It’s the season for Christmas parties. And, as an employer, you may well be holding one for your staff—a Christmas party is, after all, a popular way of thanking employees for their hard work over the past year.
But while your finance director will doubtless have reminded you of HM Revenue and Customs’ rules regarding avoiding any tax or National Insurance liability for such a party, you may not be aware of the equivalent guidance regarding your legal obligations if your Christmas festivities are not to fall foul of the law.
And certainly, that’s our experience here at The Legal Director: while many companies provide some form of festive celebration, most don’t understand what they need to do to minimise the chances of any unwelcome legal consequences.
Nor do they understand that they could be held liable for what happens at those parties, as well as for what might happen immediately afterwards.
So what to do in order to ensure that your festive celebrations pass off smoothly, without fear of post-Christmas legal worries?
Open to all
Let’s start with those HM Revenue and Customs rules.
Briefly, to be exempt from taxation or National Insurance liabilities, the Christmas party must be all the following:
* It must cost £150 or less per head
* It must be annual
* It must be open to all employees
And from a purely legal perspective, the requirement for it to be open to everyone is the issue that should focus the mind.
Consequently, the party must be held at a venue that is easily accessible for everyone, both in terms of location and also in terms of access for people with disability issues. If it is out of town, consider laying on transport.
If entertainment is to be laid on, then that entertainment needs to be suitable for all: avoid entertainment that might cause offence, either to your own staff, or to the employees at the venue. (And yes, employers have found themselves in trouble because of this.)
Eat, drink, and be merry
That same message of openness also underpins the guidance with respect to food and drink—especially in the case of a multi-cultural or multi-ethnic workforce, and especially in the case of venues to which employees may have driven.
Make sure that plenty of non-alcoholic drinks are on offer, and lay on food. Think carefully, too, about free bars: not only might unlimited free alcohol cause employees to drink too much—potentially leading to unwelcome behaviour—but it might also lead employees to drink too much to be able to safely drive home.
So if in doubt, it’s good advice to have made provisions for transport to be available to take people home safely. It’s also good advice to send around a letter or e-mail, reminding people that a Christmas party is still a work function, and that the same standards of behaviour are required as would be appropriate in the workplace.
And yes, taking such common sense precautions would go some way to helping you defend any subsequent claims.
Remember, too, that we live in the age of Facebook and Twitter. You might want to issue guidance regarding employees’ social media postings, particularly in the case of on-line images of employees at the event—and especially so if any of those images might show identifiable employees enjoying themselves to excess.
Put another way, just because it’s a Christmas party doesn’t mean that the laws regarding data protection and privacy will have been suspended for the duration of the event.
Think too about how to deal with situations where people drink to excess, and either cause trouble, or aren’t able to turn up at work the following day. Again, the wording of that before-the-event reminder letter can be helpful here.
And be careful, too, about reputational damage. Your firm’s good name will have taken years to build up—all it takes is one out-of-hand event for much of that goodwill to be dissipated.
All of which—frighteningly!—is probably enough to deter an employer from holding a Christmas party in the first place.
Our advice: don’t over-react—Scrooge, remember, is a character in a work of fiction by Charles Dickens. So go ahead, have fun, and enjoy thanking your employees for all the hard work that they’ve put in this year.
And remember, too, that with the legal side of things taken care of, then senior management can also enjoy the event to the full, rather than worrying about what might go wrong.
So have a Merry Christmas, from everyone at The Legal Director!