Anna Illingworth from Rowberry Morris Solicitors on why Christmas parties and gifts can be a headache for employers. 

 

Although we’re heading for the first Christmas in many years unblighted by Covid, employers would be wise to express caution when planning to bring their teams back together for some well-earned seasonal celebration.

It is important to not get too caught up in the festivities and remember that the Christmas party is fundamentally just an extension of the workplace, and the same rules and responsibilities apply. To protect themselves from any unnecessary employment issues afterwards, with the potential financial and reputational damage for the organisation that can follow, employers should ensure they are prepared in advance.

Christmas Parties

Despite the party taking place outside of normal working hours, and usually not within the actual workplace itself, there is still the risk that an employer could be held liable for the actions of its employees during the celebrations. Most concerning from an employer’s perspective will be the potential liability for any acts of discrimination or harassment that occur when employees get caught up with the atmosphere.

Whilst the majority will simply be intent on having a good time, where inhibitions have been lifted by alcohol, there is always the chance that some may say and do things they would never normally consider doing whilst at work. The most common form of discrimination or harassment witnessed at a typical Christmas party is of a sexual nature, but it could be on many other prohibited grounds, including race, age or sexual orientation.

Drink-fuelled aggression directed at colleagues or management is equally inappropriate and often results from the release of tension that may have built up over the year. Such behaviour could lead to claims for potentially unlimited compensation against both the employer and the employee responsible. The time and effort needed to deal with any grievance and/or disciplinary issues arising from any such incident should also not be forgotten.

Situations such as these are sadly all too familiar. The New Year often keeps employment lawyers and employment tribunals very busy as employers outline the unfortunate event(s) that occurred at their Christmas party.

To lessen the risk of becoming that client, employers should firstly recognise the potential for problems and take the following steps:

• Invites should go to everyone, including those on family-related leave, working from home or site, or absent through illness or injury. Not doing so might result in claims of discrimination.
• Where partners are invited, do not discriminate on the grounds of sexual orientation.
• Ensure that you have an equal opportunities/anti-harassment and anti-discrimination policy in place, that everyone is aware of what it includes, and that it still applies to work events outside of usual working hours.
• Tell employees to enjoy themselves and have a good time. However, remind them that inappropriate behaviour will not be tolerated and may result in disciplinary action.
• If a hired entertainer tells racist, sexist or offensive jokes and an employee feels personally attacked, marginalised or violated, it could be liable for harassment claims.
• Consider limiting the bar. It could be argued it is irresponsible to provide free alcohol to staff. Any legal action resulting from an action carried out by a member of staff aggravated by alcohol consumption could be challenging to defend if the employer was the one providing the booze.
• Consider appointing a senior, responsible employee to stay sober, monitor behaviour and step in if necessary

Christmas Gifts

Given the potential for gifts or invitations to Christmas festivities, employers must remain mindful of their potential tax implications and their liability under the Bribery Act 2010. Employers may wish to give gifts to their employees, but these should always be inclusive. For example, offering alcohol is not advisable as there will be a proportion of employees who do not drink, and would not want to be offered it.

Gifting cash should also be avoided as such gifts would still be taxable as earnings in the normal way (subject to tax and national insurance). Similarly, gift vouchers that are exchangeable for goods and services only are also taxable and as such must be reported on the employee’s P11D form. Physical gifts such as consumables or products are usually preferable, and as long as less than £50 per person is spent, will not usually be taxable.

Employees can also be given gifts by third parties, resulting from the relationships they have built during their employment. So long as the gift doesn’t exceed £250 in cost, it should not be taxable for the employee. For businesses that wish to thank their clients for their ongoing support, a meal at a reasonably priced restaurant may be most appropriate. Or give practical gifts, such as calendars and branded pens, as these are unlikely to be misconstrued as anything other than a kind gesture.

It is an offence to bribe another person or be bribed under the Bribery Act 2010

Bribery is where someone seeks to dishonestly persuade another party to act in their favour by inducement. This is typically by offering money or some other gift of value. Specific offences concern bribing a foreign public official or commercial organisations failing to prevent bribery. Bribery offences can be committed in the UK or overseas and are effectively strict liability offences.

Commercial organisations can have the defence of having ‘adequate procedures’ in place to prevent any instances of bribery and corruption. The Ministry of Justice published guidance about the policies and procedures that commercial organisations should introduce and has set out six core principles to underpin any policy. As such, all organisations, irrespective of their size, should train all employees on bribery and corruption policies, along with what is and isn’t acceptable. An anti-corruption code of conduct should be made available on the organisation’s website and be regularly reviewed to ensure documentation is fit for purpose.

Liability will arise from both offering and receiving a bribe. However, although the Bribery Act 2010 takes a tough stance on corruption, it is not intended to prevent hospitality or gifting. To prevent any misunderstandings causing issues, it’s wise to be reasonably and proportionately generous, especially around Christmas time. It is quite different if a supplier wants to wine and dine a customers’ procurement manager at an exclusive resort in the sun to secure their business than it is to toast a successful year over a spot of lunch; one is quite obviously bribery and is highly illegal.

Anna Illingworth is a partner in the employment team at Rowberry Morris Solicitors. With over 15 years of specialist employment experience, Illingworth regularly advises employer clients concerning contentious and non-contentious matters.