Employment: I saw Maureen kissing Santa Claus

We've had our first snow, so Christmas must be just around the corner. If you're an owner or manager of a pub or restaurant, you may be planning your own staff Christmas party, where everyone can let their hair down and have a good time. But in this increasingly litigious age,

what are the pitfalls that you as an employer need to guard against?

Just having a good time…​

The staff Christmas party should be a time when colleagues can go out and enjoy each others' company and have a few drinks. Problems occur when comments or gestures are made which, while innocently meant, may cause offence. What if Maureen fancied a quick snog with Derek under the mistletoe, but Derek was rather more mindful of his wife and kids and declined the offer? If Maureen were Derek's line manager, just imagine the consequences if she later decided not to consider Derek for a promotion…

And if you think you can avoid any liability by cancelling the Christmas party, think again. As an employer will be held liable for its employees' actions done "in the course of employment", there is still the possibility that a gathering of colleagues, even one that has not been expressly organised by the employer, may come within that meaning.

What can go wrong ​

For a start, you may have to discipline employees for inappropriate behaviour at the party, or afterwards. Employers can be liable for a criminal offence under the Misuse of Drugs Act 1971 if they had knowledge of illegal drugs being used or distributed on their premises. Other typical misconduct includes violence and fighting, and harassment of employees and third parties (such as waitresses at the party venue).

The next day, your worries may not be over. You may have to deal with unauthorised absences, where employees fail to turn up without giving a reason, nursing their hangovers.

It's always worth checking your employees' favourite social networking site to see whether they have posted an entry that morning - a surprising number of people do seem to want to tell the world that they are "pulling a sickie" (even if they give some legitimate reason to their employer). Any such incident should be treated as serious misconduct.

You also have the problem of how to deal with complaints or grievances from employees who believe that they have been harassed. What if Derek complains that Maureen pinched his bottom underneath the mistletoe? You will need to be prepared to investigate complaints, interview witnesses, meet with the employee concerned to discuss their complaint and reach a written conclusion. You then have to give the complainant the right of appeal against the decision if they are not happy with the outcome.

New Year hangover​

For the employer, the hangover can last well into the New Year. A victim of harassment at the Christmas party who is dissatisfied by his or her employer's response, and who believes that he or she has been harassed on certain protected grounds can bring an employment tribunal claim under discrimination legislation.

For such a claim to succeed, they would need to show that the harassment was on one of the following grounds: sex, race, disability, religion or belief, sexual orientation or age. If their claim did not fit into one of these grounds, they could still resign and claim constructive unfair dismissal.

Office Christmas parties can therefore be very expensive, as one employer found out. In X v R1 and R2, R2 made numerous comments to X such as calling her a 'useless woman', saying that she 'needed a good man' and that he would like to try her out in bed. The matter came to a head at a Christmas dinner-dance when R2 pulled X's dress down at the front and made disparaging comments. X was successful with her claim for sexual harassment and was awarded £10,000 for injury to feelings.

If you are faced with such a complaint then disciplinary action will need to be taken against the offending employee.

Currently, the statutory dismissal and disciplinary procedures remain in force, although these will be replaced next year. These require employers to carry out a three-step procedure (inviting the employee to a disciplinary meeting; holding a meeting and reaching a decision; giving the employee a right of appeal).

If this procedure is not followed then the employee who is dismissed will have an automatic unfair dismissal claim, which could give rise to an uplift of up to 50 per cent on top of any compensation awarded.

Employers should think carefully about choosing to dismiss rather than giving a verbal or written warning. Dismissal could lead to an unfair dismissal claim if the misconduct in question is not considered by an employment tribunal to be sufficiently serious to justify such an action.

How can employers best protect themselves from liability?​

Draw attention to your organisation's equal opportunities policy and anti-harassment policy before the Christmas party. If you don't have these policies already, put them in place now and make sure you tell your staff about them.

You also need to enforce the policies, which means not turning a blind eye when the transgressor is one of the senior management team.

What else should you do?​

Have in place an effective disciplinary and dismissal procedure that sets out what is considered gross misconduct entitling the employer to summarily dismiss - for example, violence or drug-taking. Treat complaints on a case-by-case basis and consider any mitigating factors. Treat them seriously and follow your organisation's grievance procedure.

Encourage responsible drinking. This might mean not having an open tab behind the bar, but instead setting a limit and sticking to it.

And if all else fails, keep a beady eye on Maureen and steer her away from the mistletoe and, most of all, from Derek. n