When is a worker not a worker?

Employers are increasingly being held liable for the actions of employees when not at work. Is your business exposed? ANDREW DOUGLAS explains your best tactics to mitigate the risks

By Andrew Douglas


Employer liability

Employers are increasingly being held liable for the actions of employees when not at work.


It seems that courts, tribunals and commissions are broadly interpreting legislation to protect workers – and it is a warning shot across the bows of all employers that should not be ignored.



A number of recent cases in workers compensation jurisdictions suggest an employer is liable where an employee suffers injury at a work-related function.

In South Australia, employers are liable in situations where an employee is encouraged to live on the premises of work – even though the person was injured when not working. In NSW, an employer was liable for injuries sustained to a seasonal worker travelling to his temporary residence.

Equal opportunity law is just as generous to employees. Discrimination or harassment on any basis that occurs to an employee outside of work, but in similar circumstances to the above, would be actionable by the employee.

Both workers compensation and equal opportunity complaints have significant brand, cultural and cost ramifications. But it is relatively easy to avoid the more common risks.

Here are some simple tips to avoid risks:

  • Do not encourage, or at least control, drinking at any work related functions. This is the most common cause of injury, harassment and discrimination.
  • Develop a policy around the functions to describe what behaviour is and is not acceptable.
  • Ensure at the conclusion of work functions all employees leave the venue and make sure the venue does not have other bars employees can congregate at.
  • Train employees in equal opportunity, occupational health and safety and disciplinary policies regularly, and take a roll of attendees.
  • Do not encourage or induce employees to live on work premises. It may be a benefit of engagement, but the letter of offer must make it clear there is no encouragement or inducement involved. It would be wise to have a lease at will on a “peppercorn” rent to demonstrate the arms length arrangement.
  • Make sure managers do not create internal social gatherings of employees involving the uncontrolled use of alcohol.
  • Make sure employees are not exposed to intoxicated or inappropriately behaving clients.


In my experience, 90% of sexual harassment claims arise from social functions and involve excessive use of alcohol. An increasing percentage of bullying claims arise in similar circumstances.

In the last few years an increase in stress-related workers compensation claims raise the issue of exclusion from informal functions or criticism and rudeness at social functions, sometimes in front of clients.


Having someone live on premises where the presence of unknown people and the use of alcohol and drugs is not controlled has real risks.


Your company’s brand no doubt emphasises that the business and its employees are good people. Good people do not hurt other people. The trick for employers is to avoid circumstances where good people can behave badly or where their exposure to risk is uncontrolled.


There is no doubt that courts, commissions and tribunals around Australia are broadening legislation to protect the vulnerable. To protect your business, you must ensure employees are safe in an increasing number of circumstances.






Andrew Douglas, Douglas Workplace & Litigation Lawyers

Andrew Douglas is the founder, principal lawyer and managing director of Douglas Workplace & Litigation Lawyers. Andrew is an experienced commercial litigation and workplace lawyer, who acts both as a solicitor and advocate.



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