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Learn how to create an employee handbook that protects your business and supports your team. Our practical guide covers essential policies, legal requirements, and what to include in your staff handbook.
Written by:Â Fflur Jones, Employment Law Partner, Darwin Gray | Last updated: 20/04/2026 | Reviewed by: Fflur Jones
Every workplace has rules. The question is whether yours are written down clearly or exist only in people’s heads, applied differently depending on who’s asking and who’s answering.
An employee handbook brings your company policies together in one place. It tells staff what’s expected of them, explains how things work, and sets out what happens when problems arise. For you as an employer, it provides a framework for consistent decision-making and evidence that you’ve communicated your expectations clearly.
That matters when things go wrong. Tribunals regularly look at whether employers followed their own procedures and whether staff knew what those procedures were. A clear, well-drafted and comprehensive employee handbook can be the difference between defending a claim successfully and facing an increased compensation award.
This guide explains what an employee handbook is, what you should include, and how to create one that works for your business. We’ll cover the legal requirements, practical tips, and the policy updates you’ll need to make as employment law changes in 2026 and beyond.
An employee handbook (also called a staff handbook, company handbook, or employee manual) is a document that brings together your workplace policies, procedures, and guidance in one place. It typically covers everything from how to report sickness to what happens if someone faces disciplinary action.
Think of it as your employees’ reference guide to working for you. When someone wants to know how to request annual leave, what your maternity policy is, or how you handle grievances, the handbook should give them the answer.
The employment contract is the legally binding agreement between you and each employee. It sets out the core terms: pay, hours, job title, notice periods, and so on.
The employee handbook is different. It provides more detail on your company policies and procedures but is usually non-contractual. This distinction matters because:
Most employers keep their handbook non-contractual deliberately. Employment law changes regularly, and you need the flexibility to update your policies without going through a formal contract variation process each time.
To keep your handbook non-contractual, include a clear statement at the front confirming this. Something like: “This handbook is non-contractual and does not form part of your terms and conditions of employment. We may amend or withdraw these policies at any time.”
Strictly speaking, no. There’s no law requiring you to have an employee handbook. But that’s not the whole picture.
While the handbook itself isn’t mandatory, several things that typically go in a handbook are legally required:
Written statement of particulars: From day one, you must give employees a written statement covering key terms like pay, hours, holiday, and notice periods. You can provide some of this information by referring to a “reasonably accessible document” such as a handbook.
Disciplinary and grievance procedures: Employees must have access to written information about your disciplinary rules and grievance procedures. The statement of particulars must tell them where to find this information, and the ACAS Code of Practice expects employers to have written procedures in your own employee handbook.
Health and safety policy: If you employ five or more people, you must have a written health and safety policy statement.
Beyond the legal requirements, there are compelling practical reasons to have a comprehensive employee handbook:
Tribunal protection: When employment disputes reach a tribunal, one of the first questions is whether the employer followed a fair procedure. Having clear written policies, and evidence that staff knew about them, significantly strengthens your position.
Consistent management: Without written policies, different managers make different decisions. That inconsistency creates grievances, discrimination risks, and a sense of unfairness.
Clear expectations: Staff work better when they know what’s expected. A handbook answers common questions, reducing the burden on managers and HR.
Onboarding: New starters can read the handbook and understand how things work, rather than learning piecemeal over weeks or months.
Defending vicarious liability: If an employee harasses a colleague, you may be able to defend yourself by showing you took reasonable steps to prevent such behaviour, including having clear policies and communicating them to staff.
What you include depends on your business, but certain policies should be in every handbook. Here’s a breakdown of the essentials.
These are arguably the most important policies in your handbook and are the most likely to be under scrutiny if you’re facing legal claims. When things go wrong, whether it’s misconduct, poor performance, or a complaint, your disciplinary and grievance procedures set out how you’ll handle it.
Your procedures must align with the ACAS Code of Practice on Disciplinary and Grievance Procedures. While the Code isn’t legally binding, tribunals take it seriously. If you fail to follow the Code during your termination procedures or grievance processes and lose a case, your compensation award can be increased by up to 25%. If the employee fails to follow it, their award can be reduced by up to 25%.
Your disciplinary procedure should cover:
Your grievance procedure should cover:
Under the Equality Act 2010, you must not discriminate against employees or job applicants based on protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.
Your policy should set out your commitment to equality and your company values, explain what discrimination and harassment look like, and tell staff how to raise concerns. Make clear that breaching the policy is a disciplinary matter.
Important update for October 2026: The Employment Rights Act 2025 introduces a duty on employers to take “all reasonable steps” to prevent sexual harassment, including harassment by third parties. This is stronger than the previous “reasonable steps” requirement. You’ll need to review your policies and training to ensure compliance.
If you employ five or more people, a written health and safety policy is a legal requirement under the Health and Safety at Work etc. Act 1974.
Even if you have fewer than five employees, good practice is to have something in writing. Your policy should cover:
Your sickness absence policy should explain:
Important update for April 2026: SSP is changing significantly. From 6 April 2026:
Explain holiday entitlement, how to request leave, booking procedures, and any restrictions (like busy periods when leave isn’t normally approved). Cover what happens to unused leave at year-end.
Also address other types of leave:
The family leave landscape is complex and changes frequently. Your handbook should cover:
Important update for April 2026: Paternity leave and unpaid parental leave become day-one rights from 6 April 2026. Currently, employees need 26 weeks’ and one year’s service respectively. Update your policies to remove these qualifying periods for leave relating to children born or adopted on or after 6 April 2026.
Since April 2024, employees have the right to request flexible working from day one of employment. They can make two requests per 12-month period, and you must respond within two months.
Your policy should explain how to make a request, the process you’ll follow, and the eight statutory grounds on which you can refuse a request.
Coming in 2026/2027: Further changes are expected that will require employers to explain more fully why they’re refusing requests and demonstrate that the refusal is reasonable.
Under UK GDPR, you must be transparent about how you collect, use, store, and share employee personal data. Your handbook should either contain your employee privacy notice or direct staff to where they can find it.
If you monitor employees (email, internet usage, CCTV, etc.), explain what you monitor, why, and the legal basis for doing so. Transparency is key.
Set clear expectations about using company IT systems, including:
Social media policies are increasingly important. Without clear rules, taking action against an employee for damaging social media posts becomes much harder.
You need a whistleblowing policy explaining how staff can raise concerns about wrongdoing in the workplace. Employees who blow the whistle on certain types of wrongdoing are protected from dismissal and detriment. This applies to new hires and not just those with longer service.
Update for April 2026: Sexual harassment disclosures will become a “qualifying disclosure” under whistleblowing law, giving additional protection to those who report it.
Beyond the essentials, consider including these policies based on your business needs and company culture:
Explain your approach to recruitment and what new hires should expect during probationary periods. This is particularly important given the changes coming in January 2027, when the unfair dismissal qualifying period reduces to six months.
A capability or performance management policy sets out how you handle underperformance, distinct from misconduct. This might include performance improvement plans, support measures, and the process if performance doesn’t improve.
If appearance matters for your business, set clear expectations. Be careful to ensure any dress code requirements don’t indirectly discriminate.
How employees claim expenses, what’s covered, and what approval is needed.
Your approach to alcohol and drugs in the workplace, including any testing arrangements.
Rules around using company vehicles, phones, laptops, and other equipment.
Expectations around protecting confidential business information.
Increasingly, employers are including menopause policies to support affected employees. From April 2026, larger employers will need to create menopause action plans (voluntary initially, becoming mandatory in 2027).
Trying to write an employee handbook from scratch can feel daunting. Here’s a practical approach:
What policies do you need? Start with the essentials (disciplinary, grievance, health and safety, equal opportunities, data protection, sickness, leave policies). Add others based on what’s relevant to your business needs and company culture.
Decide which elements, if any, will be contractual. For most policies, keeping them non-contractual gives you flexibility. Include a clear statement confirming this at the start of the handbook.
Check each policy against current legal requirements. Disciplinary and grievance procedures should align with the ACAS Code. Family leave policies must reflect current entitlements. Data protection policies must comply with UK GDPR.
Generic templates are a starting point, but they’re not enough. A handbook needs to reflect how your business actually operates. A construction company will need different policies than a software business. Tailor the content to your industry, size, and culture.
Use plain English. Avoid legal jargon. If employees can’t understand the policies, they won’t follow them. Short sentences, clear headings, and a logical structure all help.
Make sure policies don’t contradict each other or your employment contracts. Inconsistencies create confusion and risk.
Before finalising, have the handbook reviewed by someone with employment law expertise. Small errors can create big problems. It’s worth investing in getting it right.
Issue the handbook to all staff. Ask them to confirm they’ve received and read it. Keep records of this acknowledgement. It’s not enough to have policies if you can’t show employees knew about them.
Managers need to understand and apply the policies consistently. Training helps ensure the handbook isn’t just a document that sits on a shelf.
Employment law changes regularly. Review your handbook at least annually and whenever significant legal changes occur. The Employment Rights Act 2025 means updates will be needed in 2026 and 2027.
The Employment Rights Act 2025 introduces the most significant employment law changes in a generation. Here’s what you’ll need to update:
Statutory Sick Pay: Remove references to the three-day waiting period and lower earnings limit.
Day-one family rights: Update paternity leave and unpaid parental leave policies to remove qualifying periods for births/adoptions from 6 April 2026 onwards.
Neonatal care leave: Include the new right to neonatal care leave and pay.
Harassment prevention: Update your anti-harassment policy to reflect the duty to take “all reasonable steps” to prevent harassment, including third-party harassment. Document what steps you’re taking.
Whistleblowing: Update to include sexual harassment as a qualifying disclosure.
Tribunal time limits: Be aware that time limits for most tribunal claims extend from three months to six months.
Unfair dismissal qualifying period: The qualifying period for unfair dismissal claims reduces from two years to six months. Review probation policies and ensure performance issues are addressed promptly.
Fire and rehire: Dismissing and re-engaging employees on worse terms becomes automatically unfair in most cases.
Zero-hours contracts: New rights around guaranteed hours and shift notice requirements.
Flexible working: Potentially stronger requirements to justify refusals.
Menopause and gender pay action plans: Become mandatory for larger employers.
Generic templates don’t reflect your business. Worse, they may contain policies that don’t work for your situation or are out of date.
If your contract says one thing and your handbook says another, you create confusion and legal risk. Ensure consistency.
Using language like “the company will” or “employees are entitled to” can make policies contractual even if you didn’t intend them to be. Be careful with wording, and include a clear non-contractual statement.
An outdated handbook is worse than no handbook. If it references old law or procedures you no longer follow, it undermines your position.
A handbook nobody has read provides little protection. Issue it to all staff, keep records of acknowledgement, and remind people it exists.
Long, legalistic handbooks that nobody reads aren’t useful. Keep policies as clear and concise as possible.
No, but certain policies within it are required (disciplinary and grievance procedures in writing, health and safety policy for 5+ employees). In practice, a well-drafted handbook is essential for managing staff effectively and protecting your business.
Most employers keep handbooks non-contractual to allow flexibility in updating policies. Include a clear statement confirming this. Some specific terms (like enhanced sick pay) might be contractual if stated in the employment contract.
At least annually, and whenever significant employment law changes occur. With the Employment Rights Act 2025 introducing changes throughout 2026 and 2027, more frequent reviews will be needed.
Templates can be a starting point, but shouldn’t be used without tailoring. Your handbook needs to reflect your business, your industry, and current law. Generic templates often miss important details or contain outdated information.
Failing to follow your own procedures can make a dismissal unfair, even if you had good reason for the dismissal itself. Tribunals expect employers to follow their stated processes.
Your handbook can specify which policies apply to which categories of staff (employees, workers, etc.). Some rights differ between employees and workers, so clarity helps avoid confusion.
Issue the updated handbook to all staff and ask for acknowledgement. For significant changes, consider a briefing or training session. Keep records showing employees received the update.
You can’t force employees to sign, but you can note that they’ve been given the handbook and explain that the policies apply regardless of whether they acknowledge receipt.
| Term | Definition |
|---|---|
| ACAS Code of Practice | Guidance from the Advisory, Conciliation and Arbitration Service on handling disciplinary and grievance matters. Not legally binding, but tribunals consider it when assessing fairness. |
| Contractual policy | A policy that forms part of the employment contract and can only be changed with employee agreement. |
| Non-contractual policy | A policy that doesn’t form part of the contract and can be updated by the employer, provided changes are communicated properly. |
| Protected characteristics | The nine characteristics protected from discrimination under the Equality Act 2010: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation. |
| Section 1 statement | The written statement of employment particulars that must be given to employees on or before their first day of work. |
| UK GDPR | The UK’s data protection regime, based on the EU General Data Protection Regulation but adapted for the UK post-Brexit. |
| Vicarious liability | Where an employer is held legally responsible for the actions of their employees. |
Creating or updating an employee handbook takes time and expertise. Getting it wrong leaves you exposed. We help employers get it right.
We write handbooks in plain English that your staff will actually read and understand. We tailor them to your business, not generic templates. And we keep them up to date as employment law evolves.
As Wales’ leading Welsh language law firm, we can provide all documentation and advice in Welsh or English.
Need help with your employee handbook? Contact us for a free, no-obligation chat about how we can help.
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