The DfT is responsible for several agencies including the DVLA, Maritime and Coastguard Agency and the Highways Agency. All of these agencies operated a staff handbook that contained various workplace policies and procedures that were derived from the DfT. However, the individual agencies’ handbooks were not identical in all respects and there were subtle differences between them. One difference concerned the number of days’ absence that would be required to trigger the agencies’ formal absence management procedures (ranging between 8 and 21 days).
In July 2012 the DfT purported to introduce a new standardised absence management policy across all of its agencies. The new absence management policy confirmed that an absence management process would be commenced in cases where an employee had 5 days or 3 occasions in any 12 month rolling period.
Following the implementation of the new standardised absence management policy, several employees (one from each of the relevant DfT agencies) joined in a legal action (backed by their relevant trade unions) and applied to the High Court for ‘declaratory relief’ (a remedy that can be provided by the court in circumstances where there is a dispute as to the construction or interpretation of a contract or particular clause).
The employees argued that key elements of the relevant absence management procedures were contractually binding upon the DfT and that consequently the DfT’s decision (following a breakdown in negotiations between itself and the various interested unions) to unilaterally impose the new policy was unlawful.
The High Court determined that the provisions for attendance management set out in the relevant part of the relevant absence management policies had been incorporated into the employee’s contracts of employment. In arriving at this conclusion the judge noted that the DfT’s own handbook confirmed that the various policies and procedures set out in ‘Part A’ (which contained the absence management policy) were deemed to have contractual effect and that consequently the DfT’s decision to unilaterally impose a standardised policy was not contractually binding and constituted an anticipatory breach of contract. Moreover, the judge made it clear to the DfT that if the new procedure were to be applied in an individual case, then that would give rise to a breach of contract.
The DfT appealed the High Court’s decision on the grounds that the relevant parts of its staff handbook were simply not apt for incorporation into the contract of employment. The Court of Appeal disagreed and upheld the High Court’s finding that the relevant parts of the DfT’s absence and management policy had been incorporated into the employees’ individual contracts of employment; with Lord Justice McCombe stating:
“I see no inconsistency in the sickness management procedures being largely matters of guidance and good practice, but with specific provisions relating to that subject having contractual force, if that is the proper effect of the documents as a whole.”
Whilst decided on its own facts, the decision in this case serves as a useful reminder to employers that their workplace policies and procedures can sometimes be contractually binding and that changes which may have the effect of disadvantaging employees can not be imposed unilaterally without the relevant employees’ consent.
We often come across situations where employer’s unintentionally draft documentation without appreciating the need to distinguish effectively between contractual and non contractual terms. This situation commonly arises when companies purchase ‘standard form’ employment documents over the internet and/or from unqualified HR advisors who lack the knowledge and experience required to ensure that the employment related contracts and policies that they provide are tailored to suit the individual needs and requirements of a particular organisation or business.
We advise clients that wherever possible they should use a staff handbook which is separate and distinct from the contract of employment and that ideally a specific reference should be made to the fact that the handbook’s policies and procedures do not have any contractual force and/or effect.
Ensuring that you have the right range of workplace policies and procedures in place and that they are kept up to date is essential to the smooth running and operation of your business.
Certain policies and procedures are mandatory (e.g. disciplinary and grievance procedures) whilst other policies (e.g. capability and absence management) are optional. We work closely with our clients in order to develop and create policies and procedures which genuinely benefit their businesses and assist employees in understanding their rights, duties and obligations.
Please click here for more information on the types of policies and procedures that we are able to provide.
If you would like to discuss any issues raised in this article, we have specific employment law expertise in advising in this area. For further advice, please contact Nathan Combes.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.