In Department for Transport v Sparks a dispute arose as to whether certain parts of the Department’s staff handbook were incorporated into employees’ contracts. The Claimants (7 in all) had obtained a declaration in the High Court that certain clauses in the Department’s Staff Handbook had contractual effect. The appeal to the Court of Appeal focused on a short-term absence management policy, which, if contractual, restricted managers’ scope for taking disciplinary action until specific trigger points had been exceeded, 21 days of short-term absence in any 12-month period.

The result of the decision on incorporation, was that the employer was only entitled to vary the absence management procedure in accordance with the handbook’s variation provisions. This meant that changes could only be made where the changes were not detrimental. The employer initially consulted with staff about a proposed detrimental change to the procedure (reducing the trigger points from as much as 21 days, down to 5 days) but, when that process failed, they proceeded to make the change without agreement.

A unilateral detrimental change was not possible in those circumstances, and so no change had been properly effected. The Court of Appeal declined to overturn the High Court’s declaration that the employees’ original contractual terms must be reinstated. Whether or not specific provisions (such as trigger points) contained within the relevant policy are found to be contractual will depend upon consideration of the terms and conditions of employment and the handbook documentation as a whole. On these particular facts and circumstances, applying normal contractual principles of incorporation, the specific terms were designed to confer a right on the employees over and above the good practice guidance and they were “apt for incorporation”.

The general introductory language to the handbook and the introduction to the chapter on sick leave both pointed towards contractual incorporation; the latter stating that the chapter sets out: “your terms and conditions of employment relating to sick leave” and “…to the management of poor attendance”. The triggers were not, therefore, just a part of a “framework for discussion” or “prompts for management”, following as they did introductory wording with this clear contractual “flavour”.

When is a Staff Handbook Absence Policy contractual?