Case Update: Contractual terms included in the Staff Handbook

Department for Transport v Sparks & Ors

In this case, the Court of Appeal (CA) was required to determine whether an absence management policy in a staff handbook was a contractual term between the employer (the Department for Transport), and the employees.

The facts

In this case, seven claimants were employed by different agencies of the Department of Transport.  Each agency had different, but not materially different, provisions in relation to the terms regarding attendance management.

The contract of employment stated that the terms and conditions of employment were set out in various documents including the staff handbook.  In reference to the staff handbook, the contract stated that it ‘sets out many of your terms and conditions. It is the intention…that all of the provisions of the Departmental Staff Handbook which apply to you are apt for incorporation should be incorporated into your contract of employment.’

The term in question concerned a short-term absence management policy, which if it was contractual, would restrict disciplinary action being taken until the relevant triggering points (as set out in the policy), had been satisfied.

The Court of Appeal Decision

In reaching its decision, the court considered previous judgments in this area before deciding whether the terms being questioned in this case were contractual:

  • The contractual intention of the parties would need to be ascertained; where the intention is set out in a written document, that document must be constructed on ordinary contractual principles. Where a document is expressly incorporated by general words, it would need to be considered whether any particular part of that document is apt to be a term of the contract.
  • As a matter of good practice, ill health absence should be treated with much more flexibility and compassion and should not be viewed in the same manner as misconduct disciplinary procedures and thus would not be regarded as being part of contractually binding obligations of the employer and the employee.
  • The fact that a staff handbook is presented as a collection of ‘policies’ does not preclude it having contractual effect if by their nature and language they are apt to be contractual terms.
  • The more important the provision to the structure of the procedure, the more likely it is that the parties intended it to be contractual. If a provision is vague or discursive, it is less apt to have contractual status.

Taking the above into account, the court determined that the question to be asked is whether the provision ‘is apt for incorporation into the contract between employer and employee.’ The starting point for determining this and for determining the contractual intention of the parties, is the language of the employment document as a whole.

Based on the employment documentation presented to the court in this case, the court dismissed the appeal and held the short-term absence management policy was of a contractual nature.


Whilst this case concluded the absence management policy was contractual in this case, the court has expressly stated that each set of employment documentation will differ and will need to be analysed in accordance with its own terms. The court highlighted that this should not be over-rigidly controlled by what another court may have thought on a different set of documents and therefore this assessment needs to be made on a case by case basis.

This case is useful in setting out the considerations which the courts will take into account when determining whether a set of employment documentation holds contractual status. However, crucially the decision will be made on the actual documentation. It is therefore important for the contractual intentions of the parties to be accurately reflected in any employment documentation.  Where other documents are concerned, such as employee handbooks or policies, attention must be given to the areas of the handbook, policy, etc. to ensure only terms that the parties wish to make contractual are identified as such.  This should help to avoid situations as described in the case above where non-contractual elements of a policy are inadvertently made contractual.

Published: 07.11.16 - Posted In: Case Studies