Can an employer unilaterally change the terms of its contractual staff handbook? No, said the High Court in the case of Sparks and another v Department for Transport.
Generally, a contract may only be amended in accordance with its terms or if the parties agree (see our article on changing contract terms at the National Audit Office. Therefore, an employer cannot usually impose contractual variations against the will of its employees.
In this case, the employer had a staff handbook which stated that its terms (where possible) were to be incorporated into the employees’ contract of employment.
In July 2012, the employer sought to change its handbook and impose a new standardised attendance management procedure which the employees believed would be detrimental to them. The employees brought a claim in the High Court, seeking a declaration that the new procedure would not apply to them.
The High Court held that the terms of the staff handbook had been incorporated into the employees’ contracts and therefore could not be changed without the employees’ express agreement. Therefore, the new standardised attendance management procedure would not apply to them.
Employers who state that staff handbooks or employment policies form part of the contract of employment or have contractual effect will usually face difficulties when trying to amend them.
Instead, employers should carefully consider whether they would be better off using a non-contractual handbook or non-contractual policies, which should be far easier to amend without an employee’s agreement.