Tag Archives: Labour & Employment

How Can An Employer Avoid A Nasty “Hangover” From The Company Holiday Party?

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As the holiday season approaches, so do the holiday parties. Some extra planning and precaution is prudent to ensure this year’s holiday party is a safe and enjoyable event for all staff. As such, if alcohol is served at this year’s holiday party, employers should be particularly alert to the risks associated with serving alcohol to employees.

An employee who drives impaired after drinking at a company holiday party poses a risk of foreseeable harm, not only to him/herself, but also to the general public. Except in Quebec, employers may be liable for losses suffered by third parties such as passengers and other road users in the event of a car accident caused by an impaired employee.1 Therefore, if adequate steps are not taken by an employer to ensure employees get home safely, an employer may be liable not only for injuries suffered by an employee who drives home impaired, but also for the injuries suffered by third parties, such as passengers and other road users.

Employers held liable

In the seminal case Jacobsen v Nike Canada Ltd.,2 Jacobsen, an employee of Nike Canada in British Columbia, successfully sued the company for severe injuries he sustained as a result of driving impaired after drinking beer with his supervisor and co-workers while at work. Nike was held liable for a significant portion of the $2.7 million in damages assessed.

In that particular case, Jacobsen’s supervisor supplied a cooler of beer to employees during working hours. The court held that Nike Canada breached its duty of care to Jacobsen by providing alcohol in the workplace, not monitoring its consumption and taking no steps to prevent Jacobsen from driving impaired. The court further held that an employer cannot escape liability merely because the worker shows no visible signs of impairment. While the case involved the provision of alcohol during working hours, the same reasoning applies to a workplace function where alcohol is served to employees.

In a more recent decision, Hunt v Sutton Group Incentive Realty Inc.,3 the employer was held partly liable for over $1 million in damages for injuries sustained in a car accident by an employee who drove home impaired after consuming several drinks at the company’s Christmas party. The court held that the employer did not discharge its duty to ensure the employee got home safely. The decision was later overturned by the Ontario Court of Appeal as a result of the trial judge’s direction to the jury in this case; however, the Court of Appeal did not overturn the court’s reasoning that the employer could be held liable for the injuries sustained by the employee in a motor vehicle accident.

These cases confirm that an employer may face significant costs if protective measures are not put in place to reduce the risks associated with serving alcohol at company events.

In addition, drinking may increase the likelihood of inappropriate or unwelcome behaviour. While a holiday party is a social event, an employee’s right to have a “work environment” free of harassment extends to off-site company sponsored events and may include events not officially sponsored by the company (for example, a manager taking a group of employees out for drinks). An employer may face a human rights or health and safety complaint from an employee who was harassed at a company social event.

Tips for employers

The following precautionary steps may be taken to reduce an employer’s risk of liability:

  • Provide transportation or taxi vouchers to party guests and ensure they are advised of their transportation arrangements well in advance of the party, to ensure employees leave their cars at home;
  • Host events at a hotel or restaurant where a licensed commercial host will be primarily responsible for providing qualified staff to serve and monitor alcohol consumption. Ensure the commercial host has its own liability insurance. Holding a social function at a commercial establishment will not necessarily discharge an employer from its duty of care, but it will enhance control over alcohol consumption and enable an employer to potentially reduce legal liability;
  • Restrict and monitor the amount of alcohol consumed by each guest. For example, use a drink voucher system or hire a licensed bartender rather than offering a self-serve bar, close the bar at least one hour before the planned end-time of the activity and make non-alcoholic refreshments freely available;
  • Assign supervisors and managers to monitor the festivities during the event and enable them to “cut off” alcohol service or require an employee to take a taxi home;
  • Ensure food is also served when alcohol is being served;
  • Encourage employees to drink responsibly and remind them that drinking and driving is illegal;
  • If there is reason to believe an employee intends to drive home impaired, take away the employee’s keys and call him or her a taxi;
  • Arrange for host liability insurance coverage.

With these thoughts in mind, we wish you happy holidays and safe celebrations this year.

Footnotes

1. Quebec’s legislative regime provides that any person who suffers bodily injury in an automobile accident will only be compensated by the Société de l’assurance automobile du Québec regardless of who is at fault.

2. (1996) 133 D.L.R. (4th) 377 (B.C.S.C.).

3. (2001) 52 O.R. (3d) 425 (Ont. S.C.).

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UK Update On Holiday Pay – Implications For Employers In The Construction Industry

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The Employment Appeal Tribunal rules that holiday pay should include overtime, but employers gain some relief as the scope for back pay claims is restricted

The UK Employment Appeal Tribunal (EAT) has handed down its decision in the conjoined cases of Bear Scotland Ltd and ors v Fulton and ors; Hertel (UK) Ltd v Woods and ors; Amec Group Ltd v Law and ors.

The position in the UK had been very clear for many years. Workers with normal, basic working hours under their contract have had holiday pay calculated using just those basic hours and basic pay. Overtime pay has not been included. This was confirmed as the correct approach about ten years ago by the Court of Appeal (Bamsey and others v Albon Engineering and Manufacturing plc [2004] IRLR 457) so employers had a high level of comfort that basic pay is the correct approach for holiday pay.

The European Court of Justice (ECJ) in British Airways plc v Williams and Others [2012] ICR 1375 said that holiday pay needed to include “normal remuneration”, which includes payments “linked intrinsically to the performance of the tasks which the worker is required to carry out under his contract of employment”.

Earlier this year, the ECJ (Lock v British Gas Trading Limited and others (C-539/12)) held that holiday pay needed to include commission payments. It didn’t explain how businesses are supposed to do that, and the case has gone back to the UK tribunal to be heard in February.

The EAT has now decided that overtime needs to be included in holiday pay, even though it means that the UK Working Time Regulations have to be interpreted in a different way from how they were by the Court of Appeal in the Bamsey case ten years ago. The EAT decision has been reached because of the need to comply with the European Working Time Directive, as interpreted by the ECJ. Mr Justice Langstaff, in delivering his decision, refused to refer the case to the ECJ on the basis that there was no need – the European position is clear.

The decision applies only to the four weeks’ holiday per year that the European Working Time Directive requires, not the additional 1.6 weeks that are given under the UK rules – and also not to any additional contractual holiday employers may offer.

There were fears that the decision could mean claims against employers for a shortfall in holiday pay going back many years. The EAT has said that claims for back pay can only be pursued in a tribunal if there is no more than a three-month gap between times when the four week European minimum holiday is taken. As soon as there is a three-month gap, it means that earlier shortfalls cannot be pursued in a tribunal. Also, workers do not decide which holidays are the European four weeks and which are the UK ‘extra’. This gives employers considerable scope to limit claims.

There might be scope for arguing that the decision relates only to overtime that the worker is required to do, and does not apply to overtime that is genuinely voluntary. The decision leaves that line of defence for employers slightly open.

We can expect the decision to be appealed – leave has been given to appeal to the Court of Appeal, and a later appeal to the Supreme Court is also likely. There may also be a need to refer the case to the ECJ at the later stage, even though the EAT chose not to do so at this stage.

Despite the fact that the overtime and commission cases roll on, employers need to come to terms with the fact that the days of just paying basic pay during holidays are over.

Employers that are not doing so already should plan for how to reduce the impact of this decision and budget for increased costs. The increased costs may have an effect on planned pay rises, approaches to overtime, commission criteria and recruitment.

Employers should also review their holiday policies – before the decision it did not matter whether a particular day’s holiday counted as “European leave”, “UK extra statutory leave” or “additional contractual leave” as the pay was the same for each. Now that the EAT says that “European leave” is at a higher rate of pay, there are now two types of holiday and the approach to booking holidays will need to be adapted to take that into account.

As for calculating holiday pay during the “European leave” to take into account overtime, the implication from the EAT decision is that employers need to look at the average pay (including overtime) over the 12 weeks prior to the start of that holiday. If overtime is irregular, workers may try to take holiday shortly after a period of high levels of overtime. However, remember it is not just for the worker to decide which holiday is “European leave”. In practice, it seems that the employer will be able to decide – if workers are getting at least four weeks’ holiday with pay that takes into account overtime, it would be difficult for them to establish a claim that it should be different weeks.

This is potentially a hugely onerous decision for the construction industry given the number of individuals who work overtime.