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What Constitutes ‘Work Drinks’?

Picture this… one day your employer invites you and your work mates to an exclusive, staff only party. It’s a soft opening of a new hip bar in town. The invitation states that there will be free booze and a DJ all night long. It’s at a venue owned and operated by your employer. What could go wrong? Well, what happens if you get hurt at this party? Who can be held responsible? I know what you are thinking… your employer right? The NSW Court of Appeal has told us to think again.

Recently, the NSW Court of Appeal considered a case of this very kind, determining whether injuries sustained at an event like this could be said to be “in the course of” or “arising out of” his employment which are legislative pre-conditions to damages for workers compensation claims.

Mr Mitchison was a bellboy employed at a hotel located in Sydney’s casino complex and owned by The Star. In 2012, the Star held a “soft opening” for its new nightclub, ‘Marquee’, which although owned and operated by the Star was not located in the Casino complex, but adjacent to it.

During a spontaneous fire drill at the party, Mr Mitchison fell down the stairs and sustained injuries. At the time, he claimed and was paid workers compensation under the Workers Compensation Act 1987 (NSW).

In 2015, Mr Mitchison brought The Star to Court under common law in relation to the same injuries.

The party was organised by The Star’s Events Department and the invitation was sent exclusively to the heads of each department to invite their staff members. The invitation described the party as a “test run” and a “strictly staff only event”. It also said that the free drinks would be provided.

Mr Mitchison was invited to the event by his Bellboy Captain, together with other employees who were not rostered to work. Interestingly, Mr Mitchison gave evidence stating that he was not aware the Marquee was owned and operated by The Star nor was he aware that the party was exclusively held for The Star employees.

In relation to the pre-conditions for workers compensation, the Court of Appeal (agreeing with the primary Court) found that the injury was not “arising out of” or “in the course of” his employment with The Star. The bases of this finding were that Mr Mitchison was not being paid at the time of the accident.  He was employed as a Bellboy and nothing about what he did as a Bellboy caused the injury. He voluntarily attended the party and was not required or expected by his employer to attend it. To this end, the Court noted that of the 4000 employees of The Star, only 400 employees attended the party.

Further, Mr Mitchison was not at the hotel, which was his place of employment but a separate location and attended to drink with colleagues, not work.

The Court found that The Star did not encourage or induce Mr Mitchison to attend, despite offering free drinks and providing a DJ.

Employers should be aware of the liability that can arise from their employees’ conduct outside working hours. This extends to more than just workers compensation but also for instances where an employee’s conduct outside of working hours is seen as sufficient reason to terminate its employment.

In actions for unfair dismissal arising from “out of office” conduct, the Fair Work Commission (FWC) frequently finds such conduct a ground for a valid dismissal. In these decisions, the FWC has considered that the conduct is inconsistent with the continuation of the employment relationship, the employee’s duties and obligation and adverse to the interests of the employer.

What does it all mean? “out of office” conduct is treated differently in different jurisdictions and an employer’s liability could be broader than most know. Fair? Who knows, but that’s the Law.