People and Employment

Can an employer unilaterally change staff handbook terms?

February 24, 2015

(Sparks and another v Department for Transport)

The seven claimants were each employed by a different agency under the Department for Transport (DfT). Each agency had a “Departmental Staff Handbook” (the handbook), that was based on a standard form across the whole of the DfT. The handbook stated that all of its terms that were apt for incorporation were to be incorporated into the DfT’s employees’ contracts of employment.

The handbook had two parts: Part A and Part B. Part A was explicitly stated to be incorporated into employees’ contracts whereas Part B was more focussed on guidance and was not to be incorporated. Part A included the provisions on absence management, one of which was a trigger point for an informal review if an employee had 21 days absence within a 12 month rolling period.

There were variation provisions in the handbook, which whilst not entirely clear, essentially provided that before the DfT could make any changes to the employees’ contracts, it would first have to go through a consultation procedure. If the procedure failed, then it stated that unilateral changes could be made but only if they were not detrimental to the employee.

In July 2012, after unsuccessful negotiations, the DfT informed the claimants’ trade unions that it would be imposing a new standardised attendance management procedure across all its agencies. This would involve an informal review to be held after the “first trigger point” of five days or three occasions of absence within a rolling 12 month period. The procedure then became formal after the second trigger point, and could lead to dismissal.

The claimants applied to the court for declaratory relief, desiring that their original contractual terms would not be altered, and arguing that the DfT and their agencies had breached their contract.

A key question for the High Court was whether the current attendance management procedure was ‘apt for incorporation’ and was therefore expressly incorporated into the employees’ contracts. The court found that the relevant provisions regarding trigger points in relation to absence management in Part A were sufficiently clear and precise to be incorporated. It commented that whilst many sections within Part A were clearly intended as guidance only and therefore were not apt for incorporation, the current trigger points were contractual and the DfT was not entitled to change them unilaterally. It also held that the changes were detrimental and did not accept the DfT’s argument that introducing an earlier trigger point was not detrimental.

Jo Tindall Says:  Of particular note is the useful analysis provided by the Court of which terms it considered to be “apt for incorporation”. For example, detailed provisions as to self- certification or submission of medical certificates within set periods of time were inapt for incorporation as it was not appropriate for there to be a breach of contract by an employee if a certificate was produced a day late or on an incorrect form.

This case also illustrates the danger of not providing clarity at the outset as to whether or not particular handbook terms are contractual. Generally, it is far more preferable to use a non-contractual handbook so can be varied where required. However, if particular handbook terms are intended to be contractual this should be expressly stated.

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