Contract Clauses: Incorporation of workplace policies

An employer may include or exclude workplace policies, manuals, codes, rules, or handbooks from the contract of employment. Where a policy, for example, is expressly included as part of a contract of employment both the employee and employer may be bound by that policy.

Whether an employer can vary a contract of employment by varying an expressly included policy will depend on the operation of the variation and is often unclear. In seeking to rely on a variation, an employer should not act capriciously or unfairly.

Where an incorporation of workplace policies clause is missing

Where an incorporation clause is not found within a contract of employment, it may be implied by a court in certain circumstances. Consequently, it is preferable for employers to either expressly include or exclude workplace policies.

Where a policy is expressly incorporated into a contract, its provisions will not necessarily operate as terms of the contract. Policies may include a range of material including guidelines, statements of purpose, and administrative processes. Provisions within policies may be contractual in nature where they are of a kind normally found in a contract of employment, where clauses are promissory in nature, or where obligations are expressed in terms of a duty. Also relevant may be an employees action in signing off as having read and understood a particular policy.

Provisions within policies that are intended to be informative or educational are unlikely to be found to be terms of a contract of employment.

Drafting considerations

Employers should first carefully consider if they wish to include policies into their employment contracts. As noted above, an express inclusion may operate to enliven additional contractual obligations of on the employer as found within policies.

Employers should ensure that their employment contracts either expressly include or exclude workplace policies and do so in a clear and unambiguous manner.

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Connor James

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