As the festive season approaches, employers should consider whether they may be held responsible for the actions of their employees at the inevitable social events that will take place.

In December 2016 we reported on the case of Bellman v Northampton Recruitment Ltd which held that the Company was not vicariously liable for an assault at the Christmas after party as it was too far removed from employment.

That decision has since been overturned.

Background

An employer will usually be vicariously liable for the actions of an employee if the employee in question is acting in the course of their employment.

One area of uncertainty for employers is whether social events with colleagues outside of the workplace would be considered to be in the course of employment.

The well-established test is whether the action is ‘so closely connected with the employment’ that it would be fair and just to hold the employer vicariously liable. The difficulty is applying that test to each individual situation.

Facts of Case:

Northampton Recruitment Ltd was a small HGV driver recruitment company. The managing director was Mr Major. Mr Bellman was a childhood friend of Mr Major’s and had been recruited as a sales manager.

In 2011 the Company hosted their Christmas party at a golf club. All staff and partners were invited totalling a group of 24. After the party half of the guests, including Mr Major and Mr Bellman, went onto a hotel for drinks. This was an impromptu drink, not a planned extension of the party. The Company paid taxi fares for all guests and accordingly paid for taxis to the hotel.

Most of the group present continued to drink alcohol and whilst the conversation was initially on social topics it turned to work matters late in the evening. The conversation turned to a controversial issue of where a newly appointed employee ought to be based and Mr Major lost his temper. He lectured the employees present on how he owned the company and he made the decisions. He then punched Mr Bellman twice and caused him severe brain damage.

Mr Bellman subsequently brought a claim for damages against the company on the basis that it was vicariously liable for Mr Major’s conduct.

Previous Decision:

The High Court held that the company was not vicariously liable on the basis that the incident had arisen in the context of ‘entirely voluntary and personal choices’ by those present to engage in a heavy drinking session leading to an insufficient connection between Mr Major’s role as managing director and the assault.

This decision has since been overturned.

Court of Appeal Decision:

The Court of Appeal held that the company was vicariously liable for Mr Major’s actions.

In reaching that decision it established a two stage approach to considering whether the action is ‘so closely connected with the employment’:

  1. Consider what are the functions or field of activities entrusted to the employee; and
  2. Consider whether there was sufficient connection between this job and the wrongdoing.

Functions entrusted to the employee:

It was held that it would be too narrow to focus solely on what an employee is expressly authorised to do in determining the nature of their functions and duties.

Instead, one should consider the field of activities assigned to an employee in a broad sense and look at the matter objectively, taking account of their position within the company.

Having established that Mr Major’s job had a wide remit, the Court then considered whether there was a sufficient connection between Mr Major’s job and the assault.

Sufficient Connection:

The Court held that the drinks had to be seen against the background of the evening’s events; the drinks occurred on the same evening as the work event paid for and arranged by the managing director.

Mr Major chose to wear his ‘metaphorical managing director’s hat’ and deliver a lecture to his subordinates.

He was asserting his authority in the presence of around half of the company’s staff and misused that authority.

In light of these factors there was a sufficient connection and the company was, therefore, vicariously liable.

Conclusion:

Each case will turn on its specific facts and the judges were keen to emphasise that the facts of this case were unusual and the crucial factor being Mr Major’s seniority in a relatively small company and his explicit assertion of his authority in this capacity.

Employers should be mindful that in light of this case it appears that a senior manager is more likely to be found to be acting in official managerial capacity even at social occasions when more junior employees might be considered to be off-duty. As such vicarious liability will more readily arise.

This is not a reason to cancel your Christmas parties. Employers should simply remind employees and particularly senior managers of the standards of behaviour expected at such events. The pre-party guidance should remind employees that excessive alcohol consumption, engaging in fighting, threatening or discriminatory behaviour or any other untoward conduct may be dealt with under the disciplinary policy.

If you have any questions regarding the content of this article, please contact Rachel Mathieson, Associate in the Employment department


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Rachel Mathieson

Associate

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+44(0)20 7551 7608

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r.mathieson@bwbllp.com
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Posted on 13/11/2018 in Legal Updates

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