The Pitfalls of Christmas Parties for Employers: Vicarious Liability

It’s that time of the year again when companies face the headache of planning for their annual staff Christmas parties.

Christmas parties are not just a minefield for HR, but potentially could mean claims against the company due to vicarious liability for the conduct of their staff.

What is Vicarious Liability?

It is well established that where a wrongdoer is an employee (or in a relationship akin to employment) and the wrongdoing complained of is closely connected to their role, then an employer can be liable in law for that wrongdoing.

This can be regardless of the fact that the wrongdoing is not endorsed by the company and in breach of the employee’s contract; social policy has dictated and developed this area of non-fault based liability.

The Criteria for Vicarious Liability

This was established in the case of Various Claimants v Catholic Child Welfare Society & Ors (2012) when the Supreme Court set out the following criteria for consideration in order to establish vicarious liability:

1. The relationship between the wrongdoer and the company
2. The close connection between the nature of employment and the wrongdoing

The reasons provided as to why an employer should be liable for their employees’ acts or omissions were:

a) The employer is more like to have the means to compensation the victim as they are likely to have insurance

b) The wrongdoing will have been committed as a result of the activity being taken by the employee on behalf of the employer

c) The employer, by employing the employee to conduct carry out the activity, will have created the risk of the wrongdoing being committed

d) The employee will (to a greater or lesser degree) have been under the control of the employer

The above principles were reinforced in the more recent cases of Cox v Ministry of Justice (2016) and Mohamud v Morrisons (2016).

In the context of Christmas Parties

In recent years the courts have pushed the boundaries of vicarious liability, but you may think that Christmas parties are surely outside such a remit given the social context that they take place in.

The cases below illustrate when employers may or may not fall foul of the action of their employees

Clive Bellman v Northampton Recruitment Limited (2018)

The Court of Appeal found that a company was vicariously liable for an assault committed by its managing director despite the fact that this happened at an after party at a hotel after the main Christmas party at a golf club had concluded and was a result of an argument which had broken out when the managing director started lecturing its employees.

It was held that the managing director was asserting his authority and was entitled to issue instructions to more junior employees in his role, therefore there was a close enough connection between the assault and filed of activities entrusted by the employer to its employee (the managing director).

Shelbourne v Cancer Research UK (2019)

This is not an unusual scenario – an employee was picked up on the dance floor (by another intoxicated employee) and then sustained a back injury when she was dropped by the other employee who lost his balance.

The High Court held in this instance that the employer was not required to take extra measures (such as written declarations by participants that they would not behave inappropriately, drafting a risk assessment of all eventualities from inappropriate behaviour, staff training etc) in the exercise of their duty of care towards the Claimant as the event was intended for adults only, on a voluntary basis. The person who dropped the Claimant was in fact a vising scientist and so it was also held that his presence at the party had nothing to do with the work he was undertaking for the company. It was held that he was on a ‘frolick’ of his own, having picked up other women in similar fashion without them sustaining any injury.

A Word of Warning

Obviously an employer does not want to police a Christmas party to the extent that it defeats the purpose of allowing their employees to be rewarded with a social occasion of fun and festivity.

But certainly it should consider advice and training for more senior members of staff who are considered the face of the company and what they should and should not be doing at such events, given the serious implications this can have on the company, who will be the one to pick up the price.