All the big employers have them: employee handbooks. They love their handbooks. Human Resource departments spend so much time and money putting them together. So, of course, many employees come see me and first thing they say is the Employer did not follow their own policy. The employee says it like that simple fact should answer all my questions. But, not following their own employee policies tells me nothing. Because, most employers do not follow their own handbook when it suits them.
Employee handbooks are almost never binding on the employer. This issue arises often when an employee is fired and they complain that they were not written up three times before they were fired. Sure, many employer policies state that an employee must be written up three times before being fired. But, almost every employee handbook will also contain a provision that the handbook is not binding on the employer. That provision renders the handbook non-contractual.
The confusion arises when the Human Resources office indicates that the manual is binding. It may be binding informally, but if it has a non-contract type provision, it is not binding legally.
The employee handbook is helpful to the employer regardless of its legal effect. Every good employer wants to provide opportunity for employees to improve. The handbook provides a mechanism for employees to improve and to avoid disciplinary issues. Many employees do improve after a verbal or written counseling.
There was a brief time when employee handbooks were found to be binding on the employer as a contract. There were one or two court decisions in the late 1980’s and early 1990’s that found employee handbooks to carry contractual effect under certain circumstances. Employers then started putting a clause in the handbook that states the handbook is not a contract. so, today the overwhelming majority of employers have non-binding employee handbooks – despite what you may hear at Human Resource presentations.