When Holiday Parties Go Wrong: Avoiding Legal Hangovers

What would you do if this happened at your Christmas party?

Picture this: during a multi-day Christmas party at an Airbnb, an employee is accused of spreading rumours about the company director’s personal life. Instead of conducting a fair investigation, the director confronts her in front of colleagues and even holds a public vote to decide her guilt. Her resignation is demanded immediately, with the director handing her a pre-written resignation letter.

This isn’t fiction—it happened in Jenny Yang v FCS Business Service Pty Ltd where the festive celebration turned into an expensive lesson for the employer. The Fair Work Commission (FWC) found that the resignation was the result of a humiliating and biased process, awarding Ms Yang maximum compensation for constructive dismissal.

Why Employers Need to Be Cautious with Holiday Parties

Christmas parties are an extension of the workplace, and with that comes a responsibility to ensure safety, respect, and compliance with workplace laws. While they can be a great opportunity to boost morale, they also present risks if not managed carefully. Planning, clear communication, and thoughtful risk management help create an event that’s enjoyable, inclusive, and legally compliant.

Key Considerations for a Safe and Inclusive Christmas Party

1. Venue Selection and Accessibility 

Choose a Safe and Suitable Venue: Offsite venues, like Airbnbs or other private rentals, can introduce new risks. Ensure the venue is properly insured, accessible, and has facilities that support safe behaviour. 

2. Alcohol and Food Management 

• Moderate Alcohol Consumption: Alcohol consumption increases the chance of inappropriate behaviour. Consider limiting alcohol options, such as offering beer and wine only, setting drink caps, or closing the bar early. 

• Provide Sufficient Food and Non-Alcoholic Drinks: Food helps moderate alcohol’s effects. Ensure there is plenty to eat and a variety of non-alcoholic drink options available to all employees. 

3. Reinforcing Behavioural Expectations 

Pre-Event Communication: Issue a memo reminding employees of company policies, including respectful behaviour and safe alcohol consumption. This can act as a preventive measure and evidence that the company took reasonable steps to mitigate risks. Consider hosting a training session or discussion beforehand, focusing on acceptable behaviour and company policy.  

4. Harassment and Discrimination Prevention 

Positive Duty to Prevent Workplace Sexual Harassment: With new workplace laws, employers have a proactive obligation to prevent workplace sexual harassment and discrimination. This requires taking reasonable and proportionate steps to ensure the party remains respectful and free from harassment. 

5. Safe Travel Arrangements 

Plan for Safe Transportation: Arrange for taxis, ride-shares, or designated drivers, especially for events where alcohol is served. Offering these options can protect the company from liability if an impaired employee is involved in an accident after leaving the event. 

Protecting Your Business and Employees

Holiday parties are more than just fun—they’re an extension of your workplace. Taking a thoughtful, proactive approach ensures your team enjoys a memorable celebration that reflects your company’s values and avoids unnecessary risks.  

For further guidance on handling employee relations, workplace policies, and incident management, contact the team at IRiQ Law.