Businesses in the Birmingham area should be careful their Christmas celebrations do not turn into tribunal turkeys, warns law firm Shoosmiths.
More companies than ever - up to eight in ten this year - are saying "bah humbug" to Christmas parties mainly because of the spiralling costs.
Many more are wary of the potentially combustible effects of alcohol and overindulgence against an increasingly complex legal minefield.
Peter Duff, head of the employment team and partner at Shoosmiths' Birmingham office, said employers should be aware of how to manage problems that could occur such as violence and unauthorised absenteeism afterwards.
He said: "No business wants to be seen as a party pooper but employers do need to know what to do when a Christmas party gets out of control. In many organisations, the Christmas party is an annual reward for employees and everyone will enter into the spirit of the occasion without incident.
"Generous employers will want to create a festive mood, but unfortunately alcohol, or excesses of it, can lead to problems for businesses especially if they are the ones who supply it to their staff.
"Inhibitions are undoubtedly relaxed when the alcohol is flowing. If a claim was lodged by an employee over any impropriety at a Christmas party, a tribunal could find against the company if it was proved they encouraged a hard partying atmosphere by supplying abundant amounts of alcohol."
He cited the example of a beer company which organised a training seminar for three of its employees held at one of its hotels. The three delegates were told they could charge their drinks to their room bill, which the company would pick up.
As a result, one of the delegates became abusive to a senior manager and was told to tone down his behaviour.
The other two got into an argument with one throwing beer over the other. All three were dismissed but the dismissals were deemed unfair by a tribunal because the misconduct happened outside normal working hours and their drinking was funded by their company. However, their compensation was reduced because of their contributory fault.
Another risk posed by serving free alcohol is possible injuries to staff.
The Health and Safety at Work Act puts the company under a duty to take reasonable steps to ensure employees' safety at work.
The threat of violence can also provide an unwelcome undercurrent at Christmas parties.
Mr Duff said: "Most people are aware that if they punch a workmate at an office gettogether during working hours, they can expect immediate dismissal. But if an incident happens at a party outside work, the position is not so clear."
A possible by-product of excess alcohol was sexual harassment and Mr Duff warned new legal definitions which came into force last month would have serious implications for employers if a member of staff submitted a complaint.
"These new regulations now define harassment as unwanted conduct including verbal, non-verbal or physical conduct of a sexual nature that 'violates' a worker's dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment for a worker. This puts paid to excuses that harassment is 'just a bit of fun' or 'harmless flirting'.
"Party-goers should be aware that incidents involving touching or physical threats are criminal offences and should be reported to the police."
Other issues for companies to consider include the sending of inappropriate Christmas gifts such as hair tonic for a bald member of staff.
Mr Duff also reminded businesses to show sensitivity towards non- Christian employees because of their own religious traditions.
"Holding an alcoholic party in a bar could offend Muslims who do not drink or Jewish employees who have to be home before dusk on the Sabbath," he said. "Employers should consider alternative celebrations at which all their staff will feel comfortable."