Topic of the Month: Alcohol Liability

What is “Employer Host Liability?”

Now that summer has arrived, some workplaces will be hosting corporate parties, events, and other work-related functions. Before a workplace or employer makes alcohol available at these functions, it is important that they understand their legal responsibilities. The term “employer host liability” refers to the civil liability employers potentially face when hosting, organizing or sponsoring events which involve alcohol.

There are two main types of alcohol-related liability that employers should be aware of:

1. Provider Liability - occurs when employers provide or make alcohol available to intoxicated individuals who then injure themselves or others
2. Occupier Liability - occurs when alcohol-related injuries occur on the property of the employer (or the property the employer rents) even if the employer did not provide the alcohol

What can employer host liability cost businesses?

Although the cost of liability will vary with each case, employers found liable in court can expect significant financial losses.

Hunt v. Sutton Group Incentive Realty Inc. and Jacobsen v. Nike Canada Ltd. are two examples of Canadian employers that were held partially liable for a car crash caused by an impaired employee.

Some of the costs they faced included:

• Legal costs
• Punitive damages awarded to injured parties

Liable workplaces may also face other costs, including:

• Productivity losses due to worker injuries or absenteeism
• Increased workplace insurance costs
• Indirect costs such as compromised reputation

What can workplaces do to protect themselves from liability?

Employers can minimize their risk of host liability by taking the following steps:

• Choose to have an alcohol-free event. There are many great tasting non-alcoholic cocktails that can be used at company functions instead of alcohol
• Develop a comprehensive workplace alcohol policy (PDF 111KB, 6 pages) which includes rules and regulations for day-to-day work activities and for events where alcohol will be available
• Educate employees about the policy and promote it at training sessions and health and safety orientations
• If you do choose to include alcohol at your event, follow these tips for a safe event (PDF 63KB, page 2-3) recommended by Alcohol Policy Network.
• If you rent your facility to others for special events, reduce your occupier liability risk by following these guidelines

What can individuals do to stay safe?

Although employers are responsible for the safety of guests when hosting events, each individual is also accountable for their own actions. Getting intoxicated at a company event can have consequences. If you plan to consume alcohol, minimize risk by incorporating these tips:

• Read and abide by your workplace alcohol policy if there is one in place
• If you choose to drink, follow the low-risk drinking guidelines
• Limit your consumption of alcohol and space your drinks at least an hour apart
• Alternate alcoholic and non-alcoholic drinks throughout the party to cut down on the amount you drink
• Consume alcohol with food
• Create a travel plan to ensure you arrive home safely.  Options include using public transportation, a taxi, or having a pre-arranged designated driver

Facts & Stats

• The number and kinds of alcohol-related court claims have increased sharply in Canada during the last 30 years (PDF 913KB, 10 pages), and several of the most controversial cases in recent years have involved employers.
• In 2002, Canadian workplaces paid out $61.5 million dollars (PDF 144KB, 14 pages) for workers’ compensation claims attributed to alcohol.
• In 2002, alcohol accounted for about $7.1 billion  in lost productivity for Canadian workplaces (PDF 144KB, 14 pages) due to illness and premature death.
• Workers are less likely to drink heavily, frequently, or at work if companies discourage drinking.
• Workplace culture impacts consumption. Employees whose co-workers drink together are more likely to report absenteeism, reduced productivity and on-the-job injuries (PDF 824KB, page 5).

Additional Resources

• MADD (PDF 913KB, 10 pages) – An Employer’s Guide to Understanding and Avoiding Workplace Liability
• Alcohol Policy Network – Sample Workplace Policies from Various Sectors
• AHS - Alberta Health Services – Addiction & Substance Abuse – Information for Workplaces
• Canadian Centre for Occupational Health and Safety – Workplaces and Substance Abuse
• Canada Safety Council – Social Host Liability
• Canadian Centre on Substance Abuse

Contact Peel Public Health by e-mail or at 905-799-7700 for additional information on employer host liability.

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