The employment contract sets out an employee’s rights, responsibilities and duties within the employment relationship. However, as an employer, you also need a set of policies complying with the ACAS code on grievance and disciplinary procedures, paid holiday and maternity and paternity leave. The general position and assumption of most employers are that policies are non contractual and therefore an employee will be prohibited from bringing a breach of contract claim in the event that their employers fail to adhere to any of their policies.
However, the above is not conclusive and the Court will often consider a number of factors in considering whether policies contained in company handbooks will be viewed as contractual. Policies that infer statutory rights such as sickness and holiday rights will be deemed contractual on the basis that the employer is obliged to provide full particulars of their employment under the Employment Rights Act 1996. However with non-statutory rights the Court will try to ascertain what the intentions of the parties were when entering into the agreement
Whether a policy is contractual became a point of contention in Sparks v Departments for Transport  EWHC 181 (QB) which concerned the contractual validity of a decision by several government agencies to tighten up their sickness absence rules by reducing the amount of time before sickness procedures were triggered.
The tribunal decided that the sickness rules were incorporated into individual’s contracts and the substantive point in this case was whether employers had the right to make a unilateral change without the agreement of the employees. The court held that they did not, specifically because there was a clause within the policy that required the agreement of the employees before making any changes, should the changes be to the detriment of the employees. The employers argued that a change to the sickness policy did not constitute a detriment although Mr Justice Globe held to the contrary and did not permit the changes.
The Respondent appealed and in deciding this matter the Court of Appeal paid particular attention to the employment law documentation as a whole. The Court of Appeal was satisfied that the relevant wording of the handbook displayed a flavour of contractual incorporation and therefore dismissed the appeal. The fact that it might generally be a desirable feature of industrial management to handle such matters as non contractual did not prevent a provision from being apt for incorporation.