Vicarious liability at Christmas: work, the party and the after-party
Christmas is almost upon us…as are the much awaited office Christmas parties. Whilst no one wants to be the office scrooge and detract away from the positivity of such an event, employers should be aware of their potential liabilities.
Under the Equality Act 2010, employers can be held vicariously liable for discriminatory acts that their employees commit during the course of their employment. This can include discriminatory acts (such as sexual or racial harassment) preformed during events outside of the normal working day, such as Christmas parties, which are considered to be an extension of the workplace. This applies regardless of whether the acts are done with the employer’s knowledge or approval.
The recent Court of Appeal decision in the case of Bellman v Northampton Recruitment Ltd considered the question of whether an employer can be held vicariously liable for an assault committed by an employee after its Christmas party had finished.
The Respondent’s Managing Director; Mr. Major, had been childhood friends with the Claimant. Following an uneventful Christmas party, Mr. Major, and several other colleagues headed back to a hotel for an impromptu after-party. During this after-party, the Claimant and Mr. Major became embroiled in a heated argument. Mr. Major then gathered all the remaining employees and lectured them on his authority. The Claimant then politely challenged Mr. Major who proceeded to punch him in the face. The Claimant sustained severe head injuries which resulted in the Claimant suffering from severe brain damage.
Initially, the High Court found that Mr. Major was not held to be vicariously liable as the drinks that followed were separate from the company party. However, the Court of Appeal has since overturned this decision on appeal. They considered the following two key points:-
(a) The nature of the employee’s job; and
(b) Whether there was sufficient connection between his job and the wrongful conduct to render vicarious liability appropriate.
The Court of Appeal reasoned that Mr. Major was the MD of the company, was its mot senior employee and had full control over how he conducted his role. As such when he was lecturing staff about his authority, he was acting as the Respondent’s Director. Additionally, the CoA noted that the party was not a purely social event happening to involve colleagues but it was a follow-on from an organised work event attended by most of the company’s employees, where the company paid for taxis and drinks. In these circumstances, the judge held that there was a sufficient connection between the Managing Director’s wrongful conduct and his role. Accordingly, the company was vicariously liable for his actions.
This is a significant decision for employers and it appears that vicarious liability can extend to work function after-parties. In the CoA’s judgment, Lord Justice Irwin did however stress that this case was unusual and highly fact-specific. Mr Major’s high level of authority and unrestricted role were very unusual and are unlikely to arise in many cases of this kind. As such, this case should not be regarded as authority for employees to hold employers liable for actions outside of work and much will depend upon the facts and circumstances of each individual case.
Carley Dhand, Employment Solicitor at Linder Myers Solicitors advises:-
“Can the same person carry out an investigation and disciplinary process if the organisation is particularly small?”
The Acas Code of Practice provides that “In misconduct cases, where practicable, different people should carry out the investigation and disciplinary hearing” (paragraph 6). You would therefore have to be able to demonstrate that it was not practicable for different people to be involved in the two stages. A failure to comply could lead to an uplift in any ET award for unfair dismissal by up to 25%.
An employer will be judged by the objective standards of a hypothetical reasonable employer and, ultimately, whether a particular course of action is reasonable will be a matter for a Tribunal to determine in all the circumstances of a particular case. The introduction to the (non-statutory) Acas Guide confirms: “The law on unfair dismissal requires employers to act reasonably when dealing with disciplinary issues. What is classed as reasonable behaviour will depend on the circumstances of each case, and is ultimately a matter for employment tribunals to decide. However, the core principles are set out in the Acas Code of Practice”.
The case of Premier International Foods Ltd v Dolan and anor EAT 0641/04, is authority for the proposition that it is for a tribunal, having regard to the nature of the allegations made, the manner of the investigation, the size and capacity of the employer’s undertaking and the relevant circumstances, to determine whether it was unfair in a particular case for an investigator to also chair the disciplinary meeting and be the dismissal decision taker.Find out more about our Employment department