It was the first hot day of the summer, and your first summer since you began your new job in January. You consider whether you can part from the usual office uniform (for men) of a suit and tie. First you consult the staff handbook; it very clearly says “there is no dress code”. However, a more recent email on the subject says, equally clearly, “always wear a tie”. You have to get this right! What do you do?

Ok, so this example shouldn’t overly tax this diligent employee. (He can always go in a suit and tie and look around to work out the etiquette.) But in other circumstances, conflict between the words of a contract, a handbook or a later policy can be serious – otherwise the issue would not have reached the Court of Appeal just recently in relation to sickness absence. I doubt many of you wish to read the case – the sentence quoted is about the least dense part of it – so I will provide just a few pointers:

  • Sometimes a handbook or other policy document is part of the contract of employment. Other times, it will contain guidance that does not have the force of the contract. Whether the policy is contractual depends on whether the agreed contract provides for its incorporation, as well as whether the terms of the policy are apt for corporation.
  • An employment contract, like any other contract, is agreed between the parties and can only be varied if the terms of the contract allow for this already or with agreement between the parties.
  • So, if a policy is contractual, the employer cannot unilaterally decide to change its policy at a later date.
  • It’s advisable to keep policies as guidance rather than to make them part of an employment contract because this gives you the greatest flexibility. That said, as the judge determined in this particular case, even a contractual policy should still enable employers to take a constructive and flexible approach to issues that arise, provided there’s no attempt to change contractual terms where that right is not provided for without having the employee’s consent.

There are advantages and disadvantages of making employment policies contractual and often it comes down to employer intentions and preferences, including how much flexibility is desired. It is essential, however, to consider the matter carefully. As this case shows, even government departments can slip up. So if you want clarity in your relationships with your employees (definitely advisable), take care about what’s written in their employment contracts and always try to avoid contradicting it at a later date. A tie can easily be removed; managing sick leave and employee absences can be rather more sensitive and often carries more far reaching consequences.

More information on contracts and handbooks can be found on our website.