In this case, the Court of Appeal gave a useful summary of case law about the approach to be adopted when deciding if terms are incorporated into the contract of employment.

The facts

An employer wished to change a provision relating to absence management which was set out in a staff handbook. Originally the number of days of absence required before a formal absence procedure could be triggered was between eight and 21 days. Under the new procedure, a process would be triggered after five days or three occasions of absence within a rolling 12 month period. The employer could not make this change unilaterally if the provision had been incorporated into employees' contracts of employment. The High Court, and then the Court of Appeal, decided that the provision was "apt for incorporation" and therefore had been incorporated into the contracts of employment, so the employer could not make the change.

The Court of Appeal emphasised that the question of whether or not a provision in a staff handbook is incorporated into the contract of employment will always turn on the precise words of the particular documents in each case. The Court of Appeal, referring to existing case law, gave useful guidance on the approach to be adopted when considering the problem of incorporation.

What does this mean for employers?

Employers who use handbooks which are specified as being completely non-contractual will have much more flexibility than employers whose handbooks are contractual or partially contractual. Employers who are drafting new handbooks should bear this in mind. However, historic arrangements and collective agreements mean that this level of flexibility is not always possible. Where the drafting of handbooks is unclear, this case may help employers and their advisors to work out the contractual status of provisions in the handbooks.

Department for Transport v Sparks and others