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A minefield masquerading as a Christmas Party.
David Miller, Marketing Manager, PSU IT Voice and Data Ltd. |
The PSU Christmas Party has been booked for over two months now and this year will see staff and partners enjoying a James Bond Themed Evening and Casino at a hotel in Gloucestershire. Our evening will probably see the same character traits appear that appear across a cross selection of other companies parties across the UK. There'll be someone you least expect who will have one too many, someone will fall over, someone will tell one to many truths and finally, the piece de resistance, someone will bring a camera.
Legal
Office parties are a time of bonding, when people let their hair down, relax and have fun. But what do you do if Andy from Accounts has a fight with Ian from IT?
Or what do you do if Mary, the usually quiet manager, decides to push her professional relationship with Wayne, the office junior, so far that a claim for sexual harassment seems inevitable?
It's important to realise that however far you try to distance yourself, or however much you feel that such conduct is unrelated to you as their employer, you could find yourself held accountable for the behaviour of your staff.
In a recent case between the Chief Constable of Lincolnshire Constabulary and Stubbs, the employment appeals tribunal found that, as the employer, the Constabulary were liable for the actions of a police officer who sexually harassed a colleague both at an organised leaving party and at the pub. These events were not within work time, nor on the employer's premises, but were found to be sufficiently linked to the employer to impose liability. They were work-related social functions.
Case law has also established that employers have an almost mind-boggling level of responsibility for what employees do in the course of their employment. Employers may find themselves liable for the actions of an employee that are well beyond the boundaries the employer recognises for the employee's role.
According to Clare Taylor of Surrey based Hart Brown solicitors there are measures that can be taken to reduce the chance of an employer becoming liable. These include restricting the amount of alcohol available and making it clear beforehand that misconduct will be dealt with in the same manner as an incident within normal work time. Sadly, it is not always possible to prevent incidents occurring that might leave you open to litigation.
The morning after may well become an exercise in damage control. Do not dismiss any allegations made - investigate claims and deal with them in the same manner you would any other work related situation.
As long as you act reasonably, make sure you have clear policies in place and ensure that you adhere to the procedures required, you should be OK.
Financial
As well as the legal issues outlined above, there are also financial and taxation implications when entertaining staff and clients.
When a company provides its customers and suppliers with corporate entertaining the cost is not deductible for corporation tax relief.
But when a company provides a Christmas, or any other annual party or social event for it's employees it can be deductible for corporation tax relief. In addition, staff enjoying the social events do not pay income tax or National Insurance on the cost, provided that the annual aggregate expenditure does not exceed £150 including VAT.
The permitted tax free cost of staff entertaining is calculated by taking all related costs including entertainment, accomodation and hire of equipment then dividing by the number of people attending.
Employers should take care to ensure that the annual average cost for an employee does not exceed £150, otherwise the full costs of entertaining each employee will be taxed on them as a benefit in kind.
You have been warned.
