The Christmas Party - An Employer's Liability
Author: Matthew Kilgannon
Background
Christmas parties can be a hot bed issues for business owners and HR. With Christmas parties in full swing, the High Court has recently delivered a decision that provides a timely reminder of the extent of your liability at such events.
The case of Bellman v Northampton Recruitment Ltd (NR) related to NR’s Christmas party in 2011. The Managing Director of NR, Mr John Major, assaulted his employee, Mr Bellman, by punching him twice and knocking him to the (marble) floor on which he hit his head and, as a result, suffered brain damage.
NR's Christmas party took place at the local golf club and was laid on for employees and partners. In total, 24 people attended. Not surprisingly, alcohol was consumed by many attending and the Christmas party proceeded without incident.
After the party, just over half of the guests went on to the Hilton hotel. NR, through its Managing Director, paid for taxis to the hotel and most, if not all, of the drinks.
At around 3am Mr Major assaulted Mr Bellman punching him twice and, ultimately, causing him brain damage. The question for the Court was whether the employer (NR) was liable for the acts of the Managing Director. If it found the Managing Director was acting in the course or scope of his employment then the company would be liable.
High Court Decision.
His Honour Judge Cotter QC found the following:
“…Mr Major was the managing director and clearly saw himself as in overall charge of all aspects of [NR’s] undertaking…… Certainly Mr Major was a director authorised to act on behalf of the company with a wide remit. Things were done "his way"….It is artificial to categorise the position as either a job with set hours or one whereby [NR] had control qua employee over Mr Major as regards his method of carrying out his work, as in effect he was not only the managing director but also the directing mind and will of this small company (which ran a round-the-clock driving operation, such that there was always an employee of [NR] on call). I suspect that for much of his week Mr Major was either directly working on company business or available for consultation or direction.”
“I also have no doubt that, as with many managers in the modern world, he viewed part of his job to be the motivation of employees. Part of motivation is reward and, apart from salary, many employees receive incidental benefits, such as a Christmas party at the company's expense. Mr Major was able to take decisions as to company expenditure and no doubt at his direction the Christmas party was arranged and paid for by [NR], as were the drinks (subject to a financial limit behind the bar), the hotel accommodation and the taxis to and from the venue. In my judgment Mr Major would have seen it as part of his job to oversee the smooth running of the Christmas party. He was not just an attendee.”
However, despite those observations, the Judge found that there was insufficient connection between the position in which Mr Major was employed and the assault to make the employer liable. The Judge explained that this was for three main reasons:
Firstly, “…it cannot be right that…Mr Major could always be considered to be on, or potentially on duty, solely because he was in the company of other employees regardless of circumstances.”
The assault was committed outside and not during an organised work social event. The organised event had ended and, with it, the judge found, did the company’s liability based on the facts of this case. The Judge found that a “…line could be drawn…” whereby the hotel drinks that followed was an “…impromptu drink…” that could not be seen as a seamless extension of the work Christmas party.
Secondly, the Judge held that much of the conversation at the hotel was about social topics, not work. While the conversation moved on to work issues just before the assault, the Judge found that if this was sufficient for liability to arise, it would mean that a company’s potential liability would be so wide as to be potentially uninsurable.
Thirdly, the hotel drinking session arose entirely because of voluntary and personal choices by those present who elected to engage in a heavy early hours drinking session. Even if the company paid (or was expected to pay) this was far removed from the increased risk of confrontation that such a drinking session brings.
Comment
With Christmas parties’ happening now, this is an important and timely reminder of the difficultly in determining when you could be liable, especially when alcohol is involved.
The High Court was clear that cases like this will always be fact-sensitive, but the clear line drawn between the office Christmas party and any subsequent “impromptu” drinks provides some helpful guidance for employers.
