With a potentially explosive mix of office politics and alcohol to contend with, holding the office Christmas party can seem like a risky business. Christiana Tollast examines how employers can ensure staff behaviour does not descend into something resembling closing time at the Queen Vic.

So what is the biggest risk to look out for when planning the Christmas party? Paul Avis, corporate development manager at Ceridian, sums it up in one word: "Communication. Or rather, a lack of it. In the eyes of the law the Christmas party is seen as an extension of the workplace which means that behaviour considered inappropriate in the office is also inappropriate in social situations."

It is crucial then, that an employer gives clear boundaries to staff prior to the event, on expectations regarding staff behaviour. In the lead up to the party employers should be referring staff to any company policy or guidelines in place, that cover acceptable behaviour in the workplace and also to any policies relating to substance and alcohol abuse.

"This can be via an email, newsletter or on a notice board," says Sandra Beale, an HR consultant. "It is all about letting people know that they must act in a responsible manner, and if the party is held mid week, this extends to the conduct of staff the day after the night before."

For example, consider in advance how to deal with any possible staff absences the next day. Avis suggests deterring worse for wear staff from throwing a 'sickie' by making clear beforehand that self certification will be removed, so anyone taking the day off will need a doctor’s note, or must take it as holiday.

So what could be deemed as unacceptable behaviour? Beale gives some examples: "Misconduct could be verbal abuse, swearing or shouting at a colleague, whereas gross misconduct could be a physical assault on another employee."

When it comes to alcohol, Paul Avis advises employers to think through their duty of care. "If you have an open bar, people will always drink to excess. An obvious and sensible precaution is to limit the amount of alcohol given to employees at the party."

A Christmas party, but not as we know it…

Shock horror! There is no statutory requirement that the Christmas party has to involve a dodgy disco and alcohol.

"It doesn't always have to be about going out and getting drunk. One year our company organised a trip to France on an overnight ferry and another year, we took everyone to the pantomime and for dinner afterwards," recalls Avis.

Beale suggests providing a list to staff of several alternative suggestions and asking them to decide on the event.

When it goes wrong

Sometimes, no matter how much planning and preparation goes on, there will be times when things do go wrong and the statutory grievance and disciplinary procedures must be followed immediately.

"If, for example, someone raised their hand to another employee at a party, then without a doubt, come Monday morning, the member of staff would be suspended until a full investigation took place," says Verity McVarish, HR manager for Sift Group. Crucially, as McVarish points out, if a company does not follow these statutory procedures, and a dismissed employee decides to take a case to an employment tribunal, the employee would have a pretty solid case against the company because they had not followed the correct disciplinary procedure.

If however, after a full investigation there is any doubt whatsoever as to whether disciplinary action against an employee should be taken, Beale gives a word of caution: "In my experience, if the panel is not quite sure what decision to make, then it is sometimes best to issue a final written warning instead of dismissal." And it is important to remember here that whether the outcome is a warning or a dismissal, the employee is allowed to appeal.

Held to account

It is not just the employees who can be held accountable for their actions. The protection against harassment act suggests that the employer can be held liable for any act of harassment on a member of staff. Charles Price, barrister at No.5 Chambers, enlarges on this: "The statute makes it clear that the employer can be held vicariously liable or can be held responsible potentially for the act of the employee."

Price also points out that a company can potentially be held liable to third parties for the behaviour of their employees, and also, for drunken employees causing themselves personal injury.

However, if a company has issued guidelines of what they expect of their employees in terms of their behaviour, in the event that a case were to be brought against a company for the actions of an employee, the policies would protect a company to an extent. "The employer must warn its employees to behave reasonably and drink reasonably," adds Price.

Is it worth it?

With all the potential pitfalls, is the Christmas party still worth the bother? McVarish considers the Christmas party at her company to be a great reward and motivator: "It is a celebration of the year and a time to acknowledge those who have been outstanding."

The latest CIPD Annual Reward Management Survey 2008 highlights the importance of rewarding employees during difficult times to promote employee engagement and in turn, better organisational performance. With the economic climate looking ever gloomier – has there ever been a stronger argument for bringing staff a little bit of cheer this Christmas?