The holiday season is full of cheer, celebration, hangovers…and legal implications for employers.  Canadian courts have established that in some cases, employers are liable for the harm and damages caused by intoxicated/impaired employees after an employer-sponsored party. Those cases are ones in which:

• The employer provided the alcohol to the employee;
• The employer knew the employee was intoxicated;
• The employer failed to take sufficient steps to prevent the harm from occurring.

The British Columbia case, Jacobsen v. Nike Canada Ltd. (1996), was the first case in Canada to apply host liability within the context of the work environment. While at a worksite, the employer provided alcoholic beverages to its employees, including Jacobsen. Subsequently, Jacobsen went to a local bar and continued to drink. On his way home, he was involved in a serious car accident that left him a quadriplegic. Jacobsen sued his employer.

The Court held that, although the employee voluntarily chose to drink to the point of intoxication, the employer failed to provide a safe workplace by introducing alcohol at work. Specifically, the Court commented that Nike was required to take reasonable care of the safety of its employees, and it failed to meet the standard of care by providing beer, failing to monitor consumption, and failing to take steps to prevent Jacobsen from driving home drunk.

The Court went further to state that an employer is held to a higher standard than a commercial host and has an obligation to monitor the consumption of employees.

Some of these monitoring options included:

• keeping the alcohol under lock and key;
• stationing a supervisor near the cooler;
• asking employees how much they had to drink;
• counting empty cans to make an educated guess as to consumption; and
• ensuring employees were returned home safely.

As a result of the employer’s failure to meet its standard of care, Jacobsen was awarded $2.7 million in compensation, of which amount the employer was responsible for 75 per cent.

In the Ontario case of Hunt v. Sutton Group Incentive Realty (2001) (Ont. S.C.J.) the employer, Sutton, hosted a “self-serve” Christmas party at their offices during business hours. An employee, Hunt, drank heavily during the party, and continued to drink after leaving the Sutton office party. Hunt drove home in poor condition and was seriously injured in a motor vehicle accident.

The Trial Judge held that since Hunt was performing work during the party, this situation was different than a typical social host case. The Judge stated that Sutton owed Hunt a duty of care which extended beyond her physical presence at work, and held that Sutton failed to discharge this duty by not preventing Hunt from driving home when it knew or ought to have known that with an open bar it would be impossible for it to control and monitor the consumption.

By not making sufficient attempts to see that Hunt got home safely, the employer was partly liable for her damages, which were assessed at $1 million.

Tips for Employers:

These cases highlight that employers will be held to a high standard when alcohol is being served in the workplace. Especially during the holiday season, employers should recognize that:

• Providing alcohol (particularly self-service) is risky;
• They must monitor consumption and best practices would dictate limiting consumption;
• Anyone in a responsible position (supervisors and above) should not be consuming alcohol at the party;
• A plan must be developed before the event about how employees and others will get home safely and such plan should include the provision of transportation (for example – taxis).

Harassment and Addiction Issues – Another Party Headache

Intoxication at a holiday party does not only raise issues about legal liability for employers, but might also unearth harassment, addiction problems and a duty to accommodate.

The Ontario human rights case of Huffman v. Mitchell Plastics, 2011 HRTO involved the termination of an employee after some ill-advised decisions at the company holiday party. During the party, the employee became intoxicated and acted in an inappropriate manner by making physical threats and sexually inappropriate comments to colleagues, management and their spouses. The following Monday, the employee was terminated for his actions at the party.

The employee brought a human rights claim, arguing that he suffered from alcoholism, which affected his behaviour at the party, and that the employer knew or ought to have known about his disability. In dismissing the application, the Human Rights Tribunal found that the employee had not established that he adequately advised the employer of his disability.

The employee had approached a human resources generalist about his alcoholism and inquired about the company paying for a particular medication that was known to be effective in treating addictions including alcoholism, smoking, and gambling. The HR generalist testified that she thought the medication was for smoking, and the employee did not provide any other evidence, such as a doctor’s note, regarding his alcoholism.

The good news for this employer was that the Tribunal found that this was not enough disclosure to trigger the employer’s duty to accommodate, and therefore dismissed the employee’s application.

Where employees seek to defend inappropriate behaviour in the workplace or at company-sponsored functions on the basis of an addiction, this case makes it clear that the employee must notify his or her employer of his particular disability in advance of seeking accommodation and in advance of relying upon it to explain inappropriate behaviour.

Despite the result in this case, employers will need to be mindful of their duties to ensure the safety of their employees at the workplace, including during a holiday party. This may mean addressing harassment concerns or potential accommodation needs that come about as a result of holiday celebrations.

By Patrizia Piccolo and Parisa Nikfarjam