’Tis the season: Employers beware as company vicariously liable for the conduct of company director at social event

07-12-2018

Authors: Séamus Given, Sarah Lawn and Niamh Fennelly

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With Christmas just around the corner, a recent UK Court of Appeal decision will serve as a timely reminder to employers that they can be held vicariously liable for the conduct of employees at social events where the employee’s conduct is found to be “in the course of employment“.

In Bellman v Northampton Recruitment Limited, the Court of Appeal found that whether or not conduct is “in the course of employment” will involve a broad interpretation of the relevant employee’s role.

Background

Mr. Major was managing director of Northampton Recruitment Limited (“NR”), a company with only eleven employees.  The Court found that Mr. Major was the “directing mind of [NR] and was authorised to act on behalf [NR] with a wide remit.”   He saw himself as being in overall charge of all aspects of NR and things were done “his way”.

Mr. Major organised an office Christmas party, which was held at a golf club.  Food and drink were paid for by NR along with accommodation for most of the guests at a nearby hotel.  As the Christmas party finished up, Mr. Major paid for taxis for all those who wanted to go to the hotel for further drinks, which included the claimant employee, Mr. Bellman.

At approximately 3am, Mr. Major, frustrated when questions arose from employees in relation to a hiring decision of NR’s, began to lecture them, advising them that he owned the company, that he was in charge, and that the decisions were his to make.  At this point, in losing his temper, Mr. Major assaulted Mr. Bellman, who sustained life changing injuries.

High Court Decision

The High Court found that there was an insufficient connection between Mr. Major’s employment and his serious assault of Mr. Bellman, and believed that drinks at the hotel were “an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business.” Mr. Bellman appealed this decision.

Court of Appeal Decision

In considering Mr. Bellman’s appeal of the decision of the High Court, the Court of Appeal asked:

  1. What were the functions or field of activities entrusted by NR to Mr. Major?
  2. Was there a sufficient connection between Mr. Major’s field of activities and the assault in the hotel at 3am?

What were the functions or field of activities entrusted by NR to Mr. Major?

The Court took a broad approach when considering the question of Mr. Major’s functions or field of activities.  Assessing what Mr. Major was actually authorised to do for NR was found to be too narrow an approach.

The Court found that Mr. Major:

  • was managing director and directing mind of a relatively small company;
  • had responsibility for all management decisions;
  • had authority to issue instructions to more junior employees and generally had a wide remit; and
  • did not have set hours in a company that was a round the clock operation.

On that basis, looking at the matter objectively, the Court found that both Mr. Major’s remit and authority were very wide.

Was there a sufficient connection between Mr. Major’s field of activities and the assault in the hotel at 3am?

Despite the time and place of the assault, Mr. Major was purporting to act as a managing director of NR.  He was exercising the very wide remit which had been granted to him by NR.  Mr. Major’s lecture itself related to his authority over the employees and Mr. Major chose to “wear his metaphorical managing director’s hat”.  He was “not merely one of a group of drunken revellers whose conversation had turned to work.”

It was accepted by the Court that the unscheduled drinking session was “not a seamless extension of the Christmas party.” However, although there was change in venue and a (short) gap in time between the Christmas party and the drinks at the hotel, the Court found that Mr. Major was present as managing director of NR and had misused his position. On that basis, the Court found that there was a sufficient connection between Mr. Major’s field of activities and the assault to render it just that NR be held vicariously liable for his actions.

Conclusion

The close connection test has previously been applied in Ireland in vicarious liability cases and therefore any application and development of this test in the Superior Courts in the UK is of relevance to Irish employers.

In the context of upcoming work related Christmas social events, employers are advised to ensure that employees, including at management level, clearly understand the standard of conduct expected of them at these events.  Employees should be made aware that they must comply with company policies such as dignity at work and bullying and harassment policies not only at work but at work related social events.

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