Employment policies: an essential tool for employers
Author: Kate Woodhouse
Applies to: England, Wales and Scotland
Drafting, updating and implementing employment related policies can be time consuming and is often at the bottom of an employer's to do list but, a well drafted, properly implemented policy can be invaluable.
Why are they so important?
Employment policies can provide guidance for employees and managers on a wide range of issues from disciplinary matters to dress code, they also allow employers to regulate the workplace and manage expectations. In many cases employment policies will be highly relevant and referred to on a day to day basis.
What can they do for an organisation?
Employment policies help an organisation maintain consistent practices which can help to prevent dissatisfaction amongst employees. They can also be used as a performance motivator for employees detailing information about a firm's culture and values and showcasing the benefits or rewards it offers.
But perhaps most importantly from an employer's perspective, policies can provide valuable legal protection for example, in a situation where it would be vicariously liable for the actions of its employees unless it can show it took all reasonable steps to prevent the actions. Policies which clearly set out employees' obligations or prohibited conduct in respect of compliance with relevant legislation (for example with the Equality Act 2010) will assist an employer in defending claims (providing the policy relied on has been properly implemented).
What form should they take?
Employment policies are usually collected and contained within a staff handbook. From an employer's point of view, it is far preferable for policies to be non-contractual rather than a contractual term of employment, because this will avoid having to obtain employees' consent before varying or discontinuing a policy. Care should be taken to ensure drafting is such to avoid a contractual right arising through 'custom and practice'.
How should they be implemented?
Communication is key to ensure effective implementation of policies. In the first instance employers should ensure all employees are made aware of the policies operating across the business and where they can access a copy of them. If an employee is not aware of a particular policy an employer may not be able to discipline them for failure to comply with it. If any policies are updated from time to time employers must ensure all employees are made aware of this.
The most obvious time to raise awareness of policies is when an employee commences employment - as such all new starters should be provided with copies of relevant policies and asked to acknowledge they've read them in full and understand the contents.
To ensure continued compliance with policies employers should reinforce their contents through regular training sessions and group discussions with employees. The requirement for training applies even more crucially to managers who will have responsibility for implementing the policies in practice throughout the business.
Managers should be trained in fairly and consistently applying the provisions of policies to ensure that the business does not fall foul of its own obligations. For example, a manager following the steps of a capability policy correctly (which ultimately results in an employee's dismissal) could make the difference between the employer winning or losing an unfair dismissal claim.
The events surrounding Charlotte Hogg, the (until recently) deputy governor of the Bank of England, also serve as a cautionary tale for employers. Ms Hogg fell foul of an internal policy (which she had assisted in drafting) by failing to disclose a potential conflict of interest. From an employer perspective this highlights the importance of ensuring HR and management fully understand policies to avoid potentially embarrassing scenarios or inconsistency of treatment.
Tips for employers
- The value of policies lies in their relevance. Employers should periodically review documents to ensure policies are appropriate and remain compliant with employment law and best-practice. Employment law is fast moving, already in 2017 there have been a diverse range of developments, including changes to trade union legislation, gender pay reporting requirements and an increase in the national living wage (all of which may need to be reflected in internal documents). Employers should therefore consider putting a policy update process into place which occurs at least every 12 months (although a more frequent review may be required in some circumstances.)
- Make sure policies are clearly drafted to avoid ambiguity as to the meaning and in language which can be easily understood by employees. Consider if consultation with employee representative bodies or trade unions would be helpful before introducing a new policy.
- Ensure that policies are properly tailored to both the nature and size of the organisation - there is little point in having a comprehensive staff handbook which is based on there being several layers of management to deal with issues if the organisation only employs a handful of people.
- Provide timely reminders that employees are required to adhere to the organisation's policies. For example, reminding employees of the organisation's code of conduct before a social event or the Christmas party.
- Make it clear if a policy is intended to be non-contractual and subject to change at the employer's discretion. Where a policy is intended to be discretionary, consider whether it needs to be added to the staff handbook for all to see or whether it should instead be distributed to a smaller group who will be responsible for implementing it. For example, often an employer should keep discretionary redundancy terms within the senior management or HR team only.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.