HMRC gives employers an allowance of £150 per employee towards a Christmas party, but such events can potentially be far more costly for employers, as David Jepps discusses in this article.

Risks of employment law claims arise from a number of Christmas party scenarios. Typically these scenarios include fighting, drunkenness, offensive remarks, broken promises, bottom slapping and similar.

It is taken as read that fighting at work will amount to gross misconduct potentially allowing an employer to fire an employee without notice. However, legal loopholes can still catch employers out.

Employees with more than two years’ service can claim “unfair dismissal”. That means an employer faced with unfair dismissal claims from such employees has to prove not only that they had a fair reason for dismissal but also that they acted reasonably in dismissing.

If one employee is fired while another one is let off for similar involvement in the same incident, it is vital that employers have followed procedures that will clearly record a plausible reason to justify treating those employees differently.

There are many other loopholes for employers to combat, including technicalities involving “the scene of the crime”.

Generally, Christmas parties will be treated as an extension of the workplace, particularly if only employees attend. If incidents involve outsiders such as friends and family in an environment in which the employer has less control, then matters can become more complicated and great care must be taken in effecting any dismissals. Employees often argue that it is unfair for them to be fired for events at Christmas parties, saying matters occurred outside of the workplace. If the party involves lots of people who aren’t normally part of the workplace, then sometimes such arguments can work. However, similar arguments didn’t work in the real-life example of a postman at a football match seen fighting French police on the TV news. The negative publicity for the Post Office was held to have justified dismissal – but great care always needs to be taken in reaching similar outcomes. What, to borrow a tabloid headline, the “Postman Yob” case underlined is that the knock-on effect of actions on colleagues and the employer’s standing can justify dismissal even if they do not take place “at work” or in working time.

Employees can also claim “constructive dismissal” when they aren’t dismissed but leave saying they have not really resigned but have been forced out by their employer’s actions. One trigger for such claims at Christmas is typically when the manager who has had a few too many drinks then tells his staff what he really thinks of them. The opposite (and just as common) scenario is when the boss lavishes promises of pay rises and promotions that fail to materialise after the Alka-Seltzer has dissolved. Employees can treat such actions as a serious breach of trust destroying the employment relationship. To make matters harder for the employer, there are often plenty of witnesses available to back up the employee who by then has left harbouring a burning resentment prior to filing an Employment Tribunal claim.

Such claims often involve discrimination allegations. Employees can claim discrimination without having worked any set period. There are various types of discrimination claims but sex discrimination is the most common allegation following Christmas parties. Bottom-slapping scenarios are obvious enough. Other regular examples include the female employee passed over for promotion shortly after declining her boss’s invitation to meet him under the mistletoe.

Employers can be held liable for their employees’ actions – such as that of the Christmas party bottom slapper – unless they can demonstrate that those actions were undertaken without any approval whatsoever and that such employees were acting completely on their own initiative.

How do employers protect themselves from these risks?

Two key routes to managing risk are to have well-drafted policies and to get good legal advice.

Documentation providing that all variations to contracts such as pay rises and promotions must be formally approved and in writing would help limit the impact of the broken-promise scenario above. By having policies specifying what is and isn’t acceptable behaviour, employers can more easily disown and distance themselves from the Christmas party bottom slappers and escape liability for their actions.

Mechanisms for setting pay rises and promotions that show candidates each being scored against the same criteria by more than one person (not just the “mistletoe boss”) can help employers say that, in the example above, the “mistletoe” incident was not relevant to the outcome.

Disciplinary policies could help deal with the fighting scenario above, too. However, human nature dictates there will always be cases where claims will arise despite the employer having in place all the policies it needs.

In those scenarios, employers will need specialist legal advice to guide them through the minefield of employment law risks and to find practical solutions. A practical difficulty is that even if a case can be fought to a conclusion and won resoundingly, the costs of securing that victory, not only in pounds and pence but in management time and publicity, can be huge. Early resolutions are therefore highly desirable.

Some years ago an employer was presented with a claim by a female ex-employee who argued that the reason she had been fired was that her manager had made advances to her at the Christmas party. She was funded in her litigation by a union that was keen to increase its membership by crusading for a saintly, deserving cause. However the claim was withdrawn once it was disclosed to the union’s solicitors what their member had got up to at the previous year’s Christmas party. She went immediately from saint to sinner and the deserving cause quickly became a lost cause. Her ex-employer received a late Christmas present from that outcome and had a very happy new year indeed.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.