reduce the likelihood of liability arising as it shows the company took all reasonable steps to avoid the incident.
It is impossible for an employer to avoid vicarious liability but through actioning the above, the risk of liability can be reduced considerably.
If you need further advice, call us on 01827 317070.