A group of employees (Sparks and Others) in the Department for Transport (DfT) applied to the High Court for a declaration that the staff handbook was incorporated into their employment contracts. The High Court agreed that they were incorporated, and that the DfT could not vary the terms without agreement from the employees. The DfT appealed the decision to the Court of Appeal in respect of the short-term absence management policy.
The effect of the absence management policy was to restrict disciplinary action for short-term absence to a trigger of 21 days in a 12 month period. If contractual the DfT could not deviate from this without being a breach of contract. For the employees this was an important term of the Handbook as it meant that the changes proposed would trigger the absence management policy and formal sanctions sooner than under their existing procedure.
The Court of Appeal dismissed the DfT’s appeal and gave guidance on whether terms of a staff handbook are incorporated into employee contracts, including:
- The issue will always depend on the precise terms of the documents;
- The wording of the documents as a whole;
- The contractual intention of the documents.
Peter Stanway, our BackupHR™ legal expert comments:
This case highlights the importance of ensuring that your Handbook of Employment Policies, procedures and rules is a separate document to employment contracts. It is also advisable to be clear that the policies and rules are subject to amendment by the employer at any time, in line with business needs. By regularly updating them, you are reinforcing the point that such employment terms can and will be regularly changed.
The Court of Appeal decided that looking at the language of the document, and specifically the attendance policy contained within the Staff Handbook, these were legally enforceable contractual terms rather than just notes of guidance and good practice with no legal force. In other words the relevant paragraphs were to be construed as conferring rights on the employee rather than merely setting out simply good practice which the employer intended to follow. Therefore the new policy of attendance management and specifically over the matter of short term absence triggers, introduced by the employer was not deemed effective to vary the terms of the employment contracts and so was not contractually binding on employees.
The Court were also critical of the fact that the Handbook and Procedures had been changed and there had been various versions created, but not all of the versions had been retained and so were not available for consideration.
Actions:
- Check what your contracts and handbook say about the terms;
- If you want to make changes to existing contractual terms, ensure that you seek advice before doing so;
- Make sure that within your Handbook it is clearly stated that the Employer reserves the right to amend terms when necessary and legitimate to do so;
- Even if your Handbook is not deemed to be contractual it is always advisable to undertake a consultation process prior to introducing an updated Handbook with varying terms;
- Ensure that you keep copies of earlier versions of Handbooks;
- If you are using a contract template you have obtained online or ‘borrowed’, get the documents reviewed now, before you need to rely on them;
- You may need to review your policies to ensure that they are up to date with constantly changing employment law requirements.
This decision highlights that each case will turn on its particular facts. You need good professional advice on making changes. Having contacts and handbooks drafted by professionals reduces the risk of ambiguity.
The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.
