What is the difference between a staff handbook and a contract of employment?

Most employers understand the importance of having a comprehensive and legally sound employment contract with all of their employees. Staff handbooks can often be forgotten about, but they can be just as important in a workplace as they help to create the culture of a company. What is most important is understanding and being aware of the distinct differences between the two.

What is an employment contract?

An employment contract is the document that binds employer and employee. It helps to govern the relationship between employers and their employees and includes details around the main terms of someone’s job role like the hours of work and payment agreement.

What is a staff handbook?

A staff handbook contains the policies of the company. A policy can cover a variety of different topics but generally they lay out the directions of working for the company to the employee.

What are the differences between the two?

The type of document

Due to the binding obligations of an employment contract, if a party breaches any of the terms included in the contract, the dispute can ultimately end up in court. Alternatively, an employer may choose to take internal disciplinary action if an employee breaches their contract and, in some cases, even dismiss that member of staff. 

On the other hand, a staff handbook being a collection of policies means that it is not something that can be enforced in court. In the case of an employee not following a company policy, disciplinary action such as an official warning or termination may be considered by the employer.

What the document covers

Employment contracts refer to the key terms of a person’s employment that tend to remain the same throughout their time with the company. 

A staff handbook contains core and operations policies including but not limited to:

• Disciplinary and grievance policies
• Anti-discrimination, bullying, and harassment policies
• IT policies

How the document can be amended

With an employment contract, both the employer and the employee have to agree to any changes to the terms included. This is then confirmed and made official through the signing of a letter of variation or by signing a new contract document. 

However, staff handbooks can be changed by the employer without having to have the approval of the employee. For example, an employer could amend the way that expenses are processed and document this change in a policy contains within the staff handbook.

If you need help or advice on your staff handbooks or employment contracts contact our team today.