‘Tis the season for festivities and merriment but for employers, organizing holiday parties comes with a set of legal considerations. While the goal of these work get-togethers is to foster a joyful atmosphere, it is crucial to be aware of potential liabilities associated with holiday parties, or any employer-organized events.
Alcohol consumption and intoxication
One of the primary concerns is the liability that can result from the consumption of alcohol by employees. Employer-host liability first arose in Jacobsen v Nike Canada Ltd., where the employer provided its employees with a substantial amount of beer during work hours. After work, one of the employees, along with other co-workers, visited two nightclubs and continued to drink. The next morning, when the employee was heading home, he drove off the highway into a ditch and suffered injuries that left him quadriplegic. The employer was held liable for 75% of the total damages award of CA$4,829,420.58 (adjusted for inflation).
Harassment and discrimination
Employers can also be held vicariously liable for the actions of their employees during company-sponsored events. While holiday parties are often well-intended, they can also lead to inappropriate and harassing behaviour. In Lorion v Calypso Water Park Inc., an employee was sexually assaulted by her supervisor at a staff party where the employer provided food and drinks. Employees could also bring in their own alcohol for the purposes of the party. In deciding that the employer was vicariously liable, the court found that it materially increased the risk that the unauthorized acts of sexual assault and/or assault would occur.
Workers’ compensation claims
In addition to the circumstances described above, accidents and injuries at holiday parties can also result in workers’ compensation claims that can impact an employer’s premiums. Whether an injury is covered under the workers’ compensation system will depend to the facts leading to the claim. However, generally, if it is an activity the employer organized and there was an expectation that the employee attend, the employee can file a workers’ compensation claim for any resulting injury.
Creating a safe holiday party environment is not only a moral responsibility but a legal one. In addition to assessing the venue for potential hazards and making employees aware of emergency exits, employers should also consider:
- Implementing controls when serving alcohol, such as having a drink-ticket system, providing non-alcoholic alternatives, arranging transportation options and generally promoting responsible drinking;
- Communicating expectations regarding behaviour at the event;
- Reiterating company policies and providing a clear reporting mechanism to allow the employer to address complaints promptly;
- Thoroughly investigating any complaints that arise from the event, particularly if there are allegations of harassment, sexual harassment, bullying or discrimination; and
- Purchasing liability insurance for the event, if required.
As the host, employers have a positive obligation to protect their employees. By taking precautions, employers can significantly reduce the risk of accidents and subsequent legal issues. However, even with proper precautions, there may be conduct by employees that gives rise to legal obligations for the employer to investigate, including any allegations of harassment, bullying or discrimination. In such circumstances, Dentons’ Workplace Investigations Group can provide advice with respect to employers’ legal obligations or act as an independent third-party investigator into allegations arising from holiday parties. If you have any questions about potential employer liability arising from employer-organized events, please reach out to Taylor Holland, Jenny Wang or any member of Dentons’ Employment and Labour group.