‘Tis the season to be liable (Legal view)

Employers that don’t mitigate liability risk at workplace parties could face cold, unhappy and litigious holiday season

It may be the most wonderful time of the year but, for employers, the holiday season can introduce liabilities. Employers need to be particularly careful when hosting work-related functions where alcohol is being served or consumed. In such circumstances, employers can be found liable for negligence if a reasonably foreseeable injury to an employee — or to a third party — occurs during, or as a result of, a company-sponsored event. Employers can also be liable for harassment as a result of activities or situations arising from, or at, workplace parties and related functions.

Duty of care to employees

Employers owe a duty of care to employees in certain situations. Where an employer is hosting a work-related event involving the serving or consumption of alcohol, its duty of care has been held by at least one court — the British Columbia Supreme Court in Jacobsen v. Nike Canada Ltd. — to be higher than the duty owed by a commercial host, such as a bar or restaurant to patrons.

This higher duty is justified by the fact an employer has an obligation to provide a safe workplace. By permitting or encouraging alcohol consumption, an employer introduces an element of risk it is reasonably foreseeable could lead to harm. Employers, therefore, have an obligation to take the steps necessary to prevent, as much as possible, such harm from occurring.

Perhaps the most well-known case of employer liability from a workplace event is Hunt (Litigation Guardian of) v. Sutton Group Incentive Realty Inc., where an employee sustained serious injuries in a car accident following an office Christmas party where free and unlimited alcohol had been provided. On her way home, the employee stopped at a tavern where other employees continued the festivities and consumed two more drinks. The accident happened shortly after she left the tavern and was found to have resulted largely from the employee’s intoxicated state.

The employer owed the employee a duty of care and should have ensured she did not drive herself home, found the trial judge. The employer also should have foreseen or anticipated employees might continue the party elsewhere and ensured employees either had accommodation in a local hotel for the night or a safe means of travel home.

The Ontario Court of Appeal overturned the decision and ordered a new trial, but the trial judge’s finding the employer had breached the duty of care was not questioned.

Work-related harassment can happen outside the workplace

In Simpson v. Consumers Association of Canada et al., the Court of Appeal specifically found that, for the purposes of applying the laws relating to sexual harassment, the definition of “workplace” or work-related events is not confined to the four corners of an employer’s premises or to activities that occur during normal work hours. In fact, it was artificial and contrary to the purpose of controlling sexual harassment in the workplace to say after-hours interactions between employees — including management or supervisory employees — cannot constitute the workplace, ruled the court.

Tips for employers

When planning an office party involving alcohol, an employer should consider the following steps to minimize the risks of liability:

• Monitor alcohol consumption. Ensure no one is served to the point of intoxication and no one is served who is already intoxicated.

• Assign management or supervisory-level employees to oversee the event and be the “go-to” person in charge. At the very least, a designated individual should be responsible to stay sober and observe and assist employees and guests in the activities on the premises. All employees and function-related staff should be aware of who these designated individuals are.

• Put in place a procedure that limits alcohol consumption. Avoid open bars or unlimited alcohol. Instead, consider offering one or two drink tickets per person and prohibiting the transfer of tickets to others.

• Consider adopting an alcohol policy that will be enforced for all work-related functions. Ensure there also is a well-communicated harassment and sexual harassment policy.

• Keep work-related events short and offer activities beyond drinking and socializing. Discourage employees from arranging or engaging in further festivities after or beyond the office party.

• Ensure appropriate individuals are informed of the signs of intoxication, the factors that influence impairment and the steps to be taken to avoid intoxication and the importance thereof.

• Offer non-alcoholic beverages and food.

• Offer cab chits, vouchers or a designated driver program. As necessary, arrange for local hotel accommodation or other alternatives to driving home. Caution all employees against the dangers of drinking and driving.

• In the event an employee becomes intoxicated, ask about his mode of transportation and ensure he can get home safely. Attempt to dissuade the intoxicated employee from leaving until he is sober or retrieve his keys.

• Consider whether the party can be held at an off-site location but carefully investigate the venue and its policies.

For more information see:

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

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

Simpson v. Consumers’ Assn. of Canada, 2001 CarswellOnt 4448 (Ont.C.A.).

Susan Sorensen is a partner practising in the labour and employment group at Borden Ladner Gervais’s Toronto office. She can be reached at (416) 367-6017 or [email protected] blgcanada.com.

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