How To Use Employee Handbooks To Minimise Workplace Risk

 – And why failing to keep them updated could become a liability rather than an asset


Running a modern people-led business requires the management of risks arising from employees. Having a handbook in place, which is tailored and up-to-date, is one way of helping to manage those risks.

An organisation’s people are its biggest risk and its greatest asset. The banking crisis, for example, is widely accepted to have come about as the result of bad behaviour on the part of City workers. The legal framework for the financial markets has become increasingly onerous as a result, as regulators have tried to put in place a structure to reduce human risk and prevent another financial catastrophe.

It is just as vital in other sectors that employers make clear the parameters within which employees should work, and one important part of this involves putting down in writing what behaviour is and is not acceptable.

Such guidelines are not usually included in employment contracts. This is because it is generally difficult to change and update the terms of a contract, and an employer would not generally want to leave itself open to contractual claims on the basis of detailed guidelines. A staff handbook can play an important role here, as one of its main functions is to set down rules within which staff should operate. Handbooks are intended to shape employees’ behaviour to help improve conduct in the workplace.

A handbook can also help show an employer’s practices are consistent with employment legislation and can be used to help justify disciplinary decisions. They can also be important for backing up employers wishing to take action against recalcitrant employees.

Employers may find it difficult to deal effectively with misconduct where there is no handbook in place. For instance, there have been examples of employers having to make large cash settlements to get rid of employees who have clearly acted inappropriately at work (e.g. by taking unauthorised absences, or by drinking or taking drugs) because the organisation was not able to demonstrate it had appropriate policies in place to stop such behaviour.

So, what should a basic staff handbook contain? It needs to cover a number of standard topics including grievance and disciplinary procedures and, for example, contain an anti-harassment and bullying policy. Depending on the sector, an employer may wish to include other policies. Some organisations, may choose to have a ‘relationship policy’ requiring employees who become romantically involved to disclose this to an HR manager or superior. This can be particularly important in financial institutions where the unchecked flow of information between staff could lead to conflicts of interest.

Handbooks must be kept up-to-date both to remain practically useful and to avoid becoming inconsistent with official guidance, legislation and case law. The Acas code of practice on discipline and grievance, for example, was updated early last year and in January it published a new guide, Disability discrimination: key points for the workplace

In a recent European Court of Human Rights case, Barbulescu v Romania, a company was found not to have breached the privacy rights of an employee by monitoring his Yahoo Messenger account when it suspected him of using the account for private purposes. It appears to have been significant that the employer had a clear policy against private use of the company’s resources. The decision may well lead to other organisations updating their policies and handbooks.

An out-of-date handbook is a liability rather than an asset, not least because it may be used in legal proceedings as evidence that the employer’s practices are outmoded or unlawful. In a recent employment tribunal case, Stimpson v Citigroup, a City trader was sacked after having been accused of sharing confidential client information. The employment tribunal accepted his dismissal was unfair, even though the bank had policies which appeared to outlaw what he had done.

The case demonstrates that handbooks and policies are not the end of the story. Employment tribunals have been reluctant to accept, on face value, that breaches of written policies automatically provide sufficient justification for disciplinary action or dismissal. Employers need to ensure their contents are communicated to employees effectively.

For more information and guidance on how to create a handbook, please contact us on 01903 688789 or email us via

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