‘What happens on a staff night out, stays on a staff night out’

The holiday season is well underway with Christmas parties planned and booked. However, with seasonal joy and merriment comes a warning: inappropriate acts carried out by staff at company events can lead to liability on the part of employers.  

While it is well known and accepted that employers may be liable for inappropriate conduct by staff members in ‘the workplace’ and during office hours, employers are often less well versed in how to deal with inappropriate conduct at work-related events. So where is the line between work and non-work-related events, and how can employers best protect themselves?

Events outside the workplace and outside of working time

The law states that employers are liable for acts of harassment and sexual harassment carried out by their employees ‘in the course of employment’.

Despite this, there is a common and somewhat dangerous misconception that “what happens on a staff night out, stays on a staff night out.” This was the exact sentiment declared by a manager to Ms Pealing, a junior employee, before he attempted to place a banknote in her cleavage[1]. The respondents’ representative submitted that the manager’s conduct “wasn’t in works time, nor was it on works premises; it happened outside of work,” suggesting the employer would not be liable for the manager’s sexual harassment.

In Chief Constable of Lincolnshire Police v. Stubbs[2], the Employment Appeal Tribunal acknowledged that the dividing line between employment and off-duty conduct can become especially blurred where social events involving colleagues are concerned. Further, in Lister & Ors v. Hesley Hall Ltd[3], the House of Lords held that the question to be asked is whether the employee’s wrongful acts were “so closely connected with his or her employment that it would be fair and just to hold the employer vicariously liable”.

In the present case, the night out was attended almost exclusively by the first respondent’s employees. The premises at which the event took place was closed for the evening, and the two directors of the respondent company made a financial contribution to the night out. For these reasons, the Tribunal arrived at the unanimous view that there was a sufficiently ‘close connection’ between the employer and the incident to render it just that the employer should be vicariously liable for the manager’s sexual harassment.

The claimant in this case said she was left feeling “objectified” and “humiliated” and was awarded more than £5,000 in compensation.

Christmas parties in the employment tribunal

Each year the employment tribunal publishes a report on cases heard. This year to date, ten employment tribunal claims have cited Christmas parties and one third of the reported cases related to sexual harassment and/or discrimination related to sex.  

Employers must be aware that work-related events carry risk, in particular, where alcohol is involved. Sexual or sex-based harassment and discrimination is the largest area of risk, with the heady combination of alcohol and seasonal jollity sometimes becoming a toxic combination clouding employees’ judgement.

In addition to Ms Pealing’s case described above, there are a number of other cases which highlight the risks arising from such events, including:

• In P v Chrest Nicholson Operations Limited[4], P’s complaints of harassment were upheld and her employer was liable, following a colleague of P attempting to kiss them whilst travelling in a taxi to a hotel following the company Christmas party, and P subsequently being raped by her colleague.
• In Phillips v Pontcanne Pub Company Limited[5], Ms Phillips brought a successful constructive dismissal claim after she was put in a ‘playful’ headlock by a colleague during the company Christmas party which left her unconscious.

What steps can employers take to mitigate risk arising from workplace events?

While it is unlikely that employers will be able to eliminate all risks arising from workplace events, there are steps that can and should be taken both preventatively and following any complaint, to avoid escalation to an employment tribunal claim.

Preventative steps are even more important since the introduction in October of the new requirement for employers to take a positive action to prevent sexual harassment. Under the Worker Protection Act 2023 employers must take ‘reasonable steps’ to actively prevent the sexual harassment of their employees. If they don’t and the worst happens, they may be liable for compensation plus an additional uplift of 25% on the total compensation in relation to such failures. Examples of preventative steps include:

• Carrying out risk assessments of the workplace and any particular events;
• Implementing (or updating) policies relating to discrimination, harassment and disciplinary and grievance procedures; and
• Training the workforce on what constitutes discrimination and harassment, the employer’s behavioural expectations and what to do if they are a victim.

As well as the positive duty to prevent sexual harassment, the law on harassment may afford an employer a defence to a claim of vicarious liability by showing that they took ‘all reasonable steps’ to avoid harassment (which is a higher bar than the ‘reasonable steps’ required under the preventative duty). An example of such a defence succeeding (albeit in the context of a personal injury claim) can be seen in the case of Shelbourne v Cancer Research UK[6] where the employer had risk assessed the event and sought to minimise any risks identified by hiring additional security guards and so they were not liable for the injuries suffered by one employee who was assaulted by another employee.

Employers should also be aware of the culture they are creating. The effect on the victim of any harassment is viewed subjectively, meaning that the effect is viewed through the eyes of the victim. As such, any claims that the behaviours were ‘banter’ or ‘a compliment’ are not an adequate defence. Employers should aim to cultivate a culture of respect and inclusivity and make it clear that discrimination and harassment will not be tolerated and will lead to disciplinary action.

If complaints of discrimination or harassment are made, these should be properly investigated, and disciplinary action meted out where necessary. In addition, complainants should never be treated less favourably for raising issues of discrimination and harassment.

How we can help

If you have any questions about employers’ duties to prevent discrimination and harassment or if you need assistance regarding employee complaints, please contact a member of our Employment team.

Sources:

[1] 8000363.2024_-_Miss_Freya_Pealing_v_1__The_Croft_Aberdeen_Ltd_2__Andrew_Robert_Eagar_-_Judgment.pdf (publishing.service.gov.uk)

[2] [1999] ICR 547

[3] [2001] ICR 665

[4] P v Crest Nicholson plc and Crest Nicholson Operations Limited: 3311744/2020 and 3313454/2020

[5] Phillips v Pontcanne Pub Company Ltd: 1600719/2018

[6] [2019] EWHC 842 (QB)