Should HR policies be included in Employment Contracts?

When advising clients on employment contracts, I will always ensure that any HR policies (grievances, disciplinary etc) are as an added appendix or part of a non-contractual staff handbook, this means that the policies are then easy to update as and when you want to.  Recent case law proves why this is important.

In Department for Transport v Sparks and others [2016] EWCA Civ 360, the Court of Appeal considered whether the High Court had correctly held that provisions relating to absence management set out in a staff handbook had been incorporated into employees’ contracts.

To summarize, the Department of Transport wanted to reduce the trigger points in its absence policy, but some of the policies in the staff handbook were noted as contractual – my understanding is that it wasn’t clear which were contractual and which weren’t.

The Court of Appeal has upheld the High Court’s finding that a provision relating to absence management set out in a staff handbook, including a “trigger point” (number of absences) which could lead to formal absence management, had been incorporated into employees’ contracts of employment. As a result of this finding, the High Court had declared that a new policy of attendance management (containing a new trigger point based on fewer absences) which the employer had purported to introduce was not effective to vary the contractual terms of the employment contracts and was not contractually binding on employees.

This means is that if you have a non-contractual staff handbook and you are wanting to update your HR policies, then that is perfectly okay – clearly you must communicate (and consult where necessary) the changes to all staff.  If the policies are contractual then you will only be able to make changes if you have the contractual right to do so, and not all contracts have this right.

So if you’re in any doubt at all, please do contact me and we can happily discuss it.

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