The Court of Appeal has found that there was nothing to prevent the absence management triggers set out in an employee handbook from being incorporated into employees' contracts of employment, where the relevant provision was apt for incorporation and the words introducing the handbook into the employer/employee relationship had the "distinct flavour of contractual incorporation" (Department for Transport v Sparks & Ors, CA).

The Court of Appeal has upheld the High Court's earlier decision that, on a proper construction taking into account all of the relevant material, an absence management procedure had been properly incorporated into the employees' contracts of employment.  You can read our report on the High Court decision (which sets out the background facts of this case) here.

The result of the decision on incorporation, was that the employer was only entitled to vary the absence management procedure in accordance with the handbook's variation provisions.  This meant that changes could only be made where the changes were not detrimental. The employer initially consulted with staff about a proposed detrimental change to the procedure (reducing the trigger points from as much as 21 days, down to 5 days) but, when that process failed, they proceeded to make the change without agreement.

A unilateral detrimental change was not possible in those circumstances, and so no change had been properly effected. The Court of Appeal declined to overturn the High Court's declaration that the employees' original contractual terms must be reinstated. 

Lord Justice McCombe saw no inconsistency in the sickness management procedures being largely matters of guidance and good practice, but with specific provisions contained therein having contractual force. Whether or not specific provisions (such as trigger points) contained within the relevant policy are found to be contractual will depend upon consideration of the terms and conditions of employment and the handbook documentation as a whole.

On these particular facts and circumstances, applying normal contractual principles of incorporation, the specific terms were designed to confer a right on the employees over and above the good practice guidance and they were "apt for incorporation" (if they had been set out in the same terms in a formal contractual document it could not seriously be argued that as a matter of construction they were not apt for a contractual term).

The general introductory language to the handbook and the introduction to the chapter on sick leave both pointed towards contractual incorporation; the latter stating that the chapter sets out: "your terms and conditions of employment relating to sick leave" and "…to the management of poor attendance". The triggers were not, therefore, just a part of a "framework for discussion" or "prompts for management", following as they did introductory wording with this clear contractual "flavour".

Comment

Most employers will, no doubt, agree with Lord Justice McCombe's sentiment that it: "may be a generally desirable feature of industrial management…to handle these matters through non-contractual policy", but employers with historical, ambiguously worded or collectively agreed handbooks will often be faced with the difficult task of assessing the contractual status of specific provisions in their handbooks.

This case offers a useful overview of the authorities in this area, an explanation of the approach the court will adopt in ascertaining status, and offers a useful example of a set of circumstances in which the relevant provisions were found to have been incorporated.

Department for Transport v Sparks & Ors