Why it pays to be a Grinch with holiday parties

“Alcohol is very, very bad.”

So says employment lawyer Rob Sider, in highlighting the risks for employers and HR when it comes to holiday parties, calling it “a huge driver of problems” at these get-togethers.

“Probably 95% of bad behaviour or problems at holiday parties are driven by alcohol,” says the partner at Lawson Lundell in Vancouver.

Usually offered as a morale-booster, a celebration, a team-building exercise or a recognition of employee efforts, work events also carry several legal risks and considerations such as after-hours misconduct, off-site responsibilities, workplace accidents and sexual harassment.

“You hate to be a Grinch about these sorts of things but the reality is that the liability is out there. So, you have to weigh the benefit of these things against the potential liability,” says Sider.

Risks: Potential accidents

One big concern is accidents taking place, either at the office setting or an off-site venue.

And the problem for employers is they could be held vicariously liable or get sued, says Sider; for example, if a worker drinks too much at a hotel party and has an accident, both his company and the hotel could be sued.

In some cases, workers’ compensation may be involved, but that will depend on the jurisdiction, along with the event’s location and whether it was after-hours, he says.

A multitude of decisions have said that if somebody is injured at a work-related event, even though it may not be on-site, that’s generally covered by the legislation, says David Whitten, founding partner at Whitten & Lublin in Toronto.

“To the extent it's a sanctioned workplace event, it is just as good as the workplace for workplace safety and insurance purposes… You have to address it. And the person could ultimately be granted benefits if they're injured and have lost time as a result.”

While a person who drives home drunk may be the bar’s responsibility, when it comes to the liability for workplace behaviour with colleagues, “the employer still wears that entirely,” he says.

Risks: Lack of responsibility at off-site events

Figuring out who is ultimately responsible when an event is off-site can depend on a few factors, says Sider, such as what’s expected to happen at the event and who’s paying.

“Lots of times, people go out afterwards and the senior
VP is paying for drinks and it's connected with employment — people are talking about the work, all those sorts of things… so, it's dangerous but there's not a lot you can do to prohibit that other than… you don’t want senior people being the people encouraging these sorts of things to happen.”

Also a problem? If an executive or employee decides to host the party at their home. If anything goes wrong, they could personally be sued, says Sider.

“Then, one of the issues is maybe your work insurance covers you, but then what about your home? Does your home insurance policy cover you?... don't bet on it,” he says.

And if a partygoer drinks too much and seriously injures or kills someone driving home, that could prove very costly, says Sider.

“Where there's not no-fault insurance, you could potentially be on the hook for their care for the rest of their lives. So, it's a huge liability. And I don't think that people think about it.”

Risks: Sexual harassment claims

From a management perspective, consent doesn’t really matter if there’s a sexual liaison between a superior and a subordinate, says Sider.

“It just shows ridiculously bad management skills to put yourself in a situation where, as a manager, you ended up in somebody else’s room,” he says. “It behooves employers to make sure that their managers understand that.”

Leaders can have a good time at these events, says Sider, but they must also ensure “that the company’s liability and the company’s reputation is being assiduously protected.”

These types of events are more complicated by the fact that people are drinking, so they may feel uninhibited and become more touchy-feely than normal, says Whitten.

“This becomes a real issue for management because if you have a manager who's toasted and starts touching people or bringing them in for the bear hug or thinks it's funny to wrap their arms around somebody for pictures — and they knew or ought to have known that that behaviour isn't welcome — now we've got a bigger problem on our hands,” he says.

“It dramatically increases the possibility of a complaint to HR that the person felt harassed or uncomfortable or sexually targeted.”

Whitten mentions one client who thought it would be kind of funny to try to kiss his subordinate on the cheek: “He lost his job for it.”

Reducing the risks: Pick an appropriate venue

So, where should HR begin in trying to reduce the risks? It’s advisable to avoid using remote locations where people end up staying overnight: “Nothing good ever happens there,” says Sider.

When hotels are involved, people often end up in each other’s rooms, leading to “bad interactions” and allegations of sexual harassment or sexual assault, he says.

“One thing leads to another and whether it's consensual or not consensual, it doesn't end well.”

HR should also give employees the option of an Uber or cab after the event and, preferably, offer to pay for the service. At the same time, they should discourage people from driving to the event, and, if needed, hire a shuttle service, says Sider.

In addition, it may be better to host a holiday lunch instead of an after-work event, he says: “They can't drink that much because they’ve got to go back to work.”

Reducing the risks: limit consumption

Limiting alcohol consumption is of course a big recommendation, such as using drink tickets, says Sider.

“It’s not a great idea to have an open bar… practically speaking, if people aren’t paying for their drinks, they drink more.”

Secondly, plan to have a server or bartender doling out the drinks, who will allocate drinks responsibly and cut people off if necessary, says Sider. As a best practice, hire the bartender from a company that has insurance and its workers have “Serving it right” certification.

“You should not be having a party at your office where there's just a whole bunch of... open liquor that's available for anybody. You're just begging for problems,” he says.

There is a body of law that requires employers to take reasonable measures to ensure people are not over-consuming and that they don't leave in an intoxicated state where they could either drink and drive or injure somebody or themselves in an accident, says Whitten.

However, servers can be very busy at these parties, so there's only so much they can do, he says.

“They can't breathalyze the person. And so it tends to be a bit of the wild west. And, ultimately… whether the server themself makes a mistake or doesn't pay attention, the employer is the one that has to wear the liability.”

It’s also wise to have somebody at the event, such as an HR person or designated individual, who will not drink alcohol and oversee people’s behaviour, says Sider. They can ask the bartender to cut off service or ask the person to leave.

“You can do it in a way where it doesn't look like you're accusing anybody of doing anything but you can diffuse that situation. And then it might be a discussion that that person has with ‘Joe’ on Monday morning about ‘What the heck was going on there?’”

Reducing the risks: Handle harassment claims carefully

If, at the event, an employee claims they have been harassed or faced inappropriate behaviour, the immediate reaction from the employer should be to ask the alleged perpetrator to stop the behaviour or, if it’s more serious, to leave, says Sider.

“It would be almost impossible to do a good investigation while a party was going on but you should try to nip whatever it is in the bud.”

But if there is an allegation of assault, then the police should be called, he says.

If there’s a complaint at the event, Whitten says that conducting an investigation on the spot doesn’t really make sense.

“It’s probably best to speak to the person that is alleged to have behaved improperly and ask them to… leave, he says, adding that you can advise them that you will be digging into this further “because once a complaint is made, the obligation to investigate is mandatory — not that night but in short order thereafter.”

Pretty much every employer in Canada is supposed to have a harassment policy in place describing the process by which somebody can make a complaint and the steps that will be taken in an investigation, says Whitten.

“So, if you don't have that policy, [that’s a] big problem because that's one strike against you right off the bat,” he says, adding that employers cannot take reprisal action against somebody for making a complaint.

Reducing the risks: Accommodating alcoholism

If a person has been too rowdy or obnoxious at previous work events, the employer can request the person not come to future gatherings, says Whitten: “There is no legal right to attend every work function…  with the exception if people are being excluded based on Human Rights Code-protected grounds.”

For example, if they're the only person of colour not being invited, HR may need to do “a bit of a triage to ensure that there's a reasonable basis not to ask them to come,” he says.

Similarly, if someone has admitted that they have an issue with alcohol, this can trigger the accommodation process.

“I think before you start barring people from holiday parties,
it's better if you've gotten to that point that suggests that the employer now has some awareness that the person has an issue,” says Whitten.

That can start with discussing concerns about their behaviour and if they should attend the party, and saying, “If you are going to attend, let's put in some stopgap measures to ensure that you don't over consume.”

However, it’s advisable for HR to communicate with everybody about appropriate behaviour at office parties, says Whitten.

“This is helpful because it doesn't single anybody out but it also gives HR a basis upon which to discipline people who do not follow that policy.”

It’s also important to note that if an employer is aware that somebody has behaved inappropriately when alcohol was involved, and they turned a blind eye to it — even though that person may not have admitted that they have a problem — it triggers an obligation on the employer to at least make some inquiries, says Whitten.

Reducing the risks: Appropriate discipline

If somebody has a disability, such as alcohol use disorder, it could mean the employer must accommodate to the point of undue hardship, he says — such as helping the person source treatment for alcohol use disorder or tolerating relapses — before their employment is terminated.

But if a person claims they have an alcohol addiction, that doesn’t always require accommodation when it comes to discipline, says Sider, citing a previous case where a worker was accused of stealing from the liquor store, but claimed alcoholism as a defence.

“Just because you're an alcoholic doesn't mean make you a thief; just because you’re an alcoholic doesn’t make you obnoxious,” he says.

Whether someone’s behaviour at a work event could lead to termination for cause is a complicated matter, according to Whitten: “The standard is extremely high.”

If an employee sexually harasses a colleague, for example, that could potentially form the basis for a termination for cause under the common law. However, the Employment Standards Act of Ontario does not have a definition of cause, he says.

“It says you can terminate somebody, providing them with their minimum entitlement, or if they've engaged in ‘willful misconduct,’ you can terminate with no payment at all.

So, it’s possible that HR has cause under the common law but it does not meet the willful misconduct standard under the legislation, says Whitten, “which has been determined to be a higher standard.”

As a result, the person may come back and say they’re still entitled to the minimum statutory entitlement — especially if the workplace policy is lacking.

“Long story short, you should get legal advice before you proceed with the termination as to how you want to handle it.”