Potential Liability for Employers for Employee action after Staff Parties

A group of employees, including a director, carried on drinking in a hotel room after their works Christmas party. The taxis to the hotel and the drinks were paid for by the company.

The employees started talking about work and there was a disagreement about how a particular situation at work had been handled. The director took offence and made everyone listen to him while he gave them a lecture about his authority. When one of the others still questioned the decision the director hit him. Tragically, the punch caused brain damage.

The injured employee claimed the employer was vicariously liable for the director’s actions – ie the employer was responsible for the director’s actions and was therefore liable to compensate the injured employee because the director had been 'acting in the course or scope of his employment’. The employer denied this, saying the drinking session was a private affair, taking place after the official function was over. The court found that the participants in the drinking session had attended the Christmas party qua staff and managing director.

The court ruling was that the director’s punch was thrown in the course or scope of his employment at the after-party because:

• he was a director;
• he had been standing on his authority as a director, and behaving like one by telling staff what to do at the time; and
• payment for the taxis and drinks had been treated as work expenses.

There was therefore a sufficient connection between his job and what he had done for the employer to be vicariously liable.

However, one of the judges was keen to emphasise how unusual the facts in this case were and how limited will be the parallels to this case.  The court had regard in particular to the fact that the director, as well as being the managing director, was also the “directing mind and will of this small company”.  

‍