The tribunal in Plymouth, Devon, was told how Bill Smith, 48, also told one employee that she was a "terrifying black lesbian". During the party a salesman danced with a blow-up sex doll and the girl who won the biggest breast award collapsed and had to be treated in hospital for alcohol poisoning.
Mr Smith, chief executive of Derbyshire-based Servo Computers, was accused of simulating sex while telling a dirty story during his speech and a salesman stripped off his shirt after being voted a Chippendale by the girls from the tele-ads department. His performance was experienced first-hand by the tribunal panel when a 70-minute videotape of his speech was played to the hearing.
Two women were so shocked by his behaviour at last July's event that they later left the firm and are now suing Mr Smith and the company. Sales manager Joanna Traynor, 33, and Deborah John, 34, from Plymouth, allege Mr Smith's behaviour amounted to sexual harassment and was contrary to the Sex Discrimination Act.
Miss Traynor, who quit her pounds 25,000-a-year job after the dinner at Thornbridge Hall, Derbyshire, last July, said Mr Smith was "dirty, rude and degrading" and had abused his position. Mr Smith and Servo Computersdeny that any of the behaviour constituted sexual harassment.
The case continues today.