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Tis’ the season to be jolly – for many employees, an opportunity to relax and forget about their work responsibilities and attend the office Christmas party as they wind down for the year. However, there are many legal risks associated with this period, including unprofessional behaviour, misconduct, bullying, harassment, sexual harassment, and workplace health and safety incidents. Employers need to understand the various legal risks and take steps to protect themselves. A lawsuit would only make that post-Christmas party hangover worse. Below, we set out our seven tips for employers so you can protect your business and make the most out of the festive season.

1. Set Standards

Employers too often assume that employees are aware of what constitutes appropriate behaviour and what does not. Ensure that you then have company policies in place setting out what is acceptable conduct. Employers should also bear in mind that at a Christmas party where alcohol is involved, the Fair Work Commission may not hold employees to the same high standards as during regular work hours.

2. Take Pre-Party Precautions

Before the employees descend on the venue for the Christmas function, ensure that you have undertaken a Work Health & Safety check and assessment to identify any safety hazards. Employers should monitor and restrict access to hazardous areas during the party to reduce the risk of injury to employees.

Further, employers should make sure that they clearly define the time and venue for any Christmas event. Conduct outside the specified time and place are likely not to be the employer’s responsibility or liability. Employers should make clear to employees that the employer will not endorse conduct outside of the official event.

3. Supervise your Employees

If it doesn’t happen on work premises or during official work hours, it doesn’t count, right? Not always. The case of Rose v Telstra Corporation Limited [1998] AIRC 1592 has shown that there are certain exceptions to “out of hours” conduct which may also constitute valid grounds for unfair dismissal. These exceptions include:

  • Conduct that is likely to cause serious damage to the relationship between the employer and employee; or
  • Conduct that can damage the employer’s interests; or
  • Conduct that is incompatible with the employee’s duty.

Further, the Fair Work Commission (FWC) may also hold you vicariously liable for certain misconduct, such as sexual harassment from one employee to another. Vicarious liability refers to the situation when the law will hold the employer, as the person responsible for their employee, liable for the actions of their staff. The employee’s actions must be in the course of their employment.

The case of Stephen Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 (‘Keenan’) encouraged employers to appoint a manager to supervise employee conduct during the Christmas party to avoid any “out of hours” mishaps.

4. Serve Alcohol Responsibly

Employers have a responsibility when serving alcohol at Christmas functions, especially if it is during the official work function. In most disputes that have arisen before courts, the issue surrounded an inebriated employee.

Courts have held that employers may have responsibility for what their employees do even if the employee is drunk, especially for negligence and injury. For example, a drunk employee who falls down the stairs and injures himself may be able to hold the employer liable.

In Damien McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343, the FWC ruled that employers have a responsibility to “take steps” to ensure that they serve alcohol responsibly. This responsibility can be ensuring that the venue of the Christmas party follows responsible service of alcohol principles. The case of Keenan also encouraged appointing a manager.

5. If There’s a Complaint, Follow Correct Procedures

One of the most common grounds for unfair dismissal is that the employer did not afford procedural fairness in dismissing the employee. These procedures include allowing a support person into meetings with the employee or giving the employee an opportunity to address misconduct allegations. Further, under section 387 of the Fair Work Act 2009 (Cth), all procedures must be reasonable for the size and stature of the company employer.

6. Take “Reasonable” Leave

It is common for many employers to direct their employees to take annual leave during the festive season as business slows down. However, employers should remember that there are different regulations surrounding employees who are under an award and those who are not.

For employees who are not under an award, the Fair Work Act 2009 (Cth) section 94(5) provides that an employer may only require an employee to take paid annual leave if it is “reasonable” to do so. Reasonable can include the shutting down of a company over a holiday, such as Christmas.

For employees who are under an award, the employer should check if there are any requirements for the specific award itself.

7. Emphasise Any Social Media Policies

Employers should ensure that all staff are clear on company policies surrounding social media – even if they are not at work. Smart phones increase the risk of exposing your business to damaging or embarrassing content. Inappropriate photos or posts on social media may give rise to claims relating to defamation and privacy. Further, employment contracts now commonly include a clause addressing behaviour online, and employers should remind employees of these policies.


Although there are legal risks associated with the activities in December, it is also key for employers to remember that Christmas is a time for festive fun and cheer. So take the proper precautions to protect your business – and enjoy the party. Questions? Get in touch with our employment law team on 1300 544 755.


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