Host responsibility fell heavily on an employer's shoulders in a recent Canadian case of an employee driving under the influence after a work function. Charles Chauvel and Alistair Wishart deliver a sobering message.

It's Friday afternoon and the office starts to slow down. People gravitate towards the staffroom, where you, the considerate boss, have hosted "Friday night drinks" for as many Fridays as you can remember. Tonight, like any other night, the staff will have a few drinks to unwind. Some will have more than others. Some will drift off into town later, for a few more drinks. One, called Linda, decides to drive home from the pub. At 9:45pm, over three hours since she left your office, Linda crashes her car in the wintry conditions and is seriously injured. Is that your fault?

Accident After Hours
In Canada recently, an employer was ordered to pay over C$280,000 to an employee who had suffered terrible injuries in a similar incident (Hunt v Sutton Group Incentive Realty Inc 5/2/01, Ontario Superior Court of Justice).

On 16 December 1994, Sutton Group Incentive Realty held an office party. Linda Hunt, an employee of Sutton, reported for work at 1pm. She was expected to answer the telephone during the party, and clean up after the guests had left. By 4pm, Mr Gerry, her employer, noticed that Ms Hunt was inebriated, and asked whether she wanted her husband to come and pick her up. Ms Hunt declined.

Because of a brain injury suffered as a result of the accident, she was unable to explain why it took her so long to travel such a short distance. It is clear from the judgment that the crash was a serious one, and that Ms Hunt's injuries had an enormous effect on her memory, her personality, and her quality of life.

Negligence?
Ms Hunt brought an action against her employer in the Ontario Supreme Court of Justice, claiming that Sutton was negligent in that it failed to properly safeguard her, as one of its employees, from harm.

More specifically, she claimed Sutton had failed to take adequate steps to prevent her from leaving her place of employment while she was in a state of intoxication.

Above and Beyond
First, the Supreme Court assessed the damages suffered by the plaintiff. These amounted to nearly C$1,125,000, made up of general damages, past loss of income, future loss of income and cost of future care.

The Court then turned to the question of whether Ms Hunt's employer owed a duty of care to Ms Hunt as an employee to safeguard her from harm. The Court traced the duty of care one person owes to his or her neighbour back to a case familiar to all first year law students. Donoghue v Stevenson (1932) AC 562 establishes that "you must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour" (at 580).

The Court held that the employer did owe a duty of care to the plaintiff to safeguard her from harm. This duty extended beyond the simple duty while she was on its premises. "It extended to a duty to make sure that she would not enter into such a state of intoxication while on his premises and on duty so as to interfere with her ability to safely drive home afterwards." The Court held that the defendant failed to fulfil this duty. Mr Gerry:

His failure to take the appropriate action was held to be a major contributing factor to the crash. The employer and the bar were held to be jointly and severally liable for 25% of the plaintiff's damages. Because the owner of the bar was bankrupt at the time of judgment, the Sutton Group became liable for the whole 25%.

Foresight Failure
The case is not binding in New Zealand, and is on appeal to the Ontario Court of Appeal, but it raises some interesting questions for all employers. How far does an employer's duty to safeguard its employees extend? The media spotlight has recently focused on a New Zealand office party where an employee died as a result of serious burns inflicted at the hands of another employee. Could you say that the employer contributed to this by failing to keep its employees under control? Also:

The Ontario Superior Court of Justice held recently that an employer is liable in such a situation (John v Flynn [2000] OJ No 128).

What Would Happen In NZ?
The New Zealand legislative framework is different to that in Canada, given New Zealand's ACC scheme:

Section 6 of the Health and Safety in Employment Act 1992 requires employers to ensure the safety of employees while at work. Breaches of the Act could lead to imprisonment, or $100,000 fines, where an employer takes or fails to take any action which is reasonably likely to cause serious harm, and which is contrary to the requirements of the Act.

Some of these words and concepts should be familiar from our earlier discussion of Hunt, so even if an employer cannot be liable to an employee for compensatory damages, it could still face prosecution for exposing employees to serious risk of harm. According to Hunt, the risk that an employee will crash on the way home after an office party (or any other work related function) is just such a foreseeable risk.

Limited Liability
A recent decision of the Employment Relations Authority suggests that an employer is not liable for all employees' drunken behaviour arising from a work function (Hewson v HiLine Power Utilities, Otago Power Services Ltd, 22/5/01, ERA Christchurch, CA17/01).

Mr Hewson worked for HiLine Power for 19 years without a blemish on his work record. In October 2000, HiLine Power hosted a BBQ for its staff and some invitees from other associated businesses. Food and alcoholic drinks were served, and Mr Hewson became intoxicated.

Towards the end of the evening, Mr Hewson walked a few metres away from the group he was talking to and proceeded to urinate on and around the BBQ. His supervisor approached him and told him to go outside (the function was held inside the company's workshop). Mr Hewson turned towards his approaching supervisor, who "had to step quickly to avoid being hit by the stream of urine."

While still urinating, Mr Hewson moved back over towards the group he had been talking with. Mr Hewson was forcibly removed from the function, and, after a well conducted investigation, was summarily dismissed.

Mr Hewson took a personal grievance to the Employment Relations Authority, claiming that he had been unjustifiably dismissed. The ERA noted that "The relevant collective employment contract gave examples of serious misconduct for which an employee could be summarily dismissed, and examples of less serious misconduct for which an employee must be warned prior to dismissal. Perhaps unsurprisingly, Mr Hewson's behaviour is not expressly mentioned in either set of examples."

Host Responsibility
The ERA went on to find that Mr Hewson had been justifiably dismissed: "...the employer adopted an appropriate "host responsibility" approach in the conduct of the function. While others consumed alcohol, no one else lost control of their behaviour. The employer is not responsible for Mr Hewson's drinking or his behaviour." This decision indicates that:

However, while the ERA found that Mr Hewson's behaviour justified his dismissal, might the issue have been different had Mr Hewson crashed his car on the way home?

Conclusion
When planning work drinks or office related functions, it is worth thinking about the safety of employees affected by alcohol. Call them a taxi, arrange a van to take people home, or implement a roster of sober drivers. Otherwise, you assume a risk that you will be held liable for what happens to staff who attend the function and then fail to keep themselves safe, or who cause harm to others. "Host responsibility" should be an important aspect of your risk management.

This is a general summary only and should not be taken as a substitute for specific advice.

Authors: Charles Chauvel, partner and Alistair Wishart, lawyer from Minter Ellison Rudd Watts
Web site: Minter Ellison Rudd Watts
First appeared in Employment Today Issue 66, June 2001
Also published at findlaw.com