Sobering thoughts

Sobering thoughts

Your company's Christmas party should be a time of celebration. Here are tips to avoid a hangover that lasts longer than the next morning.

Your company's Christmas party should be a time of celebration. Damian Ward offers tips to avoid a hangover that lasts longer than the next


QUESTION: I manage a team comprising 17 IT professionals and have been

given the job of organising the Christmas party. My plan is to take

them on a pub crawl. We have been provided with a budget by the bean

counters. I went to a seminar a couple of years ago where the

presenter was speaking about the risks of mixing alcohol and

employees. He said it was always prudent to try and disassociate work

functions from drinking. While I am sure that my staff will have a

good time, I want to make sure I don't get them (or myself) into

trouble. What are the rules in these circumstances?

ANSWER: Alcohol, employees and the silly season can be a bit of a

toxic cocktail. While many businesses still have Christmas parties in

which people drink to excess and behave with varying degrees of class,

they are a source of consistent management concern.

In the litigious environment in which we live, there are many and

varied risks in combining alcohol, employees and the festive season.

The greatest risk comes from the drinkers who are either too friendly

with anyone and everyone or those who become belligerent and possibly

violent when they have too much.

The law provides that unwanted attention is simply that. There is no

test of robustness or "most people would see that as all right". A

member of staff punching another, or a patron of the establishment

that you are in, is self-evidently bad.

The amorous affection of one employee to another when the recipient of

the ardour wishes the other person would stop is just as bad. Any form

of conduct that is suggestive in any way, and makes the recipient feel uncomfortable, is

a potential breach of the law. The threat can be physical, emotional

or psychological.

What one person thinks is perfectly fair and appropriate conduct may

be considered excessive, gratuitous and deeply offensive to another.

Adding further to your challenge is the fact that you do not

necessarily know how each member of your team will behave in an

out-of-work context. I have observed people with reserve and

discretion in the office go nuts when they have a couple of drinks in

a more relaxed environment.

The pub crawl is not necessarily a bad idea. However, as the senior

member of staff present, you will need to stay sober and be alert to

any risks that may arise. You will be expected to be the one who

ensures that the business is not the target of discrimination or other

claims arising from the function.

The liability issues are extensive, spanning from fines on one hand to

damages liabilities on the other. The key message is to be careful. A

good idea might be to set a time when the function ends. Make it clear

to those who are attending that the bar tab (if you are running one)

will be closed at a set time and then the function ends. This will

diminish risk.

It is also appropriate to ensure that the service of alcohol is

monitored, preferably by someone trained to do so. An employee who is

obviously affected by alcohol should be refused further service.

Be rigorous about this. Sometimes the spirit overtakes those who are

running the night and things are allowed to move into a danger zone,

albeit with the best intentions. At the end of the function, make sure

that you have thought about how employees can access transport to

safely travel home. If the budget permits, you might consider hiring a

minibus to help ferry the team home. Don't let any member of staff who

has consumed a great volume of alcohol drive.

The simplest rule is that there is very little latitude in conduct

that is unwelcome. Keep your eye on any employee who looks to be

getting you in trouble. It might not make for the night of your life

but hopefully you will have the morale spike you want and avoid a

prospective harassment claim. Bear in mind that for some employees the

demon drink makes them either Dr Jekyll or Mr Hyde.

QUESTION: Earlier this year I retained a contractor to do some sales

and marketing work in my small software sales business. He was highly

recommended by a friend. The guy was a disaster. I paid him a mix of

salary and commission. None of the commission was paid because he made

no sales. Worse than that, he alienated a number of my important

customers and I struggle to retain their business in an

ultra-competitive market. I want to sue. He has caused me a huge waste

of time in seeking to save relationships that, but for his idiocy,

would not have been damaged. I also think I lost a couple of clients,

given the way he behaved. What claims do I have?

ANSWER: As a legal matter it is important whether it was an

"independent contract" or an employment contract. Different

consequences flow from each. A contract between you and an independent

contractor will generally provide you with wider latitude to sue. An

employment contract is a much more difficult beast given the subtly

different legal principles involved. It can be tough to sue an

incompetent, negligent or unsatisfactory former employee.

There is no easy litmus test you can apply to a contract to discern

what kind of agreement it is. You'll need to go to an expert lawyer in

this area to obtain advice as to which type of contract is relevant.

What obligations does the contract impose upon the contractor? Were

there key performance indicators or benchmark standards of behaviour

or professional performance?

The final stage is seeking to identify whether you have a viable claim

in damages or loss. Not all forms of damage are recognised by the law.

Depending on the terms of your contract, damage to the relationship

you have with clients or customers is not a matter that the law will

generally recognise as being compensable. It is extremely difficult to


It may also be very difficult to prove that the employee's conduct is

the predominant cause of the client no longer seeking your services.

While you know why the client has gone elsewhere, it may be difficult

to prove that the conduct of the contractor caused this. You would

probably need to seek the assistance of the former client to provide

you with evidence that they would have continued to use the services

provided by your business if it wasn't for the contractor's conduct. A

former client in these circumstances, no matter how well-meaning they

are, is likely to think: "this is not my fight, I am better off out of


Generally, a court won't simply infer that clients left because you

complain about a contractor. And the contractor will vigorously deny

that they caused the breakdown of a key client relationship for you.

The quantification question is important. On the assumption you can

establish that the conduct of the contractor was the reason that the

client left, you will then need to prove what your actual loss is.

This may be done in part by extrapolating sales figures or profit from

that particular customer for the period leading up to the termination

of the relationship. Again, this is never easy and always contested.

The ultimate question is practical: does the contractor have any money

or assets? Having the world's strongest case is essentially

meaningless if a verdict is not satisfied because the person whom you

sued has no money to pay up.

You may have a good case. However, I see some significant hurdles for

you to jump. It may be best to start at the last point made above -

does the contractor have any money or assets? This, put bluntly, will

help you avoid a litigant's worst nightmare. Get good commercial

advice early. It may not be what you want to hear, but it may save you




Damian Ward. Damian Ward is a partner with HWL Ebsworth Lawyers and

specialises in technology law and intellectual property. He is author

of the Contract Negotiation Handbook. Questions can be sent to:

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