Handbooks, policies and contracts best practice

A question we are often asked by employers is how often handbooks, policies and contracts should be reviewed.

Our advice would be no less than every two years and if you were being very vigilant, every year.

The reality of keeping on top of these documents for businesses can be quite different though, especially for those that don’t have an in-house HR team to manage this.

Why it’s important contracts are kept up to date

Contracts should be an accurate statement of the main terms of employment agreed between employers and employees – and should be updated whenever there is an agreed change. That can be done either by issuing a revised contract or by a letter of variation, setting out only the changes that have been agreed.

Employers and employees both bear the responsibility for checking that the contract does set out all the agreed terms, which is why it’s important that any changes discussed and agreed verbally are then confirmed through a written update.

As companies grow and their overall workforce size starts to increase, it’s also good practice to try and maintain a level of harmony and consistency between the contracts of new employees versus longer term staff.

Reasons to review and update contracts

Employers should review contracts regularly to ensure they keep up with job changes of existing employees, not just in terms of the literal role and responsibility change, but also to consider any new aspects that might need to be included as part of their new role.

A good example of this would be an employee taking on a more senior role and as a result becoming exposed to more market sensitive and confidential information. Here the employer should update the contract with relevant clauses around confidentiality, intellectual property and restrictive covenants, all of which may not have been part of their existing contract in their previous role but is now warranted.

How often does new legislation affect policies and contracts?

Under normal circumstances new legislation that underpins employment law rights and can affect policies is usually issued twice a year, but the pandemic has slowed that process down substantially over the last couple of years. There is always new caselaw being decided that can alter best practice which employers may want to introduce into policy.

Handbooks and policies are non-contractual documents and should be stated and communicated as such. They provide a guideline to the rules and regulations a business wishes to apply to its operations and are not legally binding. They should reflect both the employer and the employees’ expectations of how each will behave in any certain situation and should be reviewed and updated regularly.

In contrast, a contract is a legal document that is fully enforceable in the event of a breach of the conditions within it, by the employee or employer. Care should be taken in the language used within all these documents to make clear which are legally binding, and which are not.

What is usually covered in a company handbook?

A staff handbook is there to set out policies, procedures and rules for all employees and can also help with forming the culture within your business. It can cover a multitude of different topics but most commonly would include information on different types of leave, sickness and absence, disciplinary and grievances, standards of behaviour, health and safety, diversity and inclusion and data protection information.

How contracts, handbooks and policies should work in practice

Whenever a situation arises between employer and employee both the contract and the handbook or policy should be consulted to guide the rights and wrongs of the situation and ensure each party has acted in the manner anticipated by the agreement between them and the employer’s policy.

It’s the first place we look when asked to advise on any areas of conflict between a business and its employees, so it’s important that these documents are readily available and accurately reflect how a business works and its current approach to management, as well as being legally compliant. Missing copies of contracts and out of date handbooks and policies can complicate the resolution of a dispute and lead to a lack of trust between the business and its employees.

Contract, handbook and policy updates post covid-19

With reduced resources and a focus on survival during the pandemic, some employers may not have had the opportunity to keep all their key documents up to date. As we return to business as usual during 2022 it should now be a priority to review and amend them as necessary to ensure they reflect any changes that have taken place in terms of legislative updates, best practice and the changing needs of the business.

Covid-19 has required many adjustments to working arrangements, including work-from-home, flexible working and in some cases now, the task of getting all staff to return to office working. All of these will likely have an impact on the content within contracts, handbooks and policies and may also create new training requirements.

Our team are on hand to advise and guide you on updating existing contracts, handbooks and policies or helping you to create brand new ones for your business. We can also offer a more complete outsourced HR solution if you don’t have your own team in-house.

Contact us today for an informal chat about how we could help.