Contract v Handbook

Under section 8(1) of the Employment Act 2006 of Tynwald (as recently amended by the Employment (Amendment) Act 2024), every employer is required to provide an employee with “written particulars” of their terms of employment. This must be issued to the employee no later than the beginning of the employee’s employment and typically takes the form of a contract of employment.

A contract of employment is a legally binding agreement between employer and employee which covers the terms and conditions of employment specific to the employee. Section 8(3) of the Employment Act 2006 sets out certain information which must be included within the employment particulars, such as the employee’s working hours, rate of remuneration, start date and the likes.

Unless stated otherwise, the staff handbook is normally a non-contractual document which sets out a company’s policies and procedures as well as any missions and values of the company. Certain parts of the staff handbook can become legally binding where they are explicitly referred to in the employment contract (otherwise known as “incorporated terms”).

Making changes to the staff handbook

As the staff handbook is a non-contractual document, an employer has the flexibility to make any changes to the handbook as it sees fit. Indeed, there should be regular reviews of a company’s staff handbook to ensure that it is compliant with current legislation and reflective of the operations and culture of the company.

There is no legal requirement for employees to be consulted in respect of non-contractual changes to the staff handbook, which often fall within the remit of a variation clause within the employment contract. Employees should, however, be informed of any changes or amendments made and an employer may wish to consider whether any training or feedback mechanism is required to ensure that the policies and procedures, along with any subsequent changes to the same, are understood by the employees. Handbooks should be made readily accessible to staff for obvious reasons, normally by the employer’s intranet.

Amendments to a staff handbook should be considered carefully by the employer to ensure not only that the employer remains compliant with current legislation, but also that the employer does not inadvertently create any legal obligations which they might later find themselves bound by.

What should a staff handbook contain?

The handbook should signpost important information about the company’s operations, ethos, policies and procedures. Ideally it should be a useful tool when introducing a new employee as well as a resource for long-standing employees.

Some policies and procedures which are typically contained within the staff handbook include:

• Health and Safety at work
• Grievance and disciplinary procedures
• Benefits (where applicable)
• Maternity/paternity/parental leave
• Equal opportunities and anti-discrimination

In the event of a dispute, the Tribunal will look to the policies and procedures in place within the company and whether the employer and employees’ actions accord with said policies and procedures. The language used within the staff handbook should therefore be clear and concise so as to allow employers and employees to easily navigate the various policies and procedures in place.

Staff handbooks are an integral tool for defining and supporting a good workplace culture, but their legal status can be more complex than first assumed. What seems like merely guidance can in fact be legally enforceable, and vice versa. The Tribunal will consider the staff handbook both in theory and in practice when determining disputes. Whether you are updating your handbook or challenging one, it is always wise to seek tailored legal advice to ensure you are compliant and protected.

Advocate Lizzie Beard is a member of M&P Legal’s employment team. This article is not legal advice. Always seek specific legal advice on the facts of each particular case.

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