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Making sure your handbook is fit for purpose

Following on from our series last year looking at key employment contract terms, we are now turning our attention to employee handbooks and the dos and don'ts employers need to consider when putting together policies and procedures within those handbooks.

Background: Why do policies and procedures matter?

Policies and procedures set a common standard for employers and employees. They stand as a record of expected behaviours for employees and serve both to guide the employer through common workplace problems and to ensure that an employer is taking a consistent approach when tackling issues such as acts of misconduct, grievances and sickness absence.

Policies and procedures also serve to set a standard both in terms of an employer's outlook and ethos as well as providing a first line of defence in the event of an employment dispute.

Essential v nice to have

The strict letter of the law does not oblige an employer to have a significant number of policies in place. The Employment Rights Act 1996 (ERA) requires that the contract of employment either contains or makes reference to other documents dealing with disciplinary procedures, grievance procedures and terms and conditions relating to incapacity for work due to sickness or injury, but does not specify a need for further policies.

Notwithstanding the strict legal position, employers are well advised to consider putting in place policies beyond the essential disciplinary, grievance and sickness absence policies required under the ERA. Indeed, the ERA does not require even these policies to be particularly comprehensive, but employers should ensure that their disciplinary, grievance and sickness absence policies are among their most robust.

While what constitutes an essential policy will vary from business to business, all employers should have an equality and diversity policy and health and safety policy in place. Most employers should also consider policies dealing with whistleblowing and bribery as these are areas in which policies and appropriate training can mitigate the risk of such issues arising in the workplace and serve as an employer's first line of defence should a dispute arise. Policies covering appropriate use of IT and social media will also be important for the majority of employers and should tie in appropriately with data protection policies.

Policies dealing with parental rights and flexible working are useful for both employers and employees, not only to set out the employer's offering, but to ensure the relevant eligibility criteria, notification requirements and procedures (which can be complex) are clear to both parties.

Policies covering miscellaneous topics such as smoking, expenses, dress codes and severe weather are not necessarily essential, but are certainly useful and worth considering.

Contractual v non-contractual

In the majority of cases, it is sensible for an employer's policies to be non-contractual. Having non-contractual policies in place means that an employer will retain the flexibility to amend policies as the needs of the business evolve and to ensure that the policies can be updated to reflect legislative changes and best practice without the need for extensive employee consultation.

A contractual policy binds both employee and employer and it is difficult for an employer to legitimately amend such a policy without consultation with employees.

Employers should be aware that even a non-contractual policy can acquire contractual force through custom and practice, so it is important to keep policies, particularly those which provide for payments to employees, under regular review.

Breaking down the handbook

In the remaining articles in this series we will offer advice on various policies common to an employee handbook including: disciplinary and grievance procedures, absence management processes, dignity at work, capability procedures, family friendly policies and drugs and alcohol policies. We will look at what these policies should cover and common pitfalls in drafting and applying these policies. We will finish the series by looking at practical steps employers can take to implement new policies and/or update existing policies.

We are not intending to cover data protection policies in this series as these will be looked at separately as part of our ongoing GDPR updates.

Next time...

Later this month we will be looking into disciplinary and grievance procedures in detail, offering practical tips on how these should be drafted and key provisions to include.


This information is for educational 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. © Shoosmiths LLP 2022.


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