A recent High Court decision in Sparks and another v Department for Transport provides useful guidance for employers in relation to making changes to staff handbooks.
In this case, there were 7 claimants, each employed by a different agency for which the Department for Transport (DfT) was responsible. Each agency had a “Departmental Staff Handbook” which was based on a standard form across the whole DfT. The relevant provisions in this case related to absence management procedure. The terms of the Handbooks were fundamentally the same for all agencies , save for the number of days of absence before an informal process was triggered. This varied from 8 days to 21 days (within a 12 month period).
The DfT sought to impose a new standardised attendance management procedure across all agencies. The new procedure imposed a uniform trigger point of 5 days or three occasions of absence within 12 months, whereupon an informal review meeting would be held.
Legally, a contract can only be amended in accordance with its terms and, almost always, with the agreement of both parties to the contract. Some terms may be incorporated into the contract from other sources, such as staff handbooks, but only if the particular term is “apt for incorporation”, i.e. being sufficiently clear and precise. Provisions that simply set out guidance/aspirations are unlikely to be apt for incorporation.
In this case, the Handbook was subdivided into “Part A” and “Part B”. Part A was explicitly stated to be incorporated into employees’ contracts. Part B was more focused on guidance and was not incorporated. The absence management provisions were contained in Part A. The court found that the intention of the DtT was that the whole Part A of the Handbook was intended to be contractual. A study of Part A however showed that this was not possible, as many sections were clearly intended as guidance and were not apt for incorporation. However, it found that the provisions in relation to absence management were sufficiently clear and precise, and therefore could be incorporated.
Further, although the variation provisions in the Handbook were unclear, they did provide that, before the DfT could make any changes to employee’s contracts, it would first have to go through a consultation procedure. If that procedure failed, the unilateral changes could be made, but only if they were not detrimental to employees.
Despite the DfT’s argument that the changes were apparently beneficial (allowing management to address sickness absence issues at the earliest opportunity), the court found they were detrimental. This was because the “trigger point” was lower and there was some evidence to suggest that employees were less willing to take proper and justified sickness absences in an effort not to trigger the absence management process (e.g. the employee continuing to work despite being knocked unconscious for a short period due to an accident at work).
The case provides useful guidance by giving examples of terms that are not apt for incorporation, e.g. a requirement that the employee must notify their line manager of absence by 10am, since an employee who called in at 10.05am would be in breach of contract.
Employers should clarify which parts of their handbook are intended to be contractual and draft the contractual parts very carefully so that they are apt for incorporation (as it may be that the parts that are drafted imprecisely and unclearly are deemed to be for guidance only). Equally, non-contractual parts should be clearly marked as such. Employers should also ensure that that the handbooks include appropriate provisions for variation.