The perils of the end of year Christmas function

Fri, 21 Jan 2011

With shopping centres starting to put up their Christmas decorations and the invitations to staff and client Christmas parties filling our in-trays, it's time for our annual warning to employers to take measures to prevent a "Christmas party gone wrong" scenario.

We all know the end of year parties are an opportunity for employees and clients to mingle and relax, however employers should be aware that inappropriate behaviour by their employees at a work event may not only reflect badly on the employer's reputation, but can leave them open to serious claims including sexual harassment.

Some of the risks facing employers as a result of poor behaviour at a Christmas function include:

Breach of employer health and safety obligations

An employer has an obligation under both NSW and Victorian Occupational Health and Safety laws to ensure the health, safety and welfare at work of employees and other persons at the workplace and other areas where it has control. A work function such as a Christmas party or end of financial year lunch, will be controlled by an employer and therefore the duty will extend to these work functions.

Unfair Dismissal

Often poor behaviour at a client or staff Christmas party results in disciplinary action or in some cases terminations. As a result employers may face unfair dismissal claims (including constructive dismissal) if the termination is not handled appropriately and in accordance with existing policies and current legislative requirements.

Sexual Harrassment

Every year, some employers are faced with a sexual harassment claim as a result of poor behaviour between staff or guests at a Christmas Party. These claims can be incredibly costly and damaging to your organisation.

So, given these risks, it's important to understand what sexual harassment is.

What is Sexual Harassment?

Sexual harassment is unwelcome conduct of a sexual nature which a reasonable person, in all the circumstances would be offended, humiliated or intimidated by. This conduct may be a one-off, or may be a series of incidents.

Common examples of sexual harassment include:

• unwelcome physical contact, such as hugging or kissing;
• leering/staring;
• suggestive comments or jokes;
• unwelcome inquiries about an employee's private life or body; and
• persistent and unwelcome invitations to go out or for sex.

However, mutual or consensual flirting and other conduct between colleagues is not sexual harassment.

In recent years there have been a number of prominent cases surrounding the work Christmas party, and the question of how much control an employer has over its employees' personal lives.

The case of Carlie Streeter v Telstra Corporation is a highly publicised case involving the dismissal of a worker from Telstra after she engaged in a naked romp in a hotel bath in the presence of fellow employees. Ultimately, the Australian Industrial Relations Commission ("AIRC"), on appeal, determined that the employee, Carlie Streeter, was not unfairly dismissed. However, at first instance the question of whether the party was a work function was an issue. The fact that the hotel room had been paid for by the employees privately (however the employees had paid using the Telstra discount) was part of the AIRC's determination.

Given the blurry distinction between work and personal lives, and the strife some employees get into when too much alcohol is consumed, it is a case of prevention being better than cure.

Different measures can be taken to reduce the risk of a legal claim and/or accident. The steps that can be taken to protect your business may differ depending on the circumstances of the event or the particular business.

Having in place a policy on sexual harassment and bullying is one measure together with adequate training and education on sexual harassment.

Responsible service of alcohol and ensuring sufficient food is available and the provision of transport home from the Christmas Party are some important things to consider.

Consideration should also be given to communication of a specific cut-off point at which point the work function officially ends and any festivities that occur after that time are clearly designated as not work related.

If you would like assistance in reducing risk at an upcoming function, please contact a partner at FCB.