Tthe Forum of Private Business is reminding business owners and employees to be aware of the seasonal dangers which could potentially leave then with a nasty financial hangover long after the decorations have been taken down.

The festive period presents a number of issues, ranging from health and safety issues to staffing rotas, which can leave employers, open to litigation or staff disputes.

But as the Forum's managing director Ian Cass said: "With their mix of drink, high spirits and merriment, Christmas parties are still a source of potential problems for employees and employers if everyone does not act with some level of common sense.

“However this is not to say that the best course of action is to cancel the party as putting on an event can really improve staff morale and improve communications between employees that last well after the festive period fades. It has a financial upside to as up to £150 per head of the cost of holding the party is an allowable tax deduction and VAT can also be recovered on staff entertaining expenditure so can be a cost effective way of retaining staff"

In order to comply with workplace legislation, the Forum is advising business owners to:

• Avoid pressurising staff to attend Christmas parties. Some staff may not want to attend due to factors such as a general abstinence from drink, dietary issues or for religious reasons

• Let staff attending parties know in advance what acceptable standards of behaviour are expected of them. Make it clear that your usual disciplinary policies apply, even if the party is being held away from the workplace.

• Watch out for drug use! Under the Misuse of Drugs Act 1971, it is an offence for an employer to permit or even ignore drug use on their premises. Drug use in the workplace may also constitute a breach of health and safety regulations.

• Make it clear to staff if they are expected to turn up for work as normal the following day, hangover or not. Also don't forget to by example – research suggests that senior managers are more likely to call in sick the day after a Christmas party than junior staff members.

• Keep it clean and don't let the tipple flow too freely. Saucy gifts and games could easily lead down the dangerous path to a tribunal, while too much alcohol could spark arguments and fights, leaving employers dealing with tricky disciplinary issues.

• Employees as well as business owners should also remember to act professionally when socialising with staff and not let anything slip which they wouldn't do in the office, such as personal opinions of other employees.

Ian said: "No-one wants to put a dampener on the festive spirit and Christmas parties are great for boosting workplace morale and allowing staff to let their hair down. But business owners do need to take some important precautions if they want to guard against potential litigation but employees should behave themselves too.

"Most of the regulations which govern the normal working day also extend to the Christmas party, wherever it might be held, so employers need to ensure they're not leaving themselves open to claims, complaints and time-consuming employee disputes.

“However it is important for employees to understand that if they do overstep at the Christmas party there may well be repercussions and employees may be looking for a new job in 2016 if they do overstep the mark.

“We have already had a handful of cases where the members have wanted to take advantage of our insured advice to let employees go following an incident at the staff party which is a real shame.”