Employment Policies – (Not) Worth Their Weight In Gold?

You must be a pirate for the pirates’ code to apply… and the ‘code’ is more of what you’d

call ‘guidelines’ than actual rules.    Captain Hector Barbossa, Pirates of the Caribbean

If you’re an employment professional, you’re likely quite familiar with the scenario of employers attempting to rely on employment policies as contractually-binding rules. You’re likely also quite familiar with the fact that policies can be worth little at the moment when they are most needed.

General Guidelines

The development of an employee manual should be undertaken with expertise and thought. Avoiding generic policies available on the internet (and through a number of other sources) is the first rule every employer should embrace. Many such items are designed for American workplaces. Most will not be suitable for your workplace.

In general, I suggest a “less is more” approach to determining what should go into the employee manual. Employers often make the mistake of stuffing the employee manual with content when a slimmer version would suffice.

The manual should, however, contain certain basic policies. At the very least, it should have policies addressing harassment, protection of personal information, use of workplace technology and equipment, discipline, absenteeism, overtime pay, impairment, conflicts of interest, and health and safety. These are, of course, just the tip of the iceberg.

Legislative Content

My advice to employers is to avoid duplicating employment legislation in the manual. A lengthy manual created in an attempt to mimic the local employment standards rules is bound to be a disaster. These attempts routinely misstate the legislation, resulting in confusion and possible statutory liability.

Duplicating legislative content also creates more work for human resources staff as they must constantly update the manual to keep up with legislative changes.

Details – Creation/Revision Dates

I suggest that each policy contained in the employee manual display creation and revision dates. This helps in the inevitable process of figuring out when a policy was implemented and revised. Employers are often required, in court and administrative hearings, to demonstrate when a policy came into effect and how it has changed over the years, so this can be a huge time saver.

Stay Out Of Your Employees’ Bedrooms!

Employers should definitely resist the temptation to impose policies governing the non-work life and habits of employees (assuming those habits don’t impact on the employer’s business). Policies imposing, for instance, a code of conduct on an employee’s personal life (personal habits, religious affiliation, sexual orientation, etc.) are to be strictly avoided.

Imposing Policies

The best way to make the contents of an employee manual binding is to expressly incorporate it, as it may be amended from time to time, into the written contract of employment. A copy of the policy manual must be provided along with the contract at the time the contract is to be signed by the employee (prior to the commencement of the employment).

Employers should beware, however, of the imposition of new policies significantly changing the terms and conditions of employment of existing staff. This should be done only with the prior advice of an employment expert.

A Recent Example of a Handbook Gone Wrong

The B.C. Supreme Court recently decided a wrongful dismissal claim by a Mr. Fernandez against the University of British Columbia. Upon hiring, Mr. Fernandez was provided with a hiring letter which referred to an employee handbook (it was not clear if he received the actual handbook at that time, but he didn’t recall seeing it until after commencing his employment).

About 8 years later, UBC relied on a severance provision contained in the employee handbook when terminating Mr. German’s employment. Mr. German sued for wrongful dismissal, asserting that he was not bound by the handbook severance provision.

The Court determined that UBC could not rely on the handbook as part of Mr. Fernandez’s terms of employment, and hence the severance provision was unenforceable. The Court referred to the prevailing judicial statement on this topic, Rahemtulla v. Vanfed Credit Union, for the following principles.

• The parties must express a common intention to be contractually bound by the policy manual. This can be achieved by signature or by other conduct.
• The employee’s assent cannot be inferred simply from the fact that he/she continues to work for the employer.
• There must be valid consideration provided to the employee in exchange for agreeing to be bound by the policies.

Ultimately, the Court determined that UBC had not effectively made the employee handbook part of Mr. German’s employment contract.

Some lessons emerge from the German v. UBC decision, such as…

• Don’t put severance provisions in your employee handbook, put them right in the body of the written employment contract.
• Learn, from an employment expert, how to properly implement employment agreements and policy manuals.
• Document the formation of the relationship so that it is clear when the various steps were taken.

If you don’t take these steps, you can expect a Court will adopt the view of Captain Barbossa, and treat your policies as “more of what you’d call ‘guidelines’ than actual rules”.

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This item is provided for general information purposes only and is not intended to be relied upon as legal advice. Informed legal advice should always be obtained about your specific circumstances.