Why Work Christmas Parties Still Carry Legal Risks

 

Summary Points:

• Work Christmas parties are still “work.” Employers remain legally responsible for staff conduct and safety, even at off-site or after-hours events.

• Legal obligations continue to apply. Employers can be liable for incidents involving harassment, discrimination, or injury occurring during or around the event.

• Preparation prevents problems. Clear policies, staff reminders, responsible alcohol service, and designated supervisors help reduce risk.

• Good planning protects your business. With the right precautions, you can celebrate safely while meeting your Work Health & Safety and Fair Work obligations.

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The holiday season is a chance for teams to unwind, celebrate success, and build connection. But while festive in spirit, Christmas parties aren’t a “law-free zone.” As an employer, you continue to carry legal obligations—and may incur liability—if things go wrong. This guide outlines key legal considerations and practical steps every NSW business should take before hosting a Christmas party.

The countdown is on as we head into the festive season.

 

Why it Matters: The Legal Risks

Even though a Christmas party might take place off-site or after hours, courts and regulatory bodies often treat it as an extension of the workplace. That means:

• Your Work Health & Safety (WHS) duty of care continues to apply.

• You may be vicariously liable for misconduct by employees (e.g. harassment, bullying) during the event.

• The Respect@Work and related discrimination/harassment laws require reasonable measures to prevent prohibited behaviour.

• If misconduct leads to disciplinary action (or termination), you must follow fair process.

• Liability can extend to accidents or harm during or traveling to/from the function.

 

So what do you need to do to ensure everyone has a great time, and you can ensure your business is covered?

 

Pre-Event Checklist: What to Put in Place Before the Party:

Policies & Communication:

• Ensure workplace policies on bullying, harassment, discrimination, and general conduct are current and accessible.
• Issue a reminder that the Christmas party is a work-related function and that all policies apply.
• Clarify start and end times, and that behavior outside these times is not sanctioned.
• Remind staff of the social media policy.

 

Venue & Logistics:

• Choose a venue that is safe, accessible, and appropriate.
• Conduct a site inspection to identify hazards.
• Ensure compliance with Responsible Service of Alcohol (RSA) requirements.
• Provide food as well as drinks, and plan safe transport options

 

Supervision & Monitoring:

• Appoint sober supervisors to monitor behavior and step in if necessary.
• Establish escalation protocols for handling incidents.
• Consider drink caps, coupons, or timed limits.

Staff Briefing & Expectations

• Brief staff on behavioral expectations.
• Explain that misconduct will be treated seriously, even at the party.
• Remind employees that attendance is voluntary.

 

Record-Keeping & Procedures

• Document planning decisions, risk assessments, and staff communications.
• Prepare for prompt investigation of any incident.
• Ensure disciplinary procedures are clear and fair.

 

Tips & Best Practices

• Keep the event modest—smaller groups are easier to manage.
• Timebox the event with a clear start and finish.
• Promote inclusivity with non-alcoholic options and diverse food choices.
• Use ‘soft closing’ signals like music winding down.
• Follow up after the event for feedback and any required investigations.

Conclusion

A Christmas party can be a highlight of the year and a morale booster for staff. With careful planning, clear communication, and appropriate supervision, you can celebrate successfully while meeting your legal obligations. Treat the party as a work function, not a legal vacuum, and you will protect both your team and your business.

 

A few cases to ponder below:

In the case of Paul Brown v Aristocrat Technologies Australia Pty Ltd [2005] AIRC 656.

• An employee who urinated over a restaurant balcony onto other people who were dining on the ground level at his work Christmas party. The employee was dismissed for misconduct and subsequently lodged a claim for unfair dismissal in the Australian Industrial Relations Commission (AIRC), which was unsuccessful.

 

McCoy v State Super Financial Services Australia Ltd.

•  In this matter, the worker, Ms McCoy, suffered an injury to her right ankle on her way to her work Christmas party. Ms McCoy and her husband had booked a hotel near the Christmas party to avoid a long trip home and on their way to the party, the worker fell on a raised paver on the public footpath and then returned to her hotel room. Whilst McCoy’s injury did not occur at her usual place of work, or even the actual Christmas party, she was still covered by Workers Compensation insurance.

 

Victorian Employers’ Chamber of Commerce and Industry.

• An employee who was injured by a propeller after being pushed off a pontoon boat at a Christmas party. The employer was subsequently found liable for the injury caused.

 

Streeter v Telstra Corporation Limited [2007] AIRC 679  and Streeter v Telstra Corporation Limited [2008] AIRCFB 15; (2008) 170 IR 1

• An employee who had sexual intercourse in front of other employees in a hotel room, which was booked by a group of employees, after the end of a work party. The employee lodged an unfair dismissal application after her employment was terminated. The AIRC held that the employee’s conduct was not so serious as to warrant the termination of her employment and ordered that she be reinstated in a similar position in another store. However, the Full Bench of the AIRC overturned the decision to reinstate the employee, principally on the basis that despite the inherently personal nature of her activities, she failed to answer questions concerning her conduct honestly during her employer’s investigation, which destroyed the relationship of trust and confidence and provided a valid reason for her dismissal.

 

Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156.

• An employee who told his boss to “f*** off” at a work Christmas party and engaged in sexually inappropriate behaviour towards multiple female colleagues when the party moved onwards to a public bar area, after being served unlimited drinks, which were paid for by his employer. After being dismissed, the employee lodged an unfair dismissal claim and the Fair Work Commission (Commission) found that in the context of the employee’s near-perfect employment record and his state of intoxication, the dismissal was unfair. The Commission held that the manner in which alcohol was served at the event was a significant exacerbating factor, as there was unlimited service of alcohol and no managerial supervision of the consumption of the alcohol.

 

McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343

• Mr McDaid, who engaged in a series of unsatisfactory conduct at his employer’s Christmas function. Specifically, an intoxicated Mr McDaid:
  • repeatedly harangued a fellow employee, Mr Sinna, in an aggressive manner, repeatedly pushing or poking him on the chest;
  • subsequently pushed a fully clothed Mr Sinna into a swimming pool;
  • later refused to leave the business premises when directed to do so; and
  • initiated a fight (throwing a number of punches) with Mr Craig Davies (General Manager) by twice pushing him with such force that on the second occasion he lost his footing and crashed into the ground and a gate suffering minor injuries.

He was dismissed from his employment with Future Engineering and Communication.

Mr McDaid later filed an application for unfair dismissal and the Commission held that the above conduct formed a valid reason for Mr McDaid’s dismissal. The Commission also determined that the process followed by Future Engineering and Communication was fair and reasonable and therefore Mr McDaid’s application was dismissed.

 

Sione Vai v ALDI Stores (A Limited Partnership) [2018] FWC 4118.

• An employee who was intoxicated at a work Christmas party and threw a glass of beer near a security guard after claiming that a bartender made a racial slur towards him. The employer’s decision to dismiss the employee was upheld by the Commission, which noted that the employer sought to have appropriate limits on the service of alcohol.

 

Need advice on handling your polices? Contact Coutts Lawyers & Conveyancers to speak with an employment law specialist.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication

 

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