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Can Employers Unilaterally Change Handbooks If They Contain Contractual Terms

22 April 2016: Can Employers Unilaterally Change Handbooks If They Contain Contractual Terms?

It is generally sensible for employers to expressly state that handbook policies and procedures are non-contractual. By so doing, the employer can change its own policies more easily in the future.

 

This came up in Department for Transport v Sparks and others [2016] this week in which employees argued that a Handbook Sickness Management Policy was contractual, and the DfT could not unilaterally change it.

 

Ordinarily, contractual terms can only be amended or varied with the express or implied agreement of employer and employee. The handbook required the DfT to consult before it could make any changes to employees’ contracts. If agreement was not reached, the DfT could not make unilateral changes if they were detrimental to staff.

 

Following unsuccessful negotiations, the DfT tried to impose a new, more stringent, attendance management procedure on staff. The employees argued that this was a contractual policy, and the new procedure could not be imposed because it was more detrimental to them.

 

The High Court held that the handbook attendance management procedure was contractual.  The DfT had intended that part of the handbook to be contractual. Even though many sections were clearly meant for guidance only, the provisions on absence management were sufficiently clear and precise to be incorporated as contractual terms. The new provisions were more detrimental to staff and could not be imposed under the handbooks’ own rules.

 

Each case turns on its own facts, but if the DfT had been more careful about ensuring that the handbook was non-contractual, it might have been able to change its own policies more easily. Employers can sometimes impose unilateral changes, but this must be done carefully (see our report on Norman v National Audit Office)

 

See our other posts on our website. We advise on employment contracts and employment law.

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