The legalities of policy manuals
Many organizations have policy manuals setting out how certain issues are to be handled within the organization.
A policy manual might contain provisions relating to a wide variety of issues. Examples include vacation, job protected leaves such as maternity or parental leave, dress codes, hours of work, harassment, discrimination, confidentiality, privacy, payroll, conflicts of interest and more.
Some policies may be very brief and straightforward. Others may be lengthy and complex. It is not unusual for an alcohol and drug policy to be longer than 20 pages. Occupational health and safety policies may be measured in volumes rather than pages.
Policy manuals do not simply facilitate communications with your staff.
They must also be written with legal considerations in mind.
There are several cases in which the courts have declined to enforce such policies.
One example is a policy that attempts to reduce the notice required to be given when dismissing employees.
In addition to complying with a variety of legislative requirements, there are also contractual factors to consider.
As was stated in a leading B.C. court decision decades ago, “if the terms of the policy manual are to be binding, it must be concluded that they have contractual force. The usual elements of a contract must be established: a concluded agreement, consideration, and contractual intention.”
“Inward” intention is not enough. There must be an outward manifestation of assent by each party. Both offer and acceptance must be communicated by one party to the other.
When considering whether an employer’s policy handbook or manual is enforceable, B.C. courts have considered factors such as:
Whether the manual existed and was referred to when the employment contract was formed;
Whether the employer made an offer to the employee to incorporate the policy as a term of the employee’s contract;
Whether the employee accepted the handbook as part of her employment contract;
Whether the provisions in the policy manual were followed;
Whether the handbook indicated that it was not intended to have contractual force, including language suggesting that it was intended to be merely informational;
Whether the employer reserved the right to unilaterally modify the manual at any time; and
Whether the policy manual provided any certain new consideration that the employee was not already entitled to.
If factors such as the above are present, the conclusion may well be that a policy attempting to restrict employees’ reasonable notice upon dismissal, and other policies, are not part of an employee’s employment contract and will not be enforced by the courts.