You might often hear the phrase “a contract of employment is only as good as its policies”. It’s true. Policies are advantageous to both employers and to their employees. For employers it allows them to set out the standards expected of employees, the process when an employee falls below those standards and any other workplace customs which the employer has adopted and wants to retain. For employees, the policies inform them how they can raise a grievance, what the sickness reporting policy is, whether they are entitled to receive company sick pay, and a range of other information depending on the extent of the policies.

Case law has confirmed that it is not sufficient for an employer to simply have policies in place and leave them sitting somewhere no one can find them, or to not tell its employees that they even exist. They must be living documents which employees have easy access to and are familiar with.

What policies should employers have? ⚓︎

Each employer is legally required to have the following written policies in place:

• disciplinary policy;
• grievance policy;
• sickness absence policy;
• pension policy; and
• health & safety policy (if more than 5 employees).

Whilst not a legal requirement, it is highly recommended that employers also have an equal opportunities policy and a data protection policy. Based on current law, having an equal opportunities policy in place may help an employer establish the “reasonable steps” defence in workplace harassment claims, provided it was properly implemented and employees were given adequate training. Equally, having a data protection policy in place will demonstrate to the relevant authorities, particularly in the event of a data breach, that the employer has implemented steps to prevent unlawful processing of data or any possible breaches.

Contractual versus non-contractual ⚓︎

It is not realistic to be able to cover all workplace procedures in an employment contract. Instead, employers can choose whether to: (i) include all the policies within the employment contract; (ii) include certain policies in the contract and situate the others outside of the contract; or (iii) situate all policies out of the contract of employment.

When employers are making this decision, they need to be aware of some practical and legal issues. The main issue is whether policies are contractual or non-contractual. If the employer’s policies are contractual, any terms of the policy cannot be amended without discussing it with their staff and getting the employees’ consent to the amendment. The employer would not be able to unilaterally change the policy. This is inflexible for employers and prevents them being responsive to change or updates when required. In comparison, policies which are non-contractual allow the employer to amend and update the policies as and when required.

If policies are included within the contract of employment, the risk is that they will be deemed to be contractual, even if the employer states that the policies are not intended to be contractual. This may also cause confusion for both the employer and its employees.  Conversely, it is far easier to argue that policies are not contractual when they are situated outside of the contract of employment. It is good practice, even where the policies are situated outside of the employment contract to state at the outset of the policy that the policy does not form part of the employee’s contract of employment.

Do your policies reflect your intentions? ⚓︎

The importance of, and the risk of not, having policies which are both clear and reflect an employer’s intentions, is most clearly seen in the disciplinary sphere. An employer may not be able to rely on a certain provision in making a decision, for example that a particular offence is gross misconduct, if the policy is not consistent with this. It is therefore vitally important that the policies reflect the employers’ intentions or attitudes and that employers keep their policies under review and update them when necessary.

In Walters v Asda Stores Ltd ET/2312748/08, an employee was alleged to have posted comments on her Facebook site, which included “even though I’m supposed to love our customers hitting them in the back of the head with a pic axe [sic] would make me feel far more happier heheh”. She was dismissed for gross misconduct and the tribunal found, that as per Asda’s disciplinary policy, her conduct was classified as misconduct only, not gross misconduct and ruled that her dismissal was unfair. Asda’s case was further compounded by the fact that the internet policy had not been published at the time of the disciplinary hearing.

In Royal Bank of Scotland v Goudie UKEAT/0693/03, the employee received and forwarded pornographic images via his work email. RBS had created a matrix to grade breaches to help it identify whether an employee’s conduct was in breach of its IT policy. However, the matrix was not included in the IT policy and, crucially, the employee had not been shown the matrix in the course of the dismissal process. He was therefore unable to address the application of the matrix criteria to his case. The decision was ruled to be unfair.

However, to muddy the waters, in the case of Williams v Leeds United Football Club [2015] EWHC 376, the decision went the other way. The employee had received and then forwarded to a junior female work colleague, an email containing a spoof Powerpoint presentation that included a series of pornographic images. Even though the employee had not seen the policy, which the employer had relied on to dismiss the employee, the decision to dismiss was lawful because the employee should have been aware of the graveness of his actions without the need for a policy.

Conclusion ⚓︎

As an employer, you should review your existing policies to check that they reflect your current business practices. If they do not, you should amend them so that they do, subject to any employee consent that may be required. If you do not yet have policies in place, ensure that you have the policies that you are legally required to have in place at the very minimum. Make sure you are clear on whether they are contractual or non-contractual.