As the festive season approaches, many employers are planning their annual Christmas parties. These events are an opportunity to celebrate the year’s achievements, boost morale, and strengthen team relationships. However, they also present potential risks for employers, particularly when it comes to vicarious liability.
In this blog, we’ll explore what vicarious liability is, how it can apply to Christmas parties and other work-related events, and the steps HR professionals can take to mitigate any risks.
What is vicarious liability?
Vicarious liability is a significant concern for organisations planning their annual festive gathering. Under this rule of law, employers may be held responsible for the actions of their employees during work-related activities, even if they occur outside regular working hours and away from the company premises. In the eyes of the law, a Christmas party may still be considered “in the course of employment,” meaning employers are liable for their employees’ conduct during such events.
While it may seem unfair, employers can be held liable for any acts of discrimination, harassment, or victimisation committed by their employees, regardless of whether the employer was aware or approved of the behaviour. One such case that highlights this risk is the 2011 incident involving Mr Major and Mr Bellman at Northampton Recruitment Ltd’s Christmas party.
Bellman v Northampton Recruitment Ltd
In December 2011, Northampton Recruitment Ltd held a work Christmas party for its staff at a golf club. Following this, some of the guests went to a hotel bar. Mr Major, the Managing Director of Northampton Recruitment Ltd, and Mr Bellman, a sales manager, were amongst the group.
One of the topics of conversation was about a new hire. Mr Major lost his temper and lectured the group, explaining that he was the owner, made the decisions and paid their wages. When challenged in a non-aggressive way by Mr Bellman, Mr Major swore at him and punched him twice. This resulted in Mr Bellman suffering from traumatic brain damage.
Mr Bellman proceeded to make a claim for damages, arguing that the Northampton Recruitment Ltd was vicariously liable for Mr Major’s conduct. While the High Court initially ruled that the agency was not vicariously liable for the Managing Director’s assault on Mr Bellman, because it considered that the drinks at the hotel were not planned and had occurred at a different location to the party’s venue, the Court of Appeal adopted a different perspective.
The Court of Appeal ruling
The Court of Appeal followed the Supreme Court’s judgment in Mohamud v W M Morrison Supermarkets PLC, which established the following test:
- What are the “field of activities” entrusted by the employer to the employee?
- Is there enough of a connection between the “field of activities” and the wrongful conduct to justify holding the employer vicariously liable?
The Court of Appeal acknowledged that “the unscheduled drinking session was not a seamless extension of the Christmas party… The venue had changed, there was a temporal gap between the party and drinks, albeit relatively short, and attendance at the drinking session was voluntary.” However, the Court emphasised that the drinking session should be viewed in the context of the wider evening’s events:
- The drinks took place on the same evening as the work event, which had been organised and funded by Northampton Recruitment Ltd.
- Mr Major had already been fulfilling his managerial duties for much of the evening, and as the organiser of the event, he had arranged and paid for the taxis to the hotel and continued to provide drinks, also paid for by the company.
The Court concluded: “In summary, it seems to me that given the whole context, and despite the time and place at which the assault occurred, Mr Major’s position of seniority persisted and was a significant factor. He was in a dominant position and had a supervisory role which enabled him to assert his authority over the staff who were present…”
Therefore, the Court determined that there was enough of a connection between Mr Major’s activities and the assault to justify holding Northampton Recruitment Ltd vicariously liable.
Lord Justice Irwin was careful to note that the facts of this case were unusual and that such cases are likely to be rare.
The implication of the ruling for employers
This ruling serves as a reminder to employers that they can be held accountable for their employees’ actions at work events, contrary to common misconception.
It’s crucial for organisations to understand the potential risks associated with hosting or sponsoring social events like Christmas parties. By setting clear expectations and providing guidance on appropriate behaviour, employers can help ensure that their workforce’s conduct aligns with company standards, both in and out of the office.
