People & Human Resources

Small businesses warned not to let their workers foot the bill for work Christmas parties

Emma Koehn /

It’s the time of year to celebrate big wins and bond as a team, but can you force an employee to attend your Christmas function?

Many business owners will be keen to get their whole staff on board for end-of-year bonding, but legal experts warn employers to be careful when it comes to the communications — and the costs — that go with a Christmas party invitation.

While employers are able to reasonably direct their workers to perform tasks, Christmas functions are a real grey area, says senior associate at employment law firm McDonald Murholme, Trent Hancock.

“I don’t think any employer could say that a Christmas party is compulsory. An employee can refuse to attend if they wish, if the function is outside of work hours. I don’t think employers should be directing employees that they have to attend — it’s not a good look,” he says.

However, even those employers who do understand they can’t compel their staff to attend Christmas lunch still often fail to think about how much they can ask their staff to fork out for a mandated work function. One in six Aussie businesses are set to spend more than $10,000 on a Christmas event this year, but Hancock warns this money should really be coming out of the business.

“Employees are entitled to reimbursement for work-related expenses,” he says.

While end-of-year events can become a grey area, in general terms it is best practice to ensure all elements of a Christmas party are covered by the company or that staff are reimbursed for expenses.

Often the costs of attending a party go beyond simply showing up for dinner. Factors like safe travel home should also be covered by the employer to ensure nobody is left out-of-pocket, Hancock says.

“There are a whole range of things, from taxis and other associated costs, that come up when attending these events,” he observes.

Take extreme care with “unofficial” parties

The official end-of-year party might have been costed and signed off on, but that doesn’t mean employers can turn a blind eye to the planning of any other “unofficial” staff gatherings, Hancock says.

While employers can’t put a stop to employees socialising in their spare time, it is a good idea to communicate to staff that their behaviour at after party events must still meet the company’s code of conduct.

It can be the case that if some incident arises, even at a non-work event, disciplinary action can follow, and that can have a follow-on effect in the workplace,” Hancock says. 

Potential disputes around situations like harassment at an unofficial event can still have consequences for staff. Hancock says employers should make it clear to those in the business which is the official work function, as well as communicating to staff that they must adhere to behavioural standards if they kick on afterwards.

Codes of conduct and obligations continue to apply after work events, so employees need to be aware that if they’re at one of these, they do still stand. They should be told to be mindful of this.”

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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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