Incorporation of company policies

04 May 2016

Employers should have a whole host of company policies, on everything from equality to data protection. While they’re expected to be followed, they are not necessarily contractual. And if they’re not contractual, it’s far easier for employers to change them.

Department for Transport v Sparks

Employers should have a whole host of company policies, on everything from equality to data protection. While they’re expected to be followed, they are not necessarily contractual. And if they’re not contractual, it’s far easier for employers to change them.

In Department for Transport v Sparks, the employer’s attendance management policy, contained in its handbook, said that disciplinary action in respect of cumulative short-term absences could only begin once an employee had hit the trigger point of 21 days off in any 12-month period. The employer tried to introduce a new policy which was less favourable to staff.

Ms Sparks and her colleagues argued that the original policy remained in place because it was contractual and couldn’t be unilaterally varied by the employer.

The Court of Appeal found in the employees’ favour. There was a distinct flavour of contractual interpretation in the way in which the handbook was introduced by the employment documents, the Court held. It was said to set out ‘many of your terms and conditions’. And the handbook chapter on health stated that it set out ‘your terms and conditions of employment relating to sick leave’ and ‘…to the management of poor attendance’.

It was more than good practice guidance. The policy that Ms Sparks and her colleagues had sought to rely on was, the Court said, apt for incorporation as a contractual term.

As fact-specific as this case is, it raises some universal points about aligning your paperwork with perceptions. Do you know what status your policies hold? Do your employees know? And are your company documents – your contracts, policies and handbook - doing their job properly? If not, it’s time for a review.


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