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when is "non contractual" actually contractual?

06 May 2011 #Employment

In Watkins v Journeys Toward Recovery ET/1606842/10 the Tribunal held that parts of a handbook that is stated to be non-contractual was in fact incorporated into the Claimant`s contract of employment.

In or around April 2005 the Claimant was issued and signed his contract of employment. Under the contract he was entitled to enhanced sick pay, at his employers discretion, in "exceptional or deserving" cases. The contract expressly referred to the staff handbook in relation to sick pay. It stated that the handbook was non-contractual. This was reiterated in the handbook itself.

The Claimant`s contract also contained a clause to the effect that the Respondent could make reasonable minor changes to his contract by way of notice to employees, and significant changes by one month`s written notice and full consultation and negotiation. 

The sick pay section of the handbook issued in April 2005 set out an entitlement to enhanced sick pay. The handbook stated that although it was not contractual, any proposed changes to it would be subject to consultation and negotiation.

In 2006 the handbook was reviewed and the provisions relating to enhanced sick pay redrafted. The Claimant did not sign any documents expressly accepting changes to his terms and conditions.

In July 2010 the Claimant commenced a period of sickness absence. He did not receive enhanced sick pay during his absence and brought a tribunal claim for unlawful deduction from wages.

The tribunal upheld Mr Watkins` unlawful deduction from wages claim, and awarded him the net sum of £2,175.29.

It held that the sick pay provisions in the staff handbook were incorporated into Mr Watkins` contract of employment. A general statement that the handbook was not contractual was not sufficient to render it so, when it contained key terms and conditions not included in, but expressly referenced in, the employment contract. It also held that the Claimant had not, either expressley or impliedly accepted the changes to his contract.

It is clear from this judgement that employers must take care when providing a discretionary benefit not to make it contractual either by implication or incorporation.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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