The “after party” – could employers be liable for what goes on?

It’s ten weeks until Christmas and many Christmas parties will be already planned or in the process of being planned. Some will be more spontaneous team meals, others may take place after Christmas, others may have nothing to do with Christmas at all, or be events involving client entertainment. Whatever the form of event, the Court of Appeal has just published a timely and sobering judgment where the employer was held vicariously liable for events which took place after an office Christmas party.

In December 2011, all employees of Northampton Recruitment Ltd (NRL), a small driving recruitment agency, were invited to the office Christmas party along with their partners and a couple of other work-related guests. The event was organised and held at a golf club and paid for by NRL, including food and free drinks at the bar up to a certain limit. A number of employees were going on to stay the night at a local hotel, which was also paid for by NRL. At the end of the party, Mr Major, the Managing Director and one of only three shareholders (one of whom was Mr Major’s wife) suggested they go on to the hotel for a few more drinks. This was not a pre-planned extension of the party, and a number of the employees who went on to the hotel were not those booked in to stay the night there. However, the taxis were paid for by NRL, as were most of the drinks at the hotel.

A number of employees went home or went to their hotel rooms, eventually leaving 4 employees and their partners with Mr Major. They went outside the hotel lobby for further drinks. At some point, during a discussion about work, Mr Bellman, a sales manager, raised the subject of a new employee who, it was generally thought, earned significantly more than the others. Mr Major was clearly annoyed at Mr Bellman raising this and signalled all the remaining guests to go back inside the hotel. In his inebriated state he lectured them that NRL was his company to do with as he pleased, and he alone had made the decision about the new employee and stood by it.

Evidence was given that Mr Bellman, in a non-aggressive manner, challenged where the new employee was based and suggested that he would be better based at another location. Mr Major swore at Mr Bellman, reiterated that it was his decision, and punched Mr Bellman who fell down. Mr Bellman was bleeding from his left eye area but got back up. He gestured in surrender to Mr Major and said “John, what are you doing? Don’t do this”. At this point Mr Major lost all control. Some of those present tried to restrain him but CCTV footage showed Mr Major breaking free and punching Mr Bellham again with such force that he knocked Mr Bellham out, who fell back and hit his head on the floor.

Very sadly, Mr Bellman sustained a fracture to his skull, haemorrhage and other injuries which led to traumatic brain damage. As a result he suffers from headaches, anosmia, fatigue, low mood, deficits in verbal reasoning, verbal memory and word finding and speech and language impairment. He also lacks the capacity to manage his own affairs. By his representatives, Mr Bellham brought a claim against NRL that it was vicariously liable for the severe personal injury inflicted by Mr Major who was NRL’s employee and Managing Director. The Judge in the High Court ruled that:

• The assault was committed at impromptu drinks which were separate from the Christmas party and not all those present were employees of NRL;
• The discussions at the hotel were clearly not all work-related and account must be taken of the time and place at which the discussion takes place;
• It was significant to consider how far the employment relationship put Mr Bellman at increased risk at the time of the events;
• The party which NRL had paid for had passed without event, but what arose at the hotel was “in the context of entirely voluntary and personal choices”; and
• Any increased risk of confrontation arising from the additional alcohol at the hotel, even if paid for by NRL, could not properly be laid at NRL’s door because the circumstances were so far removed from employment. It had become an entirely separate, voluntary, early hours drinking session and NRL was not vicariously liable for Mr Major’s actions.

Mr Bellham’s representatives appealed to the Court of Appeal (CA). The CA overturned the High Court’s decision and ruled that in fact NRL was vicariously liable for Mr Major’s actions.

The legal principles had been clarified in 2016 by the Supreme Court in the case of Mohamud v W M Morrison Supermarkets PLC where an employee employed to look after the pumps and the kiosk at a petrol station had left the kiosk to assault a customer on the petrol station forecourt. The legal principles to look at are:

1. In broad terms, the nature of the job the employee was employed to do;
2. Whether there was a sufficient connection between the job the employee was employed for, and the wrongful conduct; taking into account whether the employee had used or misused the position entrusted to him to injure a third party.

Applying those questions here, the CA ruled that:

1. On the evidence given at trial, Mr Major was the directing mind and will of NRL, had a wide remit, was in overall charge of all aspects of NRL’s business, did not have set hours, had the authority to control his own methods of work, and much of what Mr Major did was directly or indirectly connected to NRL. Mr Major would have viewed the maintenance of his managerial authority as a central part of his role and NRL had a “round-the-clock” business;
2. In contrast to the High Court’s ruling, there was a sufficient connection between Mr Major’s job and his actions. As previous case law had shown, although the time and place were important to the connection with the employee’s employment, it was by no means determinative. Actions during working hours may not have a sufficient connection, whereas actions outside working hours may do. In this case Mr Major was purporting to act as Managing Director of NRL despite the time and the place of the events. His managerial decision had been challenged, and he took on, as it were, his Managing Director’s hat to assume authority over his subordinates and drive home the nature of his role within NRL in the way he addressed those present. He followed this up with physical assault.

Interestingly, the CA’s decision was caveated both in the leading judgment and in the comments of one of the other CA judges that this case had unusual facts. The other judge specifically commented that the case should not be seen as authority that an employer will automatically be liable simply because a fight breaks out between colleagues at an out-of-work event where one is markedly more senior than the other.

The leading judgment also draws the distinction between circumstances such as these and, for example, a scenario where colleagues go, as equals, for a round of golf or for impromptu drinks after work. The fact that the conversation turns to work and a more senior colleague assaults a more junior one would not necessarily make the employer vicariously liable.

There was force in the argument that there was a separation between the Christmas party and the “after party” both in time and place. However in this case the employees were attending as employees and Mr Major was attending as Managing Director. If at any stage his role as Managing Director had become irrelevant at informal drinks in the hotel lobby, he had chosen to don his Managing Director’s hat again in the lecture he gave to his subordinates, reasserting his authority and following that up with physical force.

Employers planning their Christmas or other parties should ensure in particular that senior members of staff are aware of the potential for liability for the actions of employees at work-related events. There are a number of key steps employers can take to prevent mishaps, including a reminder of the behaviour that is expected from all employees, whether during or arising from the event, will be an important part of those steps.