EOFY Celebrations and Employment Law Risks

As the end of the financial year comes around, many organisations mark the occasion with EOFY parties, client functions and celebrations. Some Human Resource departments circulate reminders to staff to “behave yourself” at workplace end-of-year functions. 

Despite EOFY functions often occurring outside ordinary work hours and involving alcohol, often purchased and supplied to staff by the bosses and colleagues, employers still have clear legal obligations to set appropriate boundaries and ensure the safety and wellbeing of their staff at such events. Employers can, in many circumstances, be held legally responsible for the actions of employees and for incidents that may occur at these events.

Last December, a senior executive at NAB’s digital banking arm, Ubank, was dismissed after participating in a mock terrorism hostage scene staged for a photograph at the work Christmas party, an incident that ended up in the newspapers. While that conduct occurred during the festive season, the same legal risks arise at EOFY celebrations and other work-related events where fun and “off-duty” attitudes can mix.

So what are the legal risks for employees attending EOFY parties, and for employers hosting those events?

Vicarious Liability for Employee Conduct

Vicarious liability for harassment and discrimination can extend beyond the traditional workplace setting to include various work-related activities. This encompasses employer-organised events such as seminars, conferences, and training sessions, as well as social functions like EOFY gatherings. Additionally, liability can arise from conduct during business or work-related travel. Employers may also be held responsible for harassment carried out through electronic communications such as emails, social media posts, or text messages, where the behaviour can be connected to the employment context.

As companies celebrate the close of the financial year, it is vital for employers to recognise their positive duties and supervisory responsibilities and foster a respectful, inclusive environment at all workplace-related events, including holiday celebrations.

Safety and Duty of Care

An employer’s duty of care towards their employees extends to Christmas parties and other workplace functions. To uphold this duty of care, employers may need to take steps including implementing measures such ensuring intoxicated staff have transport home and monitoring for general hazards.

Party Planning Goes Beyond Food & Drink

It is advisable for employers and HR departments to distribute codes of conduct and other workplace policies to employees prior to workplace-related social events, reminding staff members of expectations around alcohol consumption, safety and general behaviour. Employees should be clearly informed of their responsibilities and the standards that apply, even in social settings.

The Australian Human Rights Commission statistics for 2022 state that more than one in six (15 per cent) incidents of sexual harassment in Australia occur at work-related social events. 

Since late 2022, Australian businesses have been subject to a legal duty to take preventative action against unlawful conduct, including sexual harassment, rather than responding only after an incident occurs. This obligation, known as ‘positive duty’, was introduced into the Sex Discrimination Act 1984 (Cth) in December 2022. It applies to ‘persons conducting a business or undertaking’ and ‘employers’ (as defined in the SD Act). These duty holders are referred to as ‘organisations and businesses’. The positive duty requires organisations and businesses to take ‘reasonable and proportionate measures’ to eliminate sexual and sex-based harassment and discrimination in a work context.

Potential for Unfair Dismissal Claims

Potential for unfair dismissal claims is another risk for employers during the festive season. When employees are disciplined or dismissed for conduct at a work function, they may be more likely to challenge the decision if they consider that a particular incident occurred because an employer provided generous amounts of alcohol and failed to set clear standards of behaviour. The risk may be higher where expectations about intoxication, respectful conduct and “after-parties” were vague or not communicated to employees at all.

Reputational Risk and Media Scrutiny

With the fast-paced cycle of social media, both employers and employees should be mindful that photos and videos posted online can be quickly circulated, and this can sometimes result in photos or videos being picked up by the media, which can result in reputational harm. For example, government departments, banks and other companies have been previously criticised in the media for hosting lavish parties during difficult economic times, particularly when their customers feel they have been overcharged, treated unfairly or have experienced poor service. Smartphone cameras mean that every move can be captured and, after a few drinks, posts of party behaviour can spread or be misconstrued in the press. To mitigate these risks, employers should establish clear social media policies before events and consider whether the scale and nature of celebrations align with their organisation's public image and current stakeholder sentiment.

It Can Still Be Fun!

While all this may sound as though the fun police have taken over EOFY, the reality is that having sensible protocols in place is wise. Employers are not expected to turn workplace events into joyless, over-zealous affairs. The aim is simply to create an environment where everyone can enjoy themselves safely and respectfully. Team celebrations bring colleagues together and reflect an organisation’s appreciation of its people, not lead to disputes, litigation or unwelcome media attention. Finally, common sense, coupled with awareness of legal obligations, means marking achievements can stay safe for everyone involved.

The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.