How to Avoid a Nightmare Before Christmas: Risk Management and the Corporate Holiday Party

Halloween is supposed to be the time for frightening stories, but more often than not Christmas is the scariest time of year for employers thanks to one enduring holiday tradition: the staff Christmas party. Most employers have heard stories of excessive alcohol consumption leading to embarrassing or dangerous situations, from the new accountant dangerously mistiming table-top dancing to the vice-president making harassing comments to an intern; or worse, to the IT manager trying to drive home after too many drinks.

In their efforts to avoid becoming a cautionary tale and concern about potential legal liability, employers sometimes lose sight of the fact that the goal of the staff Christmas party should be for its employees and their guests to have fun, and unfortunately, a Monday-morning staff brunch may not achieve that goal. A conventional staff holiday party is usually highly-anticipated by employees, and often the most inclusive workplace event for employees of varying ages and physical abilities. Fortunately, employers do not need to embrace a “no-fun” policy to minimize liability concerns.

While the precise scope of an employer’s duty of care towards its employees at a holiday party is unsettled in Canadian law, it is clear that an employer may be held responsible to a third party by an intoxicated employee or guest, if that employee or guest was under their control and if the employer knew or ought to have known that the employee or guest was intoxicated and could pose a danger to others. Moreover, an employer is responsible for ensuring that its employees have a safe workplace and do not experience harassment from their fellow employees.

While employers should seek legal advice appropriate to their specific circumstances, an employer’s legal obligations generally require an employer to take reasonable steps to ensure that its employees and their guests do not drink to excess at an employer’s holiday party and that they have a safe way to get home should they choose to drink alcohol. This does not mean that there is one option to ensure the safety of all an employees, but rather that employers should aim to achieve a balance between risk management and ensuring a fun holiday party.

The following chart describes some steps employers can take to minimize their risk of legal liability arising from holiday parties. Employers should avoid poor risk management at all costs, but should feel comfortable taking a balanced risk management approach.

Poor Risk Management Balanced Risk-Management Extreme Risk-Management
No taxi paid by employer. Taxi service paid for by employer; employees made aware of service in advance. Taxi service paid for by employer; employees made aware of service in advance.  
Open bar or self-service drinks funded by employer. Open bar or host bar administered by certified and trained liquor servers.   No alcohol or host bar.    
Employer serving liquor. Certified and trained liquor servers providing alcohol. No alcohol or certified and trained liquor servers providing alcohol.  
Party held at workplace. Party held at third-party commercial establishment. No party, or party held at third-party commercial establishment.  
Employer-organized drinking games. Bartenders and employer monitoring and discouraging excess consumption. No alcohol, or consumption limits.  

While the above chart may serve as a useful guide, employers should always seek legal advice to ensure that they are taking appropriate steps to mitigate risks at their social functions.