Department for Transport v Sparks & Ors

Whether a staff handbook provision forms part of an employment contract depends on the employment documents construed as a whole and on whether the particular provision is apt for incorporation. A handbook may contain both contractual terms and non-contractual guidance. A clear provision conferring a defined employee right may retain contractual effect even when surrounded by guidance, provided it is consistent with the other contractual documents. The court should consider the wording, structure and context of the documents, including the language introducing the handbook. A contractual sickness-absence threshold need not make every related policy contractual or require disciplinary action automatically. A clause preventing formal attendance procedures being invoked until cumulative short-term absence exceeded 21 working days in a 12-month period was contractual.

The Department appealed against declarations made by Globe J on 3 February 2015 that provisions of its Staff Handbook formed terms of the employment contracts of seven employees working in different Department for Transport agencies. The dispute concerned whether a clause governing cumulative short-term sickness absence, linked to attendance procedures in Annex A, was contractual or merely guidance. The High Court held that the clause was apt for incorporation and that a later attendance-management policy could not unilaterally vary the contractual terms. The Court of Appeal considered the clause’s wording and context, its relationship with other sickness-management provisions, and whether it had independent contractual effect.

The appeal was dismissed unanimously. McCombe LJ gave the judgment, with whom David Richards LJ and Dyson MR agreed.

1. The question whether a handbook provision is incorporated depends on the particular employment documents construed as a whole. Ordinary contractual principles apply. Where a document is incorporated by general words, the court must still ask whether the particular provision is apt to be a contractual term. The inquiry is document-specific, as explained in Alexander v Standard Telephones & Cables Ltd [1991] IRLR 286.
2. Employment documents may contain both contractual terms and non-contractual guidance. The general desirability of handling sickness absence through flexible policy, recognised in Wandsworth LBC v D’Silva [1988] IRLR 193, does not prevent a specific provision from having contractual force.
3. The wording and structure of the Handbook indicated a contractual incorporation of Part A provisions. Clause 10.1.18 was placed among provisions described as terms and conditions of employment, whereas section 10.3 was described as policy, guidance and procedures. The clause was clear and was apt for separate contractual effect. The approach in Keeley v Fosroc International Ltd [2006] EWCA Civ 1277 supported treating clear contractual wording as capable of having independent effect.
4. Clause 10.1.18 conferred a contractual right not to have the Annex A procedures taken forward for cumulative short-term sickness absence until the employee had exceeded 21 working days’ absence in a 12-month period and the manager perceived a problem with attendance. It did not require disciplinary procedures to be invoked automatically.
5. The contractual clause could operate in parallel with the policy provisions in section 10.3. Its effect did not amount to impermissible micro-management, and it did not prevent disciplinary action for misconduct such as malingering. The Department’s former contractual highlighting was contextual support for the intended status of at least some Part A provisions, but each provision still required individual construction.

The High Court’s declarations were upheld. The later attendance-management policy did not vary the contractual term.

1. Court of Appeal (Civil Division) — On 14 April 2016, McCombe LJ dismissed the Department’s appeal. David Richards LJ and Dyson MR agreed.
2. High Court of Justice, Queen’s Bench Division — On 3 February 2015, Globe J declared that the relevant Staff Handbook provisions were contractual terms and that the later attendance-management policy did not validly vary them.