Staff Handbook Basics

While a staff handbook is not a legal requirement in itself, many of its component policies address legal obligations. In Employment Tribunal proceedings, having clear written policies that were communicated to employees can be decisive in demonstrating a fair and consistent approach. Employers who have no policies, or who have policies but do not follow them, are at a significant disadvantage.

From a practical perspective, a handbook:

• Reduces time spent answering routine employee questions about holiday, sickness, expenses, and dress code
• Sets clear standards of behaviour and performance expectations
• Provides a framework for managing conduct and performance consistently
• Demonstrates compliance with legal obligations (data protection, health and safety, equality)
• Reduces the risk of inadvertent discrimination through inconsistent application of policies

For small businesses, a handbook need not be lengthy — a concise, clear document covering the key policies is far preferable to a lengthy document that no one reads.

While every business is different, most staff handbooks should address the following areas:

• Introduction: Welcome statement, company values and culture
• Employment basics: Hours of work, place of work, probationary period, pay arrangements, holiday and bank holidays
• Absence management: Reporting procedures, SSP, long-term sickness, fit notes
• Disciplinary policy: Mirroring the Acas Code — investigation, hearing, right to be accompanied, possible sanctions, appeal
• Grievance policy: How to raise concerns, steps of the formal process, appeal
• Equal opportunities and anti-discrimination: Commitment to equality, protected characteristics, reporting mechanisms
• Anti-harassment and bullying policy
• Health and safety policy: Responsibilities, first aid arrangements, accident reporting
• Data protection and confidentiality: How employee and customer data is handled, GDPR obligations
• IT and social media policy: Acceptable use of company IT systems, social media expectations
• Expenses and benefits policy
• Whistleblowing policy

One of the most important decisions when drafting a handbook is distinguishing between contractual terms and non-contractual policies.

Contractual terms form part of the employment contract. They cannot be changed unilaterally by the employer without the employee's agreement. Examples include pay, holiday entitlement, hours of work, and notice periods. These should generally be in the employment contract itself rather than the handbook.

Non-contractual policies are guidance documents that the employer can update at any time without needing consent from employees. Most operational policies — such as the expenses policy, dress code, social media policy, and disciplinary procedure — should be non-contractual, allowing you to update them as circumstances change.

Your handbook should include a clear statement at the start, such as: "This handbook contains both contractual terms (marked as such) and non-contractual policies and guidelines. Non-contractual policies may be updated from time to time — the most current version is always available from HR."

The disciplinary and grievance procedure is typically non-contractual (the employer should be able to adapt it) but must be followed consistently.

Employment law changes frequently and your handbook must keep pace. Policies that were current three years ago may no longer comply with the law today — for example, flexible working rules changed significantly in April 2024, and the Employment (Allocation of Tips) Act 2023 introduced new requirements for tipping policies.

Best practice is to review the entire handbook annually, as well as reviewing specific policies whenever:

• Employment legislation changes
• A significant tribunal or court decision is published that affects common policies
• The business's own structure, working practices, or culture changes significantly
• An issue arises in the business that your current policies do not adequately address

When you update the handbook, communicate the changes to all employees (not just new starters) and ask them to acknowledge the updated version. Keep records of acknowledgements. For significant changes to non-contractual policies, giving reasonable notice before they take effect is good practice.