It is not essential that you have an employee handbook, but it is good practice. You are legally required to provide certain policies to staff, and can use your handbook to set these out alongside your other operational policies and procedures. This guide provides an employee handbook template and guides you through what HR policies you should put in place before taking on staff and what those policies should say. It includes policies that you are legally required to provide and those that are recommended as good practice.
- What is an employee handbook?
- Do I need an employee handbook?
- What should be included in my employee handbook?
- Which of my staff should my employee handbook apply to?
- How often do I need to update my employee handbook?
- Do I need my staff’s consent to change a policy in my employee handbook?
- Is my employee handbook contractual?
- How can I avoid my employee handbook becoming contractual?
- Employee policies to put in a handbook
What is an employee handbook?
An employee handbook is a collection of policies and guidance for your staff. It can cover everything from essential, legally required policies like a grievance procedure, to optional policies that just make your workplace run more smoothly, such as a dress code. It might also be referred to as a staff handbook or an employee policy handbook.
Do I need an employee handbook?
It is not essential that you have an employee handbook. However, as there are certain policies that you must give your employees by law (eg disciplinary and grievance policies and health and safety policies), it is best practice to provide your staff with a handbook which covers them, together with any other operational policies and procedures that you want. For further information on the policies and rules that could benefit your business, see below and our handy employee handbook template which you can adapt and use. It is good practice to require a new staff member to sign a statement when they join to confirm that that they have read and agree to abide by the policies and procedures set out in the employee handbook.
What should be included in my employee handbook?
It is not a legal obligation to have an employee handbook and there are no hard and fast rules about what to put in it. Our template Staff handbook and policies gives you an example, which you can adapt to suit your needs.
Bear in mind the following:
- You must give your employees and workers at least the legal minimum allowances in relation to certain areas like sick pay, holiday leave and pay or maternity/paternity leave and pay. You may choose to offer staff more than the legal minimums, eg paying sick pay even if a staff member is only off for one or two days. You can use your employee handbook to make clear what these legal entitlements are and what procedure staff members must follow if they wish to exercise these rights. As well as this, you can use your handbook to set out any additional benefits that you may choose to offer your staff eg travel card loans for commuters.
- Providing staff with a handbook can also help set expectations for what behaviour is acceptable and desirable across your business. For example, you can include an anti-harassment or anti-bullying policy and clearly set out your company values.
- You can also use your handbook to ensure your staff are aware of both their and your legal obligations. For example, you can set out your obligations in relation to health and safety and data protection.
See below for information about specific policies to put in place.
Bear in mind that it will not be appropriate to apply some of your HR policies and procedures to staff other than employees (eg casual workers).
Which of my staff should my employee handbook apply to?
Your employee handbook should typically apply in full to your employees.
Some of the policies and procedures in your employee handbook should also apply to staff members other than employees (eg casual workers and agency workers), but it will usually not be appropriate for your entire handbook to apply to these staff.
This is because non-employees are not entitled to the same legal rights and protections as employees, and if you treat them in the same way, you run the risk that they will claim employee status and its associated rights. One of the ways to avoid this is to avoid using policies and procedures you use for employees – such as grievance and disciplinary procedures or discretionary leave policies – with your other staff members (see Casual workers (including zero hours workers) for more information).
You should therefore consider each policy carefully when you are putting together your handbook and make it explicitly clear which policies are only applicable to your employees.
Our employee handbook template is drafted on the basis that the following HR policies and procedures will apply to employees only:
- Disciplinary and capability policy and procedure;
- Grievance policy and procedure;
- Flexible working policy;
- Compassionate leave policy;
- Time off for jury service and public duties;
- Time off for dependants;
- Parental leave policy; and
- Maternity, paternity, adoption and shared parental leave policies.
How often do I need to update my employee handbook?
Whatever rules and policies you choose to include in your employee handbook, make sure that you schedule regular reviews to keep your handbook updated to reflect current law. You must also ensure that the issue date is clearly shown on the handbook. See our employee handbook template for an example of how to do this. This is in case there is ever a debate about which version of the employee handbook was valid on a certain date.
See below for more information about changing policies in your employee handbook.
Do I need my staff’s consent to change a policy in my employee handbook?
This depends upon whether or not the part of the employee handbook you want to amend forms part of your staff members’ employment contracts or not; see below for how to tell.
- Contractual policies
If the policy you want to change is part of the contract, you will usually need your employees’ consent to change that part of the handbook. Note that you may be able to make the change without consulting your employees if the handbook specifically says you can (this is known as a flexibility clause). However, you must exercise caution in using a flexibility clause. There are limits to the extent to which you can rely on these clauses and it is recommended that you obtain legal advice if you intend to use one to make significant changes. See Process for changing employee contracts for more information.
- Non-contractual policies
Provided that your employee handbook does not form part of your staff members’ employment contracts, you are free to amend it without obtaining their consent. If you do make a change, you should notify your staff and draw their attention to the changes (eg by circulating an updated copy).
Is my employee handbook contractual?
This depends on the wording in your employee handbook and employment contracts, and how you behave in practice.
Where your staff member’s employment contract refers to the employee handbook for more detail in relation to particular matters, what is said in the handbook on those matters may then become part of the contract. This is most likely to be the case with provisions which relate to employee rights and benefits (eg redundancy and annual leave ; if you have stated that you will apply a particular process or follow a particular formula when providing a benefit, this may well be contractual. A policy which is more general and perhaps provides a framework for managers, such as an equality policy, is less likely to be contractual.
Note that even if there is no specific reference to provisions of the employee handbook in your employment contracts, the handbook itself may create contractual obligations between you and your staff member. Again, this is most likely in the context of particular rights and benefits which are clearly specified within the handbook and which the employee is likely to rely on.
If the handbook forms part of the contract, you usually can’t change its terms without consulting your employees; see below for more information.
If the change you want to make to a policy is likely to have a significant impact on your staff, and you are unsure whether it’s contractual or not, you should consider taking legal advice. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.
How can I avoid my employee handbook becoming contractual?
If you do not want your handbook to become contractual, it is best practice to make it clear, in unambiguous terms, in the handbook itself that it does not form part of staff members’ contracts unless stated otherwise, and that you may need to amend the policies contained within it from time to time. Our employee handbook template contains wording to this effect.
In addition, you should be careful about incorporating references to the handbook within your staff members’ employment contracts; you should also make sure that you apply any discretionary non-contractual policies on a discretionary, and not a universal, basis.
Employee policies to put in a handbook
What HR policies should I include in my employee handbook?
The following are policies which are either legally required or strongly recommended for the smooth running of your business . These policies should be applicable to all staff members aside from self-employed freelancers:
- Data protection policy and staff privacy notice (see Data protection obligations);
- Health and safety policy (see Health and safety policy);
- Sickness absence policy;
- Annual leave policy;
- Equal opportunities policy;
- Anti-bribery and corruption policy;
- Whistleblowing policy;
- Bullying and harassment policy; and
- Dress code.
The following policies are either legally required or strongly recommended if you have staff members who are employees:
- Grievance procedures (including separate bullying and harassment and whistleblowing policies);
- Disciplinary policy;
- Family related leave and flexible working policies; and
- Jury service and other public duties policies.
There are other HR policies that may be relevant to your business’s activities, for example an IT and communications policy if your staff members use your business’s IT and/or communications systems or a working from home policy if any of your staff work remotely. Further guidance about relevant policies and templates you can use are provided throughout our content or you can choose to include them in your bespoke employee handbook by using our template.
It is best practice to set out all your HR policies and procedures in your employee handbook. Our employee handbook template includes all of the information and temple employee policies that you may wish to include (with an option to include all or only some of them).
What HR policies am I legally required to have in place?
Whenever you take on any new staff members (aside from self-employed freelancers), you must ensure that you comply with legal data protection obligations. To comply, you should put in place a staff data protection policy and provide certain privacy information to your staff, which is typically done via a staff privacy notice; see Records and staff data for more information about how and when you can use personal data about your staff.
If you take on any new staff members who are employees, you are also legally required to put the following policies and procedures in place and give details to your staff:
- A written statement of your general health and safety policy, if you have five or more employees; see our guidance on writing a health and safety policy for more information.
- Grievance and disciplinary procedures.
You are legally required to provide employees and casual workers with details about sick pay and leave and annual pay and leave in their contracts, and many employers will supplement this information with policies on these matters set out in their employee handbooks (see above).
Our template employee handbook includes example policies to deal with all of the above.
Additional policies are optional but, in many cases, recommended for the smooth running of your business. See above for further details.
Helen Turnbull is Head of Strategic Development for the Marketplace at FromCounsel, the specialist corporate legal resource trusted by top global law firms and FTSE 100 companies. Before joining FromCounsel in 2021, Helen was Head of Content at Sparqa Legal. Having previously spent 12 years practising as a commercial and property law barrister, Helen regularly contributes her expertise to Sparqa’s blog.