May 26, 2016

Incorporating terms of a staff handbook into a contract

A dispute arose as to whether certain parts of the Department staff handbook were incorporated into employee’s contracts. All 7 Claimants had obtained a declaration in the High Court that certain clauses had contractual effect. The appeal focussed on a short term absence management policy. If it was found to be contractual, it would considerably restrict the manager’s scope for taking disciplinary action until specific trigger points had been exceeded, namely 21 days for short term absence in any 12 month period.

In reviewing the test for incorporation of the handbook polices into the employment contract, the Court considered that the introductory wording of the handbook flagged up a “distinct flavour of contractual incorporation”. The fact that it might be generally desirable for matters such as absence management to be dealt with through a non-contractual policy, would not necessarily prevent a particular provision from being susceptible to incorporation if the wording indicated. This was in contrast to a policy which was stated as forming “a framework within which to approach such matters”, which would not be contractually binding.

In passing the Court observed that the fact the handbook was in electronic form only, and the previous versions had been irretrievably deleted without retaining copies, was unsatisfactory.

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