Office holiday parties should be cause for celebration, not litigation (Legal view)

Party venue still considered a workplace

As the holiday season approaches, employers across the country are planning that popular and sometimes notorious tradition — the office holiday party. But many employers are hesitant, and justifiably so, due to the potential liability of holding such an event, particularly in light of court decisions finding employers responsible for the actions of intoxicated employees.

Whether or not to serve alcohol at a company party can be a tough decision. It can boost employee morale while excluding it can risk disenchantment.

But the potential for problems, and employer liability, increases when alcohol is served. Employers should keep in mind an office party is considered part of the workplace, says Natalie McDonald, a partner with the Toronto-based employment law firm Grosman, Grosman and Gale.

“The employer still has an obligation to provide a safe working environment,” says McDonald. “Employers need to be aware and take every step possible to ensure safe circumstances.”

Court case outcomes frightening for employers

She points to court decisions in recent years, such as Hunt (Litigation Guardian of) v. Sutton Group Incentive Realty Inc. and Jacobsen v. Nike Canada Ltd., which emphasized the employer’s responsibility for intoxicated employees getting home safely. Both cases involved an employee getting in a car accident after drinking at work and the employer being held partially responsible for the injuries. In Hunt, the employee was drinking at a holiday party.

The outcome of these cases can be frightening for an employer but the risk can be lessened, through preventative measures, without completely excluding alcohol. These can include limiting consumption through drink tickets or a limited period of serving, providing taxi chits at the employer’s expense or, if necessary, confiscating the keys of someone intending to drive drunk.

Employers should follow these practices regardless of when or where the function is held, says McDonald. She warns that employer liability extends to off-site locations, which are considered part of the workplace if they are the site of company-sponsored events — even after normal working hours. Off-site functions have a combination of commercial host liability, which bars normally have, plus the employer’s obligation to provide a safe working environment, she says.

If an employer chooses not to serve alcohol at the office holiday party, however, it doesn’t mean it’s free from responsibility. An employer can still be liable if violence, harassment or other criminal conduct takes place during a party.

McDonald recommends employers take measures to avoid problematic situations, much as they would in the normal office environment. It should be made clear that company policies apply to work-related functions as well as the office and if something happens, employers should follow the same procedures.

“Employers must be prudent and take appropriate steps to address a situation,” she says. “Treat incidents at parties the same as if they happened in the office.”

This could include an immediate investigation and suspension. McDonald also suggests the offending employee or employees be sent home immediately, perhaps in a taxi at the company’s expense, to make it clear the employer is doing something about it.

Senior management should be present

It’s also important a senior-management person who can make decisions is present at all times, says McDonald, in case something happens that the employer needs to address. This will make the employer better prepared should it need to launch an investigation.

“If the employer is throwing the party, someone in a senior position should stay to the end. It might be seen to have a legal duty, if not a moral duty, to ensure people get home safely,” she says.

If an employee demonstrates bad behaviour at a company party, how the incident is treated can depend on the employee and the behaviour itself. If it’s an isolated event by a normally good employee, McDonald recommends talking to the employee about it, perhaps even referring him to the employee assistance program (EAP), but not making a big deal about it. However, it could be included as part of a cumulative pattern of bad behaviour leading to discipline.

“An employee who embarrasses himself at a party could impact his (status in terms of promotions or discipline) but it should be looked at contextually,” says McDonald.

For more information see:

Hunt (Litigation Guardian of) v. Sutton Group Incentive Realty Inc., 2002 CarswellOnt 2604 (Ont. C.A.).

Jacobsen v. Nike Canada Ltd., 1996 CarswellBC 347 (B.C. S.C.).

Jeffrey R. Smith is editor of Canadian Employment Law Today, a sister publication to Canadian HR Reporter. For more information visit

Tips for employers

How to decrease employer risk

Below are some tips from Natalie McDonald, a partner with Toronto-based law firm Grosman, Grosman and Gale, on how to decrease the risk at office parties:

limit consumption of alcohol through drink tickets or closing the bar early;

provide taxi chits or transportation to and from the party;

confiscate keys from intoxicated employees who try to drive home;

ensure a representative from senior management is at the party until the end; and

treat incidents such as fighting or harassment as if they took place in the office during normal working hours and according to company procedure.

Holiday parties

Fewer employers hosting holiday parties

2007 will see fewer company-sponsored holiday events than previous years, according to a survey of employers in the United States.

Battalia Winston, a New York-based executive recruitment firm, asked 104 businesses about holiday plans. Eighty-five per cent planned to have some type of holiday celebration, down from 94 per cent in 2006 and the third-lowest percentage in the survey’s 19 years. There were also significant drops from last year in the percentage of businesses having evening events (54 per cent, down from 74 per cent) and serving alcohol (70 per cent, down from 85 per cent).

Some other survey results:

58 per cent of those serving alcohol are restricting consumption, such as focusing on a meal (20 per cent), closing the bar earlier (16 per cent) and limiting complimentary drink tickets (nine per cent);

76 per cent of corporate holiday parties are off-site;

26 per cent of businesses give a gift to employees, 12 per cent give to clients and 10 per cent to management; and

41 per cent of businesses say employees plan to exchange gifts with each other.

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