Alarm bells not jingle bells

With the office party season now in full swing, the High Court has made a timely decision on whether an employer was responsible for injuries caused to an employee by a manager at post-Christmas party drinks. Alastair Currie reports.

The background

An employer may be held vicariously liable for the acts of an employee committed "in the course of employment".  The test is broadly whether the act was so closely connected with the employment that it would be fair and just to hold the employer vicariously liable.

Case law has established that employers can be liable for the acts of employees undertaken at social events outside of work, if there is a sufficiently close link between that event and the working relationship – the classic example being a party for employees, organised and / or paid for by the employer. 

The facts

In Bellman v Northampton Recruitment Limited, the defendant company held a Christmas party for its employees and paid for taxis and drinks.  The party passed without incident and a dozen or so employees including Mr Major, the managing director, moved to a nearby hotel to continue drinking into the early hours of the morning.  The after party was not a planned extension of the work event but the company did pay for taxis to the hotel and there was an expectation that it would continue to contribute towards drinks. 

After moving on the atmosphere was jovial and conversations were on social topics until Mr Major and an employee, Mr Bellman, became involved in a heated discussion about work-related matters.  Mr Major expressed uncompromising views that he owned the company and his decisions should not be challenged.  After Mr Bellman confronted him (in a non-aggressive manner), Mr Major lost his temper and assaulted him.  As a result of the assault Mr Bellman suffered permanent brain damage and is unlikely to work again. 

Mr Bellman sought compensation from Northampton Recruitment Limited, on the basis that it was vicariously liable for the actions of Mr Major.

The decision

The High Court dismissed Mr Bellman's claim and held that the company was not vicariously liable for the assault.  Applying the test set by the Supreme Court in a decision earlier this year (Mohamud v WM Morrison Supermarkets), the Court made the following observations.

• The responsible employer's remit was satisfied. Mr Major was undisputedly authorised to act on the company's behalf and was responsible for managing and motivating staff. Decisions to pay for taxis and drinks were made by Mr Major on the night. 

• However, there was an insufficiently close connection between the act and the course of the employment. The assault occurred after the work event and the drinks at the hotel were "impromptu" and therefore sufficiently separate that they did not occur in the course of employment. This was despite the company contributing towards the final drinks bill and a work-related conversation leading to the assault.  The Court also considered the undesirable consequence of extending vicarious liability too far; rendering employers potentially uninsurable. 

• The employment relationship did not put the employee at a sufficient risk of harm. The work event passed without incident and the subsequent impromptu heavy drinking was entirely voluntary – it was not a 'seamless' continuation of the work event.

What does this mean for me?

The High Court's decision does not change the law to exclude employer liability for work related social events.

However, on these particular facts the High Court found that there was an insufficiently close connection between the 'impromptu' drinks and the employment relationship. Note, however, that the High Court emphasised that each case will be heavily dependent on its individual facts and this decision was finely balanced. It is easy to envisage a scenario where post-party drinks, attended by management and paid for the employer, could give rise to vicarious liability – commentators have noted that the decision in this case was surprising and it may be that it will be appealed.

Accordingly – and at the risk of dampening the festive party season - employers organising social events should encourage restraint in the consumption of alcohol (including at any post-party drinks) and remind staff that the usual standards of behaviour will be expected at all stages of an event. Any misconduct at social event may then be dealt with under the employer's disciplinary policy, which will increase the prospect of the employer successfully defending any subsequent claim for various liability. 

Please do contact me, or your usual Bevan Brittan contact, if you require any further advice on minimising your risk of vicarious liability arising, whether in relation to the current party season or more generally.