X-Rated Xmas Parties

Originally published in The Insurance Law Quarterly: Winter 2005

This December, it is worth remembering that it has been established by the courts, to the misfortune of many employers, that social occasions organised by an employer, including the office Christmas party or even just team drinks in the local bar, will be considered to be an extension of employment. The concern for employers should be, therefore, that they will be held liable for the actions or comments of their employees, even when they take place at the office Christmas party.

So, what happens if the party does turn sour? The employer could potentially face claims from employees who have suffered sexual, racial, disability, sexual orientation or religious discrimination following actions or comments by other employees. The potential exposure to damages for such claims is unlimited. The employer could also face a claim of constructive unfair dismissal if the employee were to resign. At present, damages for this type