Management Liability – Beware of the Office Christmas Party

The end of the calendar year brings around the annual holiday season celebrations for most offices. These celebrations can be a great way for colleagues to get together and reflect on the year that was and the holiday activities ahead.

Businesses may opt for different ways to celebrate the holiday season from in-office gatherings to lunches or dinners at restaurants, small private parties at a venue to huge corporate functions. One thing all these events have in common is that they’re a work function and the same etiquette is required from attendees as a normal day in the office. Staff may also choose to attend an unofficial “After Party” once the official celebrations have ended. They must remember that the rules and company core values are still in effect even at the unofficial after-party. This is applicable for all staff from CEO’s and Directors, HR, Managers and staff/team members.

At all times we must adhere to our company’s core values and be respectful. On occasion, individuals may see the annual office holiday party as a chance to let off some steam, vent their frustrations, or even confess romantic feelings for a colleague. All of these situations can be deemed as inappropriate and lead to some very serious repercussions not just for the individuals, but also managers, senior staff and the business itself.

Allegations can be made and need to be acted on in a timely manner. If a staff member has a complaint about situations that occurred at a work function – including after-hours events, the business must take action to investigate this situation and all parties involved. Businesses must also ensure they are providing a safe environment for the staff to celebrate and ensure that food and water are supplied and suitable transport is available.

These are areas where our Management Liability (ML) product can assist. With automatic extensions including Workplace Health and Safety Costs, Employment Practices Liability Entity Coverage, Third Party Discrimination or Sexual Harassment Entity Coverage and Employee Theft & Third Party Crime, just to name a few, are all clauses that can respond to assist businesses with the costs and stresses associated with employee complaints.

If you’d like more information about how our Management Liability Insurance product will be suitable for your clients, please contact your local underwriter.

If you are looking to attend the end of year celebrations, always remember to keep your best behaviour in the back of your mind and respect the people around you.

Claims Example

Employee of a legal arm to a large financial advisory group had a pattern of engaging in misconduct at work functions due to intoxication. The insured issued multiple verbal and formal warnings to her and placed her under performance management including instructions not to consume alcohol at work events.

As it happened, under performance review further evidence was gathered on the claimant with regard to gossiping and a combination of other various ‘misdemeanours’.

The claimant lodged an unfair dismissal claim, alleging that she was constructively dismissed. With regard to the misconduct at events, she also alleged that the firm has a culture that encouraged this sort of behaviour, including alcohol and illicit substances – there was sufficient evidence to provide her a strong case.

This again speaks to the importance of both procedural fairness and otherwise robust HR practices that might prevent such ‘cultures’ from existing in the first place.

Berkley Insurance Australia is a registered business name of the Australian branch of Berkley Insurance Company (ABN 53 126 559 706). Berkley Insurance Company is authorised by the Australian Prudential Regulation Authority as a general insurer to conduct new or renewal business.

The information and opinions contained in this document are general in nature. You should consider what insurance is appropriate for you or seek independent insurance advice.