Christmas Party Etiquette: A Guide for Employers and Employees

It’s that time of year again and we have put together a general survival guide for both the employer and employees tackling some of the most common questions received by employment lawyers in the lead up to the festive season!

Do employers and employees have any obligations at work-related functions?

Yes, the case law in this area is very clear and sets out that when it comes to conduct at work-related functions:

• Employers have a duty to:

1. ensure employees are aware of its policies with respect to work-related functions;
2. inform employees whether certain functions are considered by the employer to be work-related;
3. ensure they provides a safe and controlled environment where there is consumption of alcohol; 
4. inform the employee of the process taken where an investigation of their conduct is required;
5. provide reasons to an employee where disciplinary action is taken; and
6. allow the employee to respond to the allegations of an investigation.

• Employees: 

1. owe a fiduciary duty to act in the best interest of their employer when participating in activities which might cause risk to the employer’s business; 
2. must not engage in actions which amount to a breach of the employer’s policies; 
3. must not engage in conduct as to indicate a rejection or repudiation of the employment contract; and
4. where an investigation of an event is undertaken by the employer, must cooperate fully with the investigations.

Is a Christmas party a work-related function?

Yes, a Christmas party has been determined by the Fair Work Commission (Commission), to be a work-related function attracting responsibilities on both the employer and employee.

In Drake & Bird v BHP Coal Pty Ltd [2019] FWC 7444, the Commission upheld the sacking of a BHP mineworker who was dismissed after an internal investigation found he and another BHP employee engaged in a verbal and physical altercation with a supervisor at a company Christmas party. Both of the employees asserted that at the time they attended the event they were not aware that it was a work-related function and believed it was a regular social event arranged between employees working a particular shift roster.

Despite the employees’ contention that they didn’t know it was a work event, DP Asbury said that even if the Christmas party was not found to be a work event, the event involved a group of employees of the Company and was therefore sufficiently work related. 

If an employer is supplying alcohol at the Christmas party, is the employer liable for their actions when they are under the influence of alcohol? 

The employer has an obligation to ensure the responsible consumption of alcohol at the function. However, the employee also has an obligation to ensure they drink responsibly.

In the case of McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343, the Commission ruled in favour of the employer who terminated an employee, where the employee had engaged in unacceptable behaviour and misconduct at the staff Christmas party. The Commission considered whether the employer was liable in supplying unlimited alcohol and held that in circumstances, where an employer provides alcohol at a work function and takes “no steps to ensure it is consumed responsibly” the employer “may be responsible for any events attributable to employee intoxication. However, it also found that employees who consumed alcohol were also responsible for their actions as a result of the consumption. The Commission, in this case did not accept the employee’s inebriation as an excuse for his conduct, stating that “society no longer readily accepts” alcohol as an excuse for bad behaviour.”

If a Christmas party is a work-related event that is considered to be taking place during work hours, is an employee still liable to act in their employer’s interests during ‘out of work hours’?

Yes, but only where it would be determined that the employee’s conduct will likely damage the reputation or interests of the employer.

In Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156, the Commission found that conduct at an ‘after party’ organised by employees following a Christmas party did not affect the reputation of their employer because there was no evidence the employer’s reputation or interests had been damaged and the employees therefore did not breach their duty to act in their employer’s best interests. 

However, Rose v Telstra Corporation Limited (1998) AIRC 1592, identified that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct which may be deemed as being a rejection or repudiation of the employment contract by the employee. But such circumstances are limited to conduct that:

1. when viewed objectively, is likely to cause serious damage to the relationship between the employer and employee; or
2. damage the employer’s interests; or
3. is incompatible with the employee’s duty as an employee.

What steps can an employer take leading up to the Christmas party?

There is an implied obligation on an employee to act in the best interests of his or her employer where the employee’s conduct is likely to impact the legitimate business interests of the employer. 

In Drake, DP Asbury concluded that the physical altercation in such circumstances was covered by BHP’s Code of Conduct and Charter Values which the employee was aware. Therefore, the employee’s conduct at the Christmas event constituted a valid reason for dismissal on the basis that the behaviour of both men at the work event amounted to misconduct and serious breaches of BHP’s Charter Values and Code of Conduct. 

Employers should make it clear to all its employees that the event is a work event and the company’s policies will still apply at the event. Employers can do this by: 

1. reviewing their current policies to ensure they address the expected standard of conduct for all employees when attending work events;
2. sending email notifications or reminders to all its employees prior to the event outlining the company’s policies and code of conduct; and
3. warning employees that a breach of the company’s policies may result in disciplinary action.

The team at CML have strong referral relationships with quality and pragmatic employment law specialists. Feel free to reach out and we can guide you in the right direction!