The Court of Appeal held that an absence management policy was incorporated into the employees’ contract of employment.


The absence policy stated that an employee had to exceed 21 working days’ absence in any 12-month period before the line manager could consider taking any action under the absence procedures which were contained in a document called Annex A, ‘Maintaining satisfactory standards of attendance’. The first action that could be taken following that trigger point being reached was an informal discussion with the employee, and, if absence did not improve then it could move on to a formal written warning.

The dispute was in relation to whether certain parts of the department's staff handbook were legally enforceable contractual terms or were mere notes of guidance and good practice of no legal force. The seven claimants had obtained a declaration in the High Court that certain clauses in the department's staff handbook had contractual effect. The appeal focused on a short-term absence management policy, which, if contractual, restricted managers' scope for taking disciplinary action until the specific trigger points had been exceeded.


The Court of Appeal held that the absence management policy had contractual effect which meant that a more recent policy of attendance management was not effective to vary the contractual terms of the employment contracts and was not contractually binding upon the respondents.


Whether or not a provision in a staff handbook is incorporated into individual employment contracts will always depend on the precise terms of the particular documents in each case. The best way to avoid the provisions becoming incorporated are to state that the handbook is non-contractual and ensure that the contracts of employment do not make reference to the handbook being part of the employee’s terms and conditions.