Employee Handbook

What are they and why does your business need one?

First published on Thursday, Mar 16, 2023

Last updated on Monday, Jul 08, 2024

As an employer, you need to make it clear to your new employees what is expected of them during their time with you. This includes conduct, policies and grievance procedures.

An employee handbook is a great way of ensuring that all new hires know what your company values are and how they can succeed in your company. Failure to have one may lead to conflict with an employee in the future.

In this guide, we'll discuss what an employee handbook is, why they're important, and what to include in yours.

What's an Employee Handbook?

The main role of an employee handbook is to communicate your company's values, workplace rules and consistent policies to both new and existing employees.

Having a good employee handbook will help new employees understand what is expected of them whilst at work. This helps to strengthen the employment relationship between employer and employee.

Employee handbooks can be used for both large and small businesses.

Are Employee Handbooks a Legal Requirement?

No, unlike an employment contract, which is legally required, you have no obligation to provide your employees with a handbook.

However as an employer, you have a legal requirement to put certain policies and procedures in a written statement. Such as health & safety (only if you have more than five employees) and data protection.

Employee wearing a welding mask

When Should Employees Receive Their Handbook?

It's best practice to provide your new starters with their employee handbook on their first day. However if you can, you may also send them it before they start. You should give them the handbook in partnership with a welcome letter as part of the induction process.

Why Are Employee Handbooks Important?

As your business grows, you should never underestimate the importance of having a staff handbook. They're vital to help a business run smoothly.

They help to ensure you're meeting your legal requirements, as well as making a new starter aware of the do's and don'ts of your company. However there are a variety of reasons why they're important, let's discuss them in more detail:

Makes You Legally Compliant

Employee handbooks are a great way in ensuring you're fully compliant with employment law. Having a clear set of policies ensures that both you and your employees are acting legally.

Having a handbook allows you to respond to any changes in employment law or legislation. It's important you alter your handbook when changes are made. This will increase your employees' confidence in you as they'll be aware you're keeping up to date.

Helps to Avoid Conflict

Employee handbooks are a great way to avoid conflict with your employees. Using your handbook to clearly outline your code of conduct means your employees know what is and isn't acceptable.

The handbook will also explain the outcomes and consequences of poor employee behaviour. This will hopefully deter them from behaving poorly. If employees are unsure of a company policy, they can simply check their employee handbook.

Helps Employees Integrate Into Your Company Culture

An employee handbook is a vital component in building a positive workplace culture. They are your opportunity to make it clear what you expect of your employees, your aims for them and how you'll help to develop them professionally.

Providing new hires with a handbook when they start helps both employer and employee be aware of what's expected of them.

Protects You Against Claims

Having a watertight employee handbook can help you avoid claims and protect yourself from future incidents.

It's advisable to get all employees to sign an acknowledgement form confirming they've read it. This will protect you if a conflict or dispute arises in the future.

If an employee decides to raise a claim against you, being able to show you have strong policies will bring you extra protection.

Helps the Onboarding Process

An employee manual can play a great part in your onboarding and induction process. It's important that all new hires read through the handbook when they start employment so they're fully aware of their responsibilities, expectations and expected conduct.

Failure to provide a staff handbook could lead to them not understanding the rules. This has the potential to lead to conflict in the future.

What Should You Include in Your Own Employee Handbook?

There are many employee handbook examples out there, but including the below in yours will mean you create the best one for your business. It's important you understand what should go in your employee handbook. Doing so means that you create the best possible one for your business.

Let's discuss what to include in yours in more detail:

An Employee Welcome Letter

The first part of your employee handbook should be a welcome letter to all new employees. This letter should include any information they need to know, such as:

  • Your company's mission.
  • The nature of your business.
  • Information on your company's history.
  • Details of the company structure.

Employment Basics

This part of your handbook explains the basic terms surrounding someone's employment. Employees can use this section as a fallback if they have any basic questions.

You should include the following in this section:

  • Basic rules about attendance.
  • Your equal opportunity policy.
  • Your recruitment policy (this is important for any internal recruitment opportunities).

Company Values

It's important to include the core values of your business within your employee handbook.

Detailing this will help promote them, as well as developing your company culture. Hopefully leading to your employees keeping them in mind when looking over your company policies.

If your employees aren't aware of your values then you can't complain if they don't work in alignment with them.

Employment Policies

You should include all your employment policies within your staff handbook. These key policies are important to how your business runs daily, so should be included. Let's discuss which policies should be included in your employee handbook:

Health and Safety Policy

Having a health and safety policy within your handbook is a legal requirement. You must keep your employees, contractors and members of the public safe at all times.

Included in the policy should be the accident reporting procedure, who your health and safety management team are, and how you're keeping everyone safe. Failure to do so can lead to serious injury and claims being raised against you in the future.

Equality, Diversity and Inclusion Policy

Although an equality policy isn't a legal requirement in the UK, it's unlawful to discriminate against employees with a protected characteristic under the Equality Act 2010.

So your policy should include how you'll avoid discrimination and the steps you'll take if it does happen in your company. Including this policy presents a positive message to your employees and increases their confidence that you're promoting an equal workplace.

Anti-bullying and harassment policy

It's important you include an anti-bullying and harassment policy within your employee handbook. This policy should include how employees should report any bullying, harassment or sexual harassment.

You should say bullying or harassment will lead to disciplinary actions .

Leave and Absence Policy

An absence policy should be included in your employee handbook. Including who employees should contact for an absence, rules on unathorised absences and disciplinary actions for violating the rules.

You should also make clear the entitlements for all types of leave. There are legal requirements for how long employees can have off work for things such as paternity or maternity leave. There are also other types of leave that you should to include entitlements for.

For example:

  • Adoption and parental leave.
  • Flexible or remote working policy.

It's vital you put the correct amount of time down in the handbook. You must check this before giving the manual to your employees.

IT Policy

An IT policy should be included in your employee handbook. Internet security is vitally important to your whole business, it shouldn't be underestimated.

You should make clear within your policy what employees can use the internet for and overall guidance of social media. Clearly explain the effects of misusing the internet.

Mental health and employee well-being policy

The well-being of your employees should be one of your main priorities. So including a mental health and employee wellbeing policy within your handbook is a great way of showing them you're invested in this.

Set out where your employees can get help if they're suffering from workplace stress or other health problems. And if you have an Employee Assistance Programme in place, this is where you'll include details of it.

Data protection policy

Data protection and GDPR are legal requirements. And as an employer, you must comply with all UK GDPR and privacy laws.

Including a company policy on data protection within your staff handbook will help keep both you and your employees compliant. Include information on how you'll be collecting, using, storing and keeping data secure.

Company car policy

If you're choosing to offer company cars as a benefit. You should inform employees of all the rules surrounding it and how they qualify for one.

Code of Conduct

Your code of conduct policy provides a clear framework and set of rules on employee behaviour. This includes how to treat colleagues, management, and the facilities.

It's important you make this section clear and concise as you need new employees to understand what you expect of them.

Employee Development

The development of your employees should be one of your top priorities. How you develop the skills of your employees is key to retention and quality of work.

Having a clear employee development plan within your handbook will help make it clear to you new starters how they can progress in your company. If employees see that you're willing to invest in their development, they're more likely to work harder to improve their ongoing performance.

Employee Benefits and Perks

Benefits and perks are one of the main reasons why an employee chooses to join your company, so having a section on this in your handbook is crucial.

It's important to include the following:

  • Pension schemes.
  • Bonus and profit share schemes.
  • Private health or life insurance schemes.
  • Additional annual leave.

You should make it clear within this section how employees can receive these benefits.

Paid Time Off

Within your employee handbook should be how much paid time off each employee is entitled to.

You should also make clear how employee entitlements may increase, for example with additional years of service.

Disciplinary and Grievance Procedures

You have a legal requirement to provide employees with details of how they can raise a grievance. This is included in your written statement.

It's advisable to have different policies for different circumstances such as bullying, harassment and the use of alcohol or drugs at work.

What Other Policies Should to be Included?

There are more than just the above-mentioned policies that should be included in your employee handbook, such as:

  • Dress code.
  • Drug and alcohol policy.
  • Mobile phone policy.
  • Social media policy.
  • Employee expenses policy.

Two cafe workers working on the till

Tips for Creating an Employee Manual

It's important to create a personal and effective employee handbook for staffs. And we have some tips for you to follow when creating yours.

Let's discuss them in more detail:

Create Your Handbook Digitally

Your handbook should be easily accessible to both you and your employees, and a good way to do that is by creating it in a digital format. Ensure you include a contents list, so individual policies can be easily found.

Creating it digitally will also save you extra costs on printing documents that may become out of date.

Make Your Handbook Non-Contractual

You should make clear within your handbook that your policies and procedures are non-contractual. This is so you can change elements of them without having to get prior agreement.

Contractual terms should be kept within their employment contract, which includes salary details and job responsibilities.

Regularly Update Your Handbook

Ensure your employee handbook is updated regularly to keep in line with any changes to employment law and legislation. It's important to show your employees that you're up to date with any changes and keeping them informed.

You should create an employee handbook template so that it makes it easier to update whenever required or when new legislation has been passed.

Get Expert Advice on Employee Handbooks with BrightHR

When hiring new employees, it's key that you make them aware of the rules and what is expected of them. This includes policies for annual leave and code of conduct.

Creating a great employee handbook is a way of making sure both your current and new staff understand how your company works daily. Failure to have one could lead to potential conflict in the future.

If you need any advice when employees resign, we are on hand to help. Our BrightAdvice helpline. Give our friendly and helpful team a call on 0800 783 2806 (tel: 08007832806).

Lucy Cobb

Employment Law Specialist

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