Employers should be aware that company-funded or organised functions are likely to give rise to obligations and potential liability, even if the function is being held offsite and outside of work hours. Risks presented by employer-held functions can include harassment, bullying, work health and safety (WHS) and workers’ compensation.
While these risks have always existed, the important differences between Christmases past and Christmas 2024 are:
However, this doesn’t mean you have to or should cancel your Christmas party altogether. We’ve written up a brief guide on the things that employers should keep in mind when holding workplace functions for their employees and what to do if there is inappropriate conduct.
Employers have a broad obligation to protect the health and safety of their workers, while those workers are at work under section 19 of the Work Health and Safety Act 2020 (WA), and employers can and have been prosecuted for breaches that occur at work functions.
In 2015, an employer named Primepower Engineering Pty Ltd was prosecuted as a result of one of its employees receiving life-threatening injuries during a non-compulsory work function. The work function was held to celebrate the Director’s birthday, and involved employees finishing work early to enjoy employer-provided drinks and food at the business premises. Primepower plead guilty to failing, so far as was practicable, to provide and maintain a working environment in which its employees were not exposed to hazards, and was ordered to pay an $80,000 penalty.
The introduction of psychosocial regulations, and the focus by regulators on psychosocial risk means that inappropriate conduct at workplace functions – traditionally dealt with as an HR issue – now have WHS implications.
In addition, there are several provisions in the legislation that impose obligations on employers to prevent sexual harassment. See our other article here for more information.
The Fair Work Commission (FWC) has previously held that the implied duty of fidelity and good faith owed by an employee to their employer can operate to prohibit certain out-of-hours acts by employees. This duty can bring out-of-hours conduct committed by an employee into the scope of the employment relationship.
Therefore, it’s important to remember that even if a function is held outside of work hours, it can still be considered as being ‘in connection with work’. If an employee commits out-of-hours conduct that goes against workplace policies or their obligations and duties to their employer, this can become a legitimate concern for the employer and may provide grounds for disciplinary action. Examples include conduct that impacts the health and safety of employees or workplace relations.
Employers should take steps to ensure that their conduct policies are up to date and clearly cover expectations for behaviour from employees, such as harassment, bullying, discrimination, sexual harassment, WHS, drugs and alcohol and social media use.
Employers should also ensure that their employees have acknowledged these policies, understand them and have received the proper training on them. Employees should also be warned of the potential disciplinary consequences for breaching workplace policies, which will apply to the function.
When planning your end-of-year function, here are some (non-exhaustive) general considerations to keep in mind to keep the function safe and enjoyable for all:
The FWC has held that in certain circumstances, an employee can be validly dismissed for out-of-hours conduct. These circumstances are where, viewed objectively, the conduct is:
Therefore, if one of the above circumstances applies and there is a sufficient connection to work, an employer may be justified in disciplining an employee for conduct which was committed out-of-hours. However, this is only a very general principle and its application will depend heavily on the individual circumstances of a matter as illustrated in the two cases below.
In the case Keron v Westpac Banking Corporation, an employee was dismissed from his employment after inappropriately touching a coworker on the bottom at a sundowner event hosted by his employer. The employer had organised the event at a pub, and paid for the food and bar tab. The FWC found that the employee’s dismissal was not unfair, and that the sundowner event had a sufficient connection with the employer and workplace to justify the application of the employer’s workplace policies.
On the other hand, in the case of Keenan v Leighton Boral Amey NSW Pty Ltd the FWC found that an employee’s dismissal for his behaviour at a work Christmas party was unfair. The employee had attended a Christmas function organised by his employer at a hotel, and admitted to consuming 11 alcoholic drinks over the course of the event. In examining the evidence, the FWC found that the following allegations against the employee were made out:
Despite finding that the above conduct did occur, the FWC held that most of it was not capable of being addressed or disciplined by the employer because it took place in the hotel’s upstairs bar and on the street outside. For the incidents which did occur within the time and physical boundary of the Christmas function, the FWC found that only one of them constituted a valid reason for dismissal. Nevertheless, the dismissal was considered unfair because of factors such as the isolated nature of the conduct, the employee’s intoxication, the way in which alcohol was served at the function, and the procedurally unfair process of dismissal.
For specific advice on how to navigate and address improper conduct by an employee, please contact Renae Harding, Greg Smith or Dominique Hartfield in our Workplace Relations & Safety Team.
This article was written by Grace Pham, Solicitor | Workplace Relations and Safety.