Why Every Business Needs an Employee Handbook

The employee handbook, sometimes called a ‘staff handbook’ or an ‘employee manual’, is a crucial resource for employees and employers alike. However, many businesses do not realise the potential benefits of having one from an early stage, until something goes wrong with an employee.

Whilst it would be wholly unreasonable to assume that employment tribunals would be a thing of the past if every business had an employee handbook, a sizeable proportion of employers may have fared better with an accurate and up to date handbook to rely on.

So, what is an employee handbook and why are they so important? Below, we explain the basics and highlight why every business should have one.

What is an employee handbook?

The employee handbook acts as a central reference point for the business and its staff. It is usually non-contractual but ensures that employees are aware of both their terms and conditions of employment and all company policies. It will often contain at least 20 policies governing different aspects of workplace life and management.

Although employee handbooks are not a legal requirement, unlike a statement of particulars, they can save a lot of misunderstanding further down the line. Even today, people are a business’s greatest asset. However, they can also be its greatest risk. By having an employee handbook in place, businesses can help to manage this risk and create a safe and productive working environment.

What should employee handbooks contain?

Businesses generally use employee handbooks to specify the following:

• Holiday entitlements
• Sickness or injury payment conditions
• Disciplinary procedures
• Capability procedures
• Grievance procedures
• Harassment policies
• General information about the company
• Whistleblowing procedures

Why is an employee handbook important?

1. Welcoming new employees to your organisation

Businesses often choose to provide new employees with their employee handbook during their induction. Each business has its own idiosyncrasies and company culture; by laying out information about the practices and ethos of your workplace, it can help new employees to understand their role within your organisation. Having everyone singing from the same hymn sheet is an active way to encourage cohesion between existing employees and new starters at an early stage.

2. Setting out company policies

Carrying on the theme of singing from the same hymn sheet, the employee handbook should be used to communicate the organisation’s policies. From grievance and disciplinary procedures to holiday pay, detailing company policies in the employee handbook is a great way to ensure they are adhered to consistently. It also allows managers and other senior members of staff to have a point of reference when answering questions or making decisions.

3. Minimising risk

By having an up-to-date employee handbook in place, employers can clearly define the parameters in which they expect their employees to work and behave. In certain circumstances, dismissals made because of an employee’s inappropriate behaviour have led to employers losing at an employment tribunal because they were unable to demonstrate that they had a policy against it and/or followed that policy correctly. You can read more in our guide to dismissing an employee fairly.

As well as reducing the risk of costly employment tribunals, laying out clear policies in the employee handbook shows consistency with current legislation.

Frequently Asked Questions