And why failing to keep them updated could become a liability rather than an asset
Running a modern, people-led business means managing the risks that arise from employing people. One of the most effective ways to do this is by having an employee handbook that is tailored, clear and kept up to date.
An organisation’s people are both its greatest asset and its biggest risk. The banking crisis, for example, is widely believed to have resulted from poor behaviour by individuals working within the financial sector. In response, regulation increased significantly in an attempt to reduce human risk and prevent similar events from happening again.
The same principle applies across all sectors.
Why Employee Handbooks Matter
It is vital that employers clearly define the standards and behaviours expected of employees. One important way of doing this is by setting out, in writing, what behaviour is acceptable and what is not.
These guidelines are rarely included in employment contracts. Contracts are difficult to change, and employers generally want to avoid exposing themselves to contractual claims based on detailed rules.
This is where an employee handbook plays a crucial role.
A handbook allows employers to:
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Set clear rules and expectations
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Shape behaviour and workplace culture
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Improve standards of conduct
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Manage risk without altering contracts
Employee handbooks are designed to guide how staff should operate and behave at work.
Supporting Fair and Consistent Decisions
A well-written staff handbook can also demonstrate that an employer’s practices are consistent with employment legislation. This can be particularly important when dealing with grievances or disciplinary matters.
Handbooks can:
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Support disciplinary decisions
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Help justify actions taken against misconduct
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Back up employers when policies are challenged
Without a handbook in place, employers may struggle to deal effectively with inappropriate behaviour.
There have been cases where organisations were forced to make large financial settlements to remove employees who had clearly acted inappropriately. This often happened because the employer could not demonstrate that clear policies existed to prevent or address the behaviour.
What Should an Employee Handbook Include?
A basic employee handbook should cover a number of standard policies, including:
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Grievance procedures
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Disciplinary procedures
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Anti-harassment and bullying policies
Depending on the sector, additional policies may be required. For example, some organisations include a relationship policy requiring employees to disclose romantic relationships at work. This can be particularly important in regulated environments, such as financial services, where conflicts of interest may arise.
Keeping Handbooks Up to Date
Employee handbooks must be kept up to date to remain effective and legally compliant. Employment legislation, official guidance and case law change regularly.
For example:
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The Acas Code of Practice on discipline and grievance was updated recently
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Acas also published new guidance on disability discrimination in the workplace
Case law can also drive changes. In Barbulescu v Romania, the European Court of Human Rights ruled that an employer had not breached privacy rights by monitoring an employee’s messaging account. A key factor was the existence of a clear policy restricting private use of company systems.
Decisions like this often prompt organisations to review and update their policies.
When Handbooks Become a Liability
An out-of-date employee handbook can become a liability rather than an asset. In legal proceedings, it may be used as evidence that an employer’s practices are outdated or unlawful.
In Stimpson v Citigroup, a trader was dismissed for allegedly sharing confidential client information. Despite policies appearing to prohibit his actions, the employment tribunal ruled the dismissal was unfair.
This highlights an important point.
Policies Alone Are Not Enough
Having policies in place is not the end of the story. Employment tribunals do not automatically accept that breaching a written policy justifies disciplinary action or dismissal.
Employers must ensure that:
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Policies are current and lawful
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Employees are aware of them
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Policies are communicated clearly and consistently
An employee handbook is only effective if it is understood and applied correctly.
Need Help Creating or Updating an Employee Handbook?
If you’d like guidance on creating or reviewing an employee handbook, we’re here to help.
📞 01903 688789
📧 makeithappen@mbsmih.com