The festive season is almost upon us, and that means festivities. Along with those come work parties, client dinners, business unit lunches, and group get-togethers. Official parties, lunches and dinners often progress to unofficial after parties, and parties in Australia tend to involve alcohol, especially in the festive season. As we all know, alcohol can lead to questionable decisions and increase the risk of injuries.
As an employer in a no-fault workers compensation state, what are you liable for in these circumstances? Where is the magic line when it starts to get grey from what started out as a civilised client lunch, and may ultimately result in some very dodgy dancing in a nightclub at 2am? If your worker injures themselves along the course of the afternoon and evening, at what point does your liability for workers compensation cease in Tasmania?
Arising out of or in the course of employment
Under the Workers Rehabilitation and Compensation Act 1988 (Tas), to be entitled to compensation, a worker must suffer one of the following:
- An injury which arose in or out of the course of their employment; or
- A disease to which their employment was the major or most significant contributing factor; or
- A recurrence, aggravation, acceleration, exacerbation or deterioration of a pre-existing injury or disease to which the employment was the major or most significant contributing factor to the development of that recurrence, aggravation, acceleration, exacerbation, or deterioration.
In most circumstances when we are talking about preventing workers compensation claims from Christmas parties and related activities, we will be looking at injuries and whether they arose in or out of the course of the worker’s employment.
It has been well established by the courts that when considering whether an injury arose out of or in the course of a worker’s employment, consideration must be had to the place where and activity during which, the injury occurred. Subsequently, it must be asked whether the employer induced or encouraged a worker to be in a particular place or engage in a particular activity.
It is important to note however, that simply being in a place that an employer has induced or encouraged a worker to be at, does not necessarily mean a worker will be entitled to compensation.
Comcare v PVYW  HCA 41
In Comcare v PVYW, the worker sustained injuries whilst engaging in sexual intercourse in a motel room that her employer had booked for her for the purposes of work-related travel. The High Court held that whilst the employer encouraged or induced the worker to be at that specific place, she was not entitled to compensation because the worker was engaging in an activity that the employer did not induce or encourage her to engage in.
What we can take from Comcare v PVYW is that if a worker is injured whilst engaged in an activity at a certain place, that connection does not exist merely because of an inducement or encouragement to be at that place.
The question to be asked is did the employer induce or encourage the worker to engage in that activity?
Application for employers
The law being interpreted in this way places employers at risk for injuries following official work events, because “inducement” and “encouragement” are open to interpretation.
The terms were considered by the Federal Court in Comcare v Mather  FCA 1216 where it was made clear that the terms were not to be taken as having a narrow meaning and limited to some positive action.
It is possible to see how the line is blurred between an injury arising out of or in the course of employment, and a worker’s engagement in personal activities.
An employer kindly shouting a round of drinks following the cessation of the official work Christmas function may well be seen as “inducing” or “encouraging” a worker to partake in excessive alcohol consumption. Or equally an employer encouraging a worker to assist them to carrying several heavy boxes to the next venue may also be seen as inducing or encouraging that worker to participate in those activities, even though it is no longer part of an official work function, and not in the ordinary scope of their duties.
If either worker is injured as a result of the participation of or as a result of the excess alcohol consumption or assisting to lift boxes, it is feasible to see how, on the basis of the “inducement” or “encouragement” principle, the employer may be considered liable for those injuries.
These cases are, necessarily, decided based upon the specific circumstances relevant to the employer, worker and injury. Accordingly, there is no broad-brush solution which will guarantee an employer indemnity from workers compensation claims arising out of or surrounding work events.
Despite this, there are some simple actions employers can and should take which will at the very least, mitigate their risk of liability.
The first is preventing the injuries in the first instance, particularly any alcohol related injuries.
All employers should have drug and alcohol policies which are enforced both in the usual course of business and at any social events.
WorkSafe Tasmania have some good suggestions regarding such policies. This includes making sure that whoever is attending your event is aware of the drug and alcohol policy, knows and understands it.
These policies should be readily accessible to workers at all times, but we also recommend re-circulating the policies in the lead up to any significant event, such as a Christmas party, in order to keep them at the forefront of everyone’s minds. At the same time, employers should be stressing the importance of everyone acting responsibly. If a dangerous situation develops the employer needs to step in, particularly between co employees.
As for the events themselves, employers should ensure that there are plenty of non-alcoholic options available to workers, as well as plenty of food, including those rich in protein and carbohydrates.
It may also be viable to have a someone in a designated role for the event, ensuring that the drug and alcohol policy is complied with, and that everyone is acting responsibly and safely. It is also sensible to cut off those who seem to have over imbibed or to direct them to leave and ensure they get home.
Employers should cease alcohol service prior to the end of the official function. Employers should also remind people not to drive whilst intoxicated and if possible, provide them with Cabcharges to get home safely, or information about public transport options.
The second is a clear demarcation of the start and finish time for work related social activities.
Beyond alcohol and drug policies, employers should be clear about when any social event will finish. This includes communicating to workers in the lead up to the event that the event will be ending at a certain time. Employers may wish to go so far as discouraging or condoning ‘after and pre parties’.
It is vitally important to separate work events and whatever may occur afterwards noting that retrospectively the question may be asked whether an injury occurred in or out of the course of a worker’s employment.
The more separate that the work component of any festivities are to any other activities which occur, the easier that it will be to argue that any injury that did not occur at the festivities were not sustained in or out of the course of the worker’s employment.
Due to the difficulty with potential ‘inducement’ or ‘encouragement’, managers and senior members of staff should be discouraged from advocating for the existence of, or attendance at ‘after parties’, heading out to bars or clubs as a collective, or buying drinks for their workers.
This isn’t to say that everyone can’t have a fun night together, but if everyone is aware of these parameters it should assist in preventing injuries occurring in the first instance, and then having them develop into workers compensation claims.
Employers are not just liable for injuries suffered by workers at official events. The relevant consideration is whether the employer has “induced” or “encouraged” the worker to engage in the specific activity which has caused the injury.
To mitigate this risk, employers should:
- Have alcohol and drug policies which are enforced at all times, including events;
- Communicate a clear cut off time for events in advance;
- Consider discouraging ‘after parties’;
- Ensure that plenty of food and non-alcoholic beverages are provided; and
- Outline their expectations of senior staff and managers regarding ‘after parties’ and purchasing alcoholic drinks for their workers.
If you are an employer and have any questions about how you can best circumnavigate Christmas claims, minimise the risk of being liable for injuries either at official or unofficial events, or require assistance in formulating an appropriate alcohol and drug policy and enforcing it, please contact us to discuss your situation.
If you would like more information about this article, please contact:
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Published: 1 December 2023