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Employment Law

Legal guidance - compliance - software

03 MAY 2016

A cautionary tale for contractual staff handbooks

A cautionary tale for contractual staff handbooks
Jessica Ryan
Solicitor, Veale Wasbrough Vizards

A recent Court of Appeal decision highlights the limitations of contractual staff handbooks for employers.

In Department for Transport v Sparks and Others, seven claimants were employed by agencies for which the Department for Transport (the DfT) was responsible. Each agency had a staff handbook containing similar absence management provisions, including trigger points of between 8 and 21 days for formal absence management (trigger points).

The handbooks were divided into two sections, the first of which contained the trigger points and was expressly stated to be contractual.

The DfT unsuccessfully negotiated with staff to reduce the trigger points. In the absence of staff consent, the DfT then purported to impose a new absence of management policy, which included the reduced trigger points.

The High Court held that the absence management provisions contained in the staff handbook were 'apt for incorporation' into the employment contract. In addition, as the absence management provisions were expressly stated to be contractual, the DfT was unable to treat them as non-contractual when it was not possible to agree proposed changes.

Best practice

This case demonstrates the difficulties that can arise when attempting to vary contractual policies and procedures. In the absence of staff consent to the proposed variations following consultation, employers are left with the choice of imposing change or dismissing and offering re-engagement. Both of these options throw up challenges and should be treated as a last resort. Imposing change may result in employees resigning and claiming constructive unfair dismissal.

There may be some elements of a staff handbook that are clearly contractual. Best practice would be to clearly separate the contractual elements from the non-contractual.

This case involved absence management provisions. If preparing a new staff handbook, an employer would be likely to want to expressly label such provisions as non-contractual and ensure that any related employment contract contained an 'entire agreement' clause, excluding any ancillary documentation from having contractual effect.
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