There might always be some grey areas in employers' vicarious liability for end-of-year function misbehaviour, but a recent case provides very clear warnings on what does not constitute acceptable management at these events, a lawyer says.
"It's the end of the year, tensions are high, people are stressed, you put alcohol in the mix and it is a very dangerous time for employers," Karl Rozenbergs, partner at Hall & Wilcox”
Rozenbergs highlights the recent Keenan v Leighton Boral Amey Joint Venture (LBAJV) case, as a warning employers should put themselves in the best position "to prevent things from happening".
At the Christmas function, the team leader told a company director to, "f-ck off", and asked a colleague, "who the f-ck are you?". After the party ended, he attended a public bar adjoining the function space, where he harassed a number of female colleagues. LBAJV later dismissed him as a result of his conduct, but the Fair Work Commission found the termination was unfair.
"[LBAJV] just let him drink and drink and drink. The commissioner said, you've sacked him because you've let him drink, and you haven't got those safeguards in place. That gives an element of harshness to the termination of his employment," Rozenbergs notes.
"[LBAJV] didn't have anyone there monitoring and policing it, that was seen as a negative by the commission."
The commission also looked at the sexual harassment incident that happened after the event had finished. Rozenbergs explains that for an employer to be vicariously liable, sexual harassment occurring between fellow employees has to be sufficiently connected with the employment.
"Further, conduct that occurs after a Christmas function will only warrant termination of an employee if, as per Rose v Telstra, the conduct is likely to cause serious damage to an employment relationship or the employer's interests, or is otherwise incompatible with the employee's duties as an employee."
But in the Keenan case, the FWC ultimately found the team leader's harassing behaviour was not connected with his employment, as it occurred in a public venue that he and the other employees had voluntarily attended once the Christmas function had ended, he adds.
In essence, a work function may be considered a 'workplace', but only within the time boundaries (the official start and end times) and the physical boundaries of that function (event space booked), Rozenbergs says.
"[Vice President Hatcher] was pretty keen that the private time doesn't extend to everything that happens just because you've got a Christmas party. You draw a line."
Best practice risk management
Rozenbergs firmly advises employers to set clear times when holding a function, send emails before the event to remind employees of their obligations, and ensure employees are trained in the organisation's policies.
"Have a designated person at the function who is responsible or in charge of monitoring behaviour ensuring the responsible service of alcohol.
"The next part is to be careful about organising parties after the function. For the employer, you don't want that connection to continue because people will be drunker and the chances of [incidents] happening are higher.
"If it was an organised after party function by the employer, it would be harder for the employer to say, 'that wasn't part of the employment'."
If something does happen, Rozenbergs says, the first step is to start investigating: call everyone in, work out what the actual complaint is, speak to the relevant people, and then try and elicit a list of allegations.
"Properly formulate those allegations, put those to the employee or perpetrator, and then allow them procedural fairness to go through those."
In the past, employers typically found out something had gone wrong via phone calls, complaints and internal gossip, Rozenbergs explains, but more recently they're likely to be alerted via social media, and that's a "grey area people have to be careful about".
"There's things that happen in terms of Facebook where people post photos. That's a really scary thing because you could be at an after-function event which isn't connected with employment, and say your boss, who's fallen over, you get him or her in a photo in a compromising position and posted that on Facebook.
"When you come back to work and it's still on Facebook – so it's on work time – you're [considered] to damage that relationship," he warns.
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