Employee Handbook vs. Employment Contract: Key Differences and Overlaps

Introduction 

In the realm of employment law in the UK, two essential documents govern the employment relationship: the employee handbook and the employment contract. While they both play critical roles in defining the terms and conditions of employment, they serve distinct purposes and have unique legal implications. In this article, we'll explore the key differences and overlaps between employee handbooks and employment contracts to help both employers and employees better understand their rights and obligations. 

Employee Handbook: A Comprehensive Guide 

An employee handbook, often referred to as a staff handbook, is a comprehensive document created by the employer. Its primary purpose is to communicate company policies, procedures, and expectations to employees. Here are the key characteristics of an employee handbook: 

1. General Information: Employee handbooks typically contain general information about the company, its culture, mission, and values. It may also include an introduction to company policies and procedures. 

2. Non-Contractual: Employee handbooks are generally non-contractual documents. They do not create legally binding obligations between the employer and the employee. Instead, they serve as guides for employees to understand how the company operates. 

 3. Policies and Procedures: Employee handbooks cover a wide range of policies and procedures, such as equal opportunities, health and safety, disciplinary procedures, grievance procedures, leave policies, and data protection. These policies are subject to change by the employer. 

4. Flexibility: Employers have flexibility in updating and amending policies in the employee handbook to adapt to changing circumstances or legal requirements. 

5. Reference Material: The handbook serves as a reference document that employees can consult to better understand company policies and their rights and responsibilities. It is a valuable resource for both new and existing employees. 

Employment Contract: A Legally Binding Agreement  

An employment contract, on the other hand, is a legally binding agreement between the employer and the employee. It outlines the specific terms and conditions of employment, including: 

1. Job Role: The employment contract specifies the employee's job title, responsibilities, and duties. 

2. Salary and Benefits: Details about compensation, benefits, bonuses, and any other financial arrangements are outlined in the contract. 

 3. Working Hours: The contract specifies the employee's working hours, including any overtime or on-call requirements. 

4. Termination Provisions: Employment contracts often include clauses outlining the conditions under which employment can be terminated, notice periods, and grounds for dismissal. 

5. Confidentiality and Non-Compete:

Contracts may contain confidentiality agreements and non-compete clauses to protect the employer's interests. 

Key Differences and Overlaps  

While the employee handbook and employment contract serve distinct purposes, there are areas where they may overlap: 

1. Incorporation by Reference:

Some employment contracts may refer to the employee handbook, stating that certain policies and procedures mentioned in the contract are governed by the handbook. 

 2. Contractual Policies:

If specific policies in the employee handbook are stated in the employment contract as contractual terms, they become legally binding obligations. 

3. Variation Clauses:

Employment contracts may include variation clauses that allow the employer to make changes to certain terms and conditions, such as salary or benefits, with proper notice. However, these changes should not breach statutory employment rights and the employer should be careful not act in a way that is discriminatory or that could destroy mutual trust and confidence with the employee. 

Conclusion 

In summary, employee handbooks and employment contracts are distinct documents with different purposes and legal implications. An employee handbook serves as a guide to company policies and procedures, while an employment contract is a legally binding agreement that outlines specific terms and conditions of employment. Employers should ensure that these documents are clear, consistent, and compliant with UK employment law to avoid disputes and legal complications. Employees, on the other hand, should carefully review both documents to understand their rights and responsibilities in the workplace. When in doubt, seeking legal advice can help clarify any ambiguities or concerns regarding the contents of these documents. 

Article by

Marianne Wright

mw@kilgannonlaw.co.uk

Our expert employment law solicitors all have many years’ experience advising individuals who are in your position. We will be able to guide you through the process and to help you secure the best possible outcome.

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This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice 22.06.2024