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A small business guide to employee handbooks

December 15, 2016

Nearly all employers are aware of the legal requirement to give new employees a statement of their main terms once they start working for you.

For some small businesses this may be the only documentation they give staff, after all this meets their legal requirements. However, many employers can find that well-drafted and implemented employee handbooks are essential to safeguard their business.

To help you understand how an employee handbook can help both employers and employees, here’s what every small business owners needs to know about them;

What’s included in a handbook?

Employee handbooks generally contain any other information, not included in the contract of employment or statement of main terms that controls the individual’s employment. It sets out the practices and procedures which the business follows.

The content of an employee handbook will differ from business to business, but general policies include;

Whilst the traditional employment policies are essential, other policies have become more important due to technological, cultural and environmental changes. This includes having an email, social media and internet usage policy which reiterate how works equipment should be used, how and when this is monitored and the consequences for breaching the policy.

More employers are also introducing alcohol and drugs policies to ensure they have the right to carry out tests, either regularly or on a random basis, and it is essential this policy outlines the requirements for testing, how and when testing will be carried out and the consequences of failing a test. The need for additional policies will depend on the nature of the business.

Some policies and procedures will state that they form part of the contract of employment. Essentially, this means that employees who breach these clauses can potentially be disciplined for this. This will depend on the nature and seriousness of the breach. However, what this does mean is that employers cannot change the contractual terms without the approval of the affected employees.

This will be an easy hurdle to overcome where the change benefits staff, for example, an increase in the number of holidays given through the company holiday policy, but employers may have to consult to reach agreement if the change negatively affects employees.

RELATED: Becoming an employer – Your responsibilities when you hire staff

Why are employee handbooks beneficial?

Employee handbooks are necessary because they allow employees to know the rules they work under and what is required of them in the workplace.

The handbook also ensures staff know the consequences of their action before any incidents take place; they can no longer claim they didn’t know an act was a disciplinary offence so any sanctions are likely to be fair.

Similarly, they are vital for employers and managers as they set out the procedure to be taken in different circumstances and the sanction they can apply.

Following a fair, reasonable and transparent procedure is crucial in situations where employees are likely to make a tribunal claim because the tribunal can assess the procedure the employer followed.

How to introduce an employee handbook to your business

Employers who wish to introduce a new handbook may be tempted to download sample employee handbooks from the internet or other sources, however, you should be wary about using templates.

It is crucial that employers are tailoring handbooks to ensure they can rely on them. For example, most disciplinary procedures will contain a list of acts classed as misconduct, serious misconduct and gross misconduct. These will differ depending on the particular business or industry so employers need to ensure the acts they class as misconduct are included in the handbook.

Giving new starters an employee handbook is straightforward; they should be given one as soon as possible after they have started employment so they understand their rights and rules immediately.

Employers should require a signed and dated copy to be handed back by staff, or a signed form saying they have received the handbook. This should be stored in the employee’s file as evidence they have received, read and understood the handbook and can be used at a later date when disciplining the employee under the handbook.

Introducing an employee handbook to existing staff may be trickier. So long as the handbooks are not changing any of the rules, and are simply documenting what already takes place, employers will have to communicate with staff to introduce it, explaining the need for the handbook, what it covers, and the fact there are no changes.

There may be some hostility towards the introduction but this is likely to be because the staff don’t understand what or why it’s needed and can be solved with open communication.

Where the handbook is changing some of the rules, for example changing the procedure that will be followed on disciplinary action, employers will have to follow a consultation process depending on the number of staff affected.

RELATED: A small business guide to carrying out effective staff appraisals

How often should employee handbooks be updated?

Handbooks need to be kept up to date so employers can confidently rely on them when needed. Employment matters are ever changing so certain clauses, policies or procedures may become irrelevant or outdated.

Alongside this, changes in technology or internal procedures or the introduction of new laws may mean that additional policies are necessary or current ones need to be amended.

Handbooks which include an overall clause reserving the right to amend, or including a similar clause in each individual procedure or policy, will give employers the power to update the clauses when needed.

Any time the employee handbook is updated or amended, it should be reissued to staff with an additional signed and dated receipt being kept.

About the author

This guide has been written exclusively for ByteStart by Peter Done, Managing Director of Peninsula Business Services – the UK’s leading specialist Employment Law, HR and Health & Safety service. Other employment guides Peter has written for ByteStart include;

More help from ByteStart

ByteStart is packed with help on all aspects of starting and running your own successful business, just some of our other guides include;

Employing staff

Motivating your team

Leading a business

Going for growth

Funding your business