Work Christmas parties – lessons from the 2015 Christmas season

Christmas season is here again meaning there will be a string of work Christmas parties and functions for employees to attend. In December last year I wrote about Keenan v Leighton BoralAmey NSW Pty Ltd[2015] FWC 3156, a complicated unfair dismissal case resulting from an employee’s inappropriate behavior both before and after a work Christmas function in 2014. There still appears to be a need to educate employees about behavior at work Christmas functions, as the wave of unfair dismissal cases resulting from work Christmas parties continues. In this blog post I will summarize the case of McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343.

Key principles

A work Christmas party is a work event, meaning the employer’s policies and codes of conduct will generally apply to employees at work Christmas parties. Behavior management and disciplinary processes for breach of a policy or code of conduct will be the same for behavior at a work Christmas party as for behavior during ordinary work hours.  Inappropriate behavior at a work Christmas party can be sufficient reason for dismissal, particularly where the behavior effects the safety and welfare of other employees.

Work Christmas parties ordinarily occur within a set time frame. Behavior that occurs after a work Christmas party has ended at an unofficial after party will not ordinarily be considered behavior that occurred in the course of employment. However, it is still possible for an employee to be dismissed from their employment for conduct that occurs outside the workplace.

McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343

Facts

Mr McDaid was employed by Future Engineering and Communication Pty Ltd (FEC) as a Project Coordinator. FEC held a staff Christmas event on 19 December 2014 which involved a day of go-karting followed by a Christmas party on FEC premises. FEC provided alcohol, soft drink and food, and did not provide any controls on the amount of alcohol consumed. The party was held in an area where there was a swimming pool. Although the conduct occurred on 19 December 2014 and Mr McDaid’s employment was terminated on 17 March 2015, and an application for unfair dismissal must be made within 21 days, a decision was not made until 2016 due to unsuccessful attempts at conciliation.

Mr McDaid had a history of behaving in an aggressive manner towards other employees in the workplace. He attended the go-karting event and then quickly became intoxicated at the Christmas party. He was aggressive towards Mr Sinna, a Design Engineer at FEC and pushed him several times in the chest. Mr Davies, FEC’s General Manager, intervened at one point and told Mr McDaid he should go home. After a short period, Mr McDaid continued to harangue Mr Sinna, became physically aggressive towards Mr Sinna and threw Mr Sinna into the swimming pool fully clothed.

Mr Davies approached Mr McDaid and told him to leave the premises. Mr McDaid then pushed Mr Davies twice, on the second occasion with such force that Mr Davies was propelled backward, hit the front gate of the premises and suffered some minor injuries. After Mr McDaid helped Mr Davies to his feet the two men started to exchange blows until Mr Davies hit Mr McDaid on the side of the head.

Mr McDaid’s employment with FEC was terminated on 17 March 2016 for reason of his behavior at the FEC work Christmas party. Mr McDaid filed an application for unfair dismissal with the Fair Work Commission. Conciliation failed and the matter was heard by Commissioner Williams.

Legal analysis

A national system employee to which the Fair Work Act 2009 (Cth) (Fair Work Act) applies is protected from unfair dismissal if they have served the minimum employment period (6 months or 12 months for small business employers), and if they earn less than the high income threshold (currently $138,900 per year) (see s.382 Fair Work Act). Mr McDaid satisfied this criteria. Section 385 provides that an unfair dismissal will have occurred where:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.

In Mr McDaid’s case, the issue to be determined was whether the dismissal was harsh, unjust or unreasonable. Section 387 provides eight criteria the FWC must take into account when determining whether a dismissal was harsh, unjust or unreasonable:

1 Whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees)

The three incidents that occurred during the Christmas party were each alone valid reason to dismiss Mr McDaid. Haranguing Mr Sinna, verbally abusing him, pushing him and throwing him in the pool was a valid reason for dismissal. Refusing to leave the property when directed to do so by the General Manager was a valid reason for dismissal. Initiating a fight with Mr Davies, and pushing him into the gate with such force he sustained minor injuries was a valid reason for dismissal.

2. Whether the person was notified of that reason

Mr McDaid was notified FEC was investigating his conduct at the Christmas party. Over a number of meetings between FEC and Mr McDaid in January 2016 and March 2016 it was made clear to Mr McDaid his behavior at the Christmas party was being investigated. After Mr McDaid was terminated on 17 March 2016 he was notified in writing of the reason for his dismissal.

3. Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

Mr McDaid was given numerous opportunities to respond. On the morning meeting held on 17 March 2016 he was given full opportunity to explain himself. At this meeting Mr McDaid read his version of events from a written statement he had prepared. FEC told Mr McDaid his version conflicted with other accounts and that they would respond later that day. Mr McDaid’s employment was terminated later that day on 17 March 2016.

4. Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

Mr McDaid had his support person Mr Horner, a Field Manager at FEC, present at discussions including those held on 17 March 2016, the date of dismissal.

5.  If the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal

The reason for dismissal was conduct at the Christmas party, not unsatisfactory work performance.

6. The degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal and

7. The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal

FEC designs, manufactures, and installs communication towers, powerline infrastructure and associated equipment throughout Australia and has about 60 employees. As a medium sized business with no dedicated human resource employees the procedures followed were appropriate.

8. Any other matters that the FWC considers relevant.

The FWC noted Mr McDaid’s history of aggressive behavior towards colleagues in the workplace and that the behavior at the work Christmas party was not an isolated incident. The FWC also noted Mr Davies’ behavior on the night, especially given his role as General Manager. However, the FWC concluded the fight between Mr McDaid and Mr Davies was instigated by Mr McDaid and Mr Davies was therefore acting in self-defence.

Commissioner Williams dismissed the application and held that Mr McDaid was not unfairly dismissed and that this outcome was not surprising given his behavior.

Conclusions

Mr McDaid’s case was fairly clear cut. An employee cannot harass a colleague, throw a colleague into a pool, and start a physical altercation with the General Manager causing injury without expecting consequences. While not all cases are as clear cut, employees should be aware of the kind of conduct at a work Christmas party that may form a reason for dismissal. Instigating fights with colleagues, harassing colleagues, and even failing to leave the premises when directed may constitute valid reasons for dismissal. Employees are reminded that the standard of behavior ordinarily expected in their workplace will be the standard of behavior expected at the work Christmas party.

The consumption of alcohol is not an excuse for poor behavior, even where the alcohol is provided or paid for by the employer. In certain situations an employer may be held responsible for the provision of alcohol such as where a drunk employee falls down stairs. However, alcohol consumption is not accepted as an excuse for bad behavior and certainly not physically violent behavior.

Employers should be aware that the appropriate procedures to follow in conducting an investigation and making a decision to terminate an employee’s conduct will vary depending on factors such as the employer’s size and whether the employer has any human resource capacity. Mr McDaid attended a number of meetings with a support person and was provided with a number of opportunities to respond before the decision to terminate was made.

Please be careful at your work functions this Christmas season and hopefully I won’t have to write another blog post on the same topic next year!

Work Christmas parties – a legal survival guide

Work Christmas parties can be a legal mine field for both employees and employers. The work Christmas parties of 2014 were particularly wild and resulted in the unfair dismissal case Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 (Keenan). There are a number of points both employees and employers can take from this case to ensure work Christmas parties are fun, safe and stress free.

The facts in Keenan

Mr Keenan was employed as a Team Leader on the Leighton Boral Amey Joint Venture (LBAJV) which maintained the roads in the Sydney area. He was also an AWU delegate and an elected Work Health and Safety Representative. The LBAJV held their 2014 work Christmas party on 12 December in a private function room at the Novotel Sydney Brighton Beach Hotel. Beer, wine, mixed drinks, finger food and canapés were provided by the Hotel. The Christmas party event ended at 10pm. After this time, some employees stayed on in the public area of the hotel. During and after the event, Mr Keenan engaged in conduct that resulted in a number of complaints. After hearing evidence Vice President Hatcher found that a number of incidents had occurred:

During the Christmas party

1.       Inappropriate behaviour and language towards Mr Boggan – Mr Keenan told Mr Boggan to “fuck off mate” when he tried to join a conversation.

2.       Bullying of Ms Stokes (first incident) – Mr Keenan said to Ms Stokes “All those Board members and managers are fucked, they can all get fucked. Kevin Badger is a cunt” and asked Ms Stokes aggressively “what do you even do...no seriously. Who the fuck are you? What do you even do here?” Ms Stokes was offended and walked away.

3.       Harassment of Ms Kennedy – Mr Keenan sat on a chair directly next to Ms Kennedy and “interviewed” Ms Kennedy asking her about her marital status, whether she is in a relationship, and how many children she has. Mr Keenan said “I want to ask you for your number, but I don’t want to be rejected”. Ms Kennedy was extremely uncomfortable and when a colleague came to save her from the situation she left the Christmas party.

After the Christmas party

1.       Further harassment of Ms Stokes – after the Christmas party had officially ended at 10pm a number of staff members moved to the public bar area and purchased their own drinks. Ms Stokes was sitting in the courtyard area when Me Keenan approached, spoke to Ms Stokes, moved closer and closer, and tried a number of times to touch the dimple on Ms Stokes’ chin.

2.       Bullying of Ms Cosser (first incident)– Ms Cosser was talking to Kevin Badger. Mr Keenan came over after the conversation had ended and said “why the fuck are you talking to Kevin?”

3.       Bullying of Ms Cosser (second incident) – Mr Keenan was talking to Ms Cosser in the public terrace area. Mr Keenan said “I used to think you were a stuck up bitch, but Ryan says you are alright. If Ryan likes you then you must be ok”. Ms Cosser was upset and cried by the incident.

4.       Sexual harassment of Ms O’Reilly – Mr Keenan was sitting next to Ms O’Reilly at the bar when he suddenly grabbed Ms O’Reilly’s face and kissed her on the mouth.

5.       Sexual harassment of Ms Kearns – while a group of colleagues were waiting for taxis, Mr Keenan said to Ms Kearns “My mission tonight is to find out what colour your knickers are”. Ms Kearns replied “They are white, touch my skirt and I will kill you”.  

At a meeting held on 18 December 2015 the eight allegations were put to Mr Keenan, but evidence showed that the factual content of most of the allegations was not identified in a way that allowed Mr Keenan to give an informed response. LBAJV made the decision to terminate Mr Keenan’s employment relying only on allegations regarding the sexual harassment of Ms Kennedy and the sexual harassment of Ms O’Reilly. This decision was put to Mr Keenan on the 20 January 2015. Mr Keenan had a representative from the AWU, with him for both the meetings. At both meetings Mr Keenan and his representative suggested a number of alternatives to dismissal.

Consideration by Vice President Hatcher

VP Hatcher had to decide whether Mr Keenan was unfairly dismissed. LBAJV relied on the allegation of sexual harassment towards Ms Kennedy during the Christmas function and the sexual harassment of Ms O’Reilly after the Christmas party to justify the dismissal. VP Hatcher divided his consideration of whether Mr Keenan was unfairly dismissed into whether conduct during the event could justify dismissal and whether conduct after the official Christmas party had ended justified dismissal.

1.       Conduct after the Christmas party

“Out of hours” conduct can constitute a valid reason for dismissal in specific circumstances where the conduct complained of is “of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee” (Rose v Telstra Corporation Limited [1998] AIRC 1592). Where an employer is vicariously liable for the conduct of an employee outside work hours, this creates a sufficient connection between the conduct and the employer to come within the scope of legitimate employer supervision. VP Hatcher therefore had to determine if the conduct at the upstairs bar after the Christmas party was unlawful sexual harassment for which LBAJV could be vicariously liable.

Mr Keenan’s conduct in suddenly kissing Ms O’Reilly is clearly sexual harassment within the meaning of s.28A of the Sexual Discrimination Act 1984. For the employer to be vicariously liable for sexual harassment of an employee, the employee must have done the sexual act “in connection with the employment of the employee” (s.109 SD Act). The test for vicarious liability is not a “but for” test. There must be some connection which is more than an incidental connection (Keenan [101]). VP Hatcher found Mr Keenan’s conduct in the upstairs bar was merely incidental to his employment and LBAJV were not vicariously liable, as the social interaction which occurred was not in any way organised, authorised, proposed or induced by LBAJV.

Outside of the sexual discrimination context, VP Hatcher found none of the conduct that occurred in the bar after the Christmas party would justify dismissal, as it was private conduct and there was no evidence the capacity of the second person to perform their work at LBAJV was affected.

2.       Conduct during the Christmas party

Prior to the Christmas party, employees were informed of the time boundaries (6pm to 10pm) and physical boundaries of the function and reminded that normal work standards of conduct would apply at the function. VP Hatcher found Mr Kennan’s interactions with Ms Kennedy was “a boorish attempt by a drunk to lay the foundation for a future relationship” but was not sexual harassment and not sufficiently serious to justify dismissal.

VP Hatcher found that the most serious allegation was Mr Keenan’s conduct towards Ms Stokes (“What do you even do?...No seriously. Who the fuck are you? What do you even do here?”),

as it was entirely unprovoked, aggressive, intimidatory behaviour from an intoxicated middle aged man to a much younger and smaller female. This was a valid reason for dismissal.

Although VP Hatcher found a valid reason for dismissal existed, LBAJV were not able to rely on this reason. Section 387 of the Fair Work Act 2009 lists certain factors that must be taken into account when determining whether a dismissal was harsh, unjust or unreasonable. The following factors were taken into account in determining Mr Keenan’s dismissal was unjust:

1.       There was no evidence Mr Keenan’s conduct towards Ms Stokes had ongoing consequences for the workplace including Ms Stoke’s capacity to perform her work.

2.       Mr Keenan had a good employment record in excess of seven years.

3.       Mr Keenan’s behaviour was isolates and aberrant in nature.

4.       Alcohol was an exacerbating factor: “it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at a function”. LBAJV took no steps to satisfy itself how the Hotel would discharge its responsible service of alcohol obligations. LBAJV did not place anyone with managerial authority in charge of the function, but essentially let it run itself.

5.       There were other disciplinary alternatives available other than dismissal, such as a ban from future Christmas parties and a final warning. The factual basis of all the allegations was not put to Mr Keenan.

6.       An employee who had displayed similar misconduct (saying “do you want us to get our cocks out and measure them too?” to a female employee) merely received counselling, and it was very inconsistent to dismiss Mr Keenan where the conduct was similar in nature and seriousness.

Lessons to learn – employees

1.       Attendance at a work Christmas party will usually be considered to be “during working hours”, and the employer will be able to regulate the employee’s behaviour;

2.       The same code of conduct and standards of behaviour that apply at work will be required at a Christmas function - behaviour that is not appropriate at work is unlikely to be appropriate at a work Christmas function;

3.       If you are drunk at a Christmas party and misbehave, the court is likely to favour the recollections of other witnesses over your evidence, as a drunk’s recollection will generally be unreliable;

4.        If allegations are made against you, you are entitled to procedural fairness such as having a support person with you during meetings, having the factual basis for the allegations put to you, and being given an opportunity to respond.

Lessons to learn – employers

1.       Remind staff prior to the event of the standard of behaviour expected at the event. Remind staff members that the Code of Conduct and other policies will apply. In Keenan, VP Hatcher said the fact LBAJV had made it clear that compliance with its standards of behaviour at the Christmas party was expected, was critical to ensure this standard of behaviour was later enforceable.

2.       Ensure the official start time, end time and geographical limits of the Christmas party are made known to employees.

3.       Employers should take steps to ensure alcohol will be served responsibly. If an event is being held at a hotel, employers should make inquiries and satisfy themselves of the steps the hotel will take to ensure the responsible service of alcohol. Employers should make it clear alcohol is not to be “self-serve”.

4.       Ensure someone of managerial level is at the event to be a contact person and be responsible for the event. It is not sufficient to let the event “run itself”.

5.       Complaints of employee conduct should be handled consistently. The substance of each allegation should be put to the employee, not by asking open questions but by putting the factual allegations of the complaint to the employee.

Have fun at your 2015 Christmas party, but make sure you get it right. One mistake can make the matter drag on for months. The judgment in Keenan was not handed down until 26 June 2015, six months after the Christmas party occurred. This is relatively quick for the resolution of a legal matter. Don’t let this happen to you.

Remember that this is a blog post, not legal advice. Seek independent legal advice before relying on anything in this blog post.