Employer’s liability for assault following a Christmas party?

It is widely reported every year that employment law rights and Christmas parties often collide in a frequently drunken sequence of events that ends up either in an employment tribunal, with a large compensation payment by the employer, or both. This time last year I wrote about a reported decline in “risky” office parties and, a month earlier, about a case resulting from fairly outrageous behaviour by MBNA employees at Chester races.

This year the facts of the case I’m reporting revolve around a Christmas party but stray away from conventional employment law into the area of the potential liability of an employer for the acts of its employees in the context of personal injury.

On 1 December the High Court handed down its judgment in the case of Bellman v Northampton Recruitment Limited, which was heard from 24 to 26 November. It is a sad story about the aftermath of a Christmas party which got thoroughly out of hand and resulted in the Claimant, Mr Bellman, suffering brain injury which was so severe that he has no recollection of the incident and had to appear in court by a litigation friend.

John Major, his wife Beverley and Michael Geoghehan were directors and shareholders in Northampton Recruitment Limited which ran franchised offices of Drivers Direct, a temp agency for HGV drivers. (Following the assault the Company went into liquidation in June 2012 and was dissolved in October 2013.) The Claimant, Mr Bellman, and Mr Major had been friends since childhood and in 2010 Mr Major offered Mr Bellman the post of sales manager which he accepted in November of that year. He was on a daily rate of £80 plus commission. In 2011 the Company’s Christmas party took place at the Collingtree Golf Club on 17 December. 24 people were in attendance. Alcohol was freely available. One witness recalled that he had about 12 pints and a couple of Jack Daniels in the course of the evening. When the party finished about half of those in attendance decided to continue at the nearby Hilton Hotel.

At about 3.00 a.m. and reportedly unprovoked, Mr Major punched Mr Bellman in the face. Mr Bellman got up and Mr Major punched him again. This time Mr Bellman “went straight back like a falling tree” and hit the marble floor. He was bleeding from his nose, ears and mouth. One employee in attendance thought that he was dead. He was taken to local A&E and then moved on to the specialist unit at John Radcliffe Hospital where he was diagnosed with various brain injuries.

Fortunately he survived but subsequently suffered from numerous symptoms including headaches, deficits in verbal reasoning, speech and language impairment. He was diagnosed with “very severe traumatic brain injury with subsequent cognitive, emotional and behavioural consequences”. He is unlikely to return to any form of paid employment.

Mr Major was arrested and charged with GBH. However, the criminal prosecution did not proceed as a result of a mistake made by the CPS.

In the High Court Judge Cotter QC described it as “…a brutal assault comprising…two phases separated by Mr Major being removed and held back by others, breaking free and returning to strike at a time when Mr Bellman, rather than being aggressive, was pleading with him to see sense.” The claim was reported to be valued at £1 million.

What is intriguing from a legal perspective is that the personal injury claim brought on behalf of Mr Bellman was directed not to Mr Major but to the employer, Northampton Recruitment Limited (and thereby for all practical purposes against the insurer of the insolvent company).

does anyone, including judges, know the correct approach to ETO dismissals and administrations?

In March 2011 I commented on the uneasy interplay between insolvency law and employment law. At that time the question was whether highly contentious “pre-pack” administrations provided an opportunity to dispense with a workforce as well as most of the company’s debts by using a TUPE exemption. Oakland v Wellswood (2008) appeared to allow administrators to do so, whereas OTG Ltd v Barke appeared to close that option.
Against this background Crystal Palace FC Ltd & Another v Kavanagh & Ors is a recent and significant Court of Appeal case dealing with the fairness of dismissals by administrators of struggling companies. In 2009 the finances of the company running the club were in a parlous state and it went into administration at the beginning of 2010. The administrator wanted to sell the business as a going concern, if he could. One obstacle to this was that the ground where the club played was separately owned, and the only credible buyer, a consortium, wanted the ground as part of the deal. The next month the ground’s owner was also put into administration by its bankers. Negotiations ensued which were complex, fast moving, and subjected to spin by the parties, but were not immediately productive.
The administrator decided to mothball the club once the season ended (with relegation narrowly avoided), in the hope of selling later. As part of that, in May 2010 he dismissed 25 employees who, he was advised, could be sacked without ceasing the core activities of the company. The administrator finally sold the company to a consortium in August.
An Employment Tribunal found that while the sale was not the reason for the dismissals, they were for a reason connected with the transfer. Normally such dismissals are automatically unfair. However it went on to decide that the dismissals were fair, being for an “economic, technical or organisational” (ETO) reason, in that reducing the wage bill would allow the administrator to keep the business going – a reason separate from the longer term objective of being able to sell the business later. (However, reducing the workforce to make the business more attractive to a buyer would not have been an ETO reason).
The Employment Appeal Tribunal disagreed with the Employment Tribunal about whether the dismissals were for an ETO reason. Because the administrator intended to sell the club eventually, the dismissals could not be regarded as for an economic reason, but could only be treated as being to facilitate the sale, applying the dictum of Mr Lord Justice Mummery in Spaceright Europe Limited v Baillavoine [2012] ICR 520 that:
For an ETO reason to be available there must be an intention to change the workforce and to continue to conduct the business, as distinct from the purpose of selling it. It is not available in the case of dismissing an employee to enable the administrators to make the business of the company a more attractive proposition to prospective transferees of a going concern.
The Court of Appeal in turn took the contrary view, because the circumstances in the present case differed from those in Spaceright – for example footballing is a seasonal trade, and the players tend to be its only realisable asset – and the EAT had put too much emphasis on the term “mothballing”.

administrations, TUPE and redundancies

It is an unfortunate fact of modern life that it seems that new administrations for high street retailers and other businesses seem to be announced almost every working day. A key concern in the context of employment law and, more importantly, for the employees concerned, is whether their employment automatically transfers to the new employer under TUPE or whether the new employer can "cherry pick" or perhaps even select none of the existing employees for the new business.
There has been conflicting case law in the last few years but it seems that we now have a clear statement from the Court of Appeal.