Drafting an employee handbook: What employers need to know

With employment laws and workplace standards constantly changing, having a clear and up-to-date employee handbook is not just beneficial - it’s a critical tool for compliance and risk management.

This article outlines key legal requirements, practical advice, and content essentials for creating a robust employee handbook that aligns with employment law and supports your organisational goals.

Why you need an employee handbook

Although having an employee handbook is not a statutory requirement, its value is widely recognised across industries. Small and medium sized enterprises (SMEs) in particular, who may lack in-house legal or HR expertise, benefit significantly from a well-drafted document that brings structure and clarity to people management. Here’s some of the benefits:

• Communicates company policies and procedures clearly to all staff.
• Reduces legal risks by setting out legally compliant workplace policies.
• Helps onboard new employees efficiently by explaining rules and expectations.
• Supports consistent treatment of employees across teams and departments.
• Demonstrates compliance with legal and ethical standards.
• Promotes an inclusive workplace culture grounded in fairness and equality.

Legal foundations: What must be included

A well drafted employee handbook should encompass policies and procedures that comply with UK employment legislation. Failure to do so could lead to non-compliance issues, employee uncertainty, and exposure to legal claims.

1. Written statement of employment particulars

Under the Employment Rights Act 1996, all employees and workers are legally entitled to receive a written statement of particulars of employment before or on their first day of work. This includes details such as:

• Job title and duties.
• Pay and working hours.
• Holiday entitlement.
• Sick pay and procedures.
• Notice periods.

While this information is usually covered in employment contracts, many employers include a more detailed version in the handbook for easy access and to provide additional clarification on the finer details (e.g. rules around absence reporting and time off work).

2. Clarification of employment status

UK employment law distinguishes between employees, workers, and self-employed contractors. Each category has different rights and responsibilities. Employers should clearly outline which policies apply to whom to avoid uncertainty or disputes.

For detailed guidance on employment status, refer to GOV.UK's Employment Status Checker.

3. Essential policies

While not legally required to be included in a handbook, employers must have certain policies and procedures in place to meet minimum legal requirements.

• Grievance and disciplinary procedures - must be aligned with the Acas Code of Practice.
• Data protection policies - privacy notice, record of processing, data breach, workplace responsibilities and external privacy notice.
• Health and safety policy statement - for more information, see The Employers' Health and Safety Policy Statements (Exception) Regulations 1975.
• A statement on modern slavery - only applicable to certain businesses in the supply of goods or services whose turnover is greater than £36 million in a financial year. Read the example statement provided by the CIPD.
• Equality, diversity and inclusion - whilst not strictly a legal requirement, having a policy in place is an essential part of defending against discrimination claims and helps ensure that businesses meet their obligations under the Equality Act 2010.

4. Additional policies

Other policies that may be useful to include are:

• Annual holidays and public holidays
• Harassment and bullying
• Sickness absence and pay
• Time off for dependants
• Maternity, paternity and adoption leave
• Working hours and rest breaks
• Flexible working
• Whistleblowing
• Social media and technology use
• Training and development.

Other considerations for modern workplaces

As your workforce evolves, so too should your handbook. Also consider including:

• Hybrid and remote working policies - expectations for home-based work, equipment provision, and working hours.
• Sustainability commitments - your business aligns with ESG (Environmental, Social, Governance) goals.
• Diversity and inclusion metrics - not just policies, but how you measure and improve equity.
• Mental health and wellbeing resources - access to support, time off for mental health, and stress management tools.

These forward-looking additions not only demonstrate care for employees but may also help with recruitment, retention, and brand reputation

Creating and maintaining your employee handbook: Best practice tips

Tailor it to your business

Don’t copy generic templates blindly. A restaurant, for example, will require very different policies to an IT consultancy. Take time to reflect your business culture and operating model.

Use clear, inclusive language

Avoid legal jargon and use plain English. Ensure that the language is inclusive and respectful of all demographics.

Ensure consistency with employment contracts

Make sure your handbook doesn’t conflict or contradict signed employment contracts.

Keep it up to date

Employment law changes frequently. Review your handbook annually or after any legal developments (e.g. new regulations / changes to minimum wage rates).

Include a policy review clause

State clearly how and when the handbook will be reviewed. Add a disclaimer noting whether the handbook is contractual or non-contractual, and the notice required to amend it.

Get expert support

If you’re drafting a handbook for the first time - or updating one that hasn’t been reviewed in years - consider seeking support from HR consultants or qualified legal professionals.

Make It accessible

Share the handbook digitally via intranets or employee platforms. Print versions should also be available for workplaces without regular online access.

Final thoughts

A well-written employee handbook isn’t just about ticking legal boxes - it’s an opportunity to build a stronger, more transparent workplace culture. It sets expectations, protects both employer and employees, and underpins the relationship between management and staff.

For SMEs, especially those without internal legal teams, it’s a powerful risk-management tool. But more than that, it reflects who you are as a business - your values, your goals, and your commitment to fair and lawful treatment of employees.

By investing time into a clear, tailored, and legally compliant handbook, employers can not only meet their obligations but foster a healthier, happier, and more productive workforce.

This article is intended for informational purposes only and does not constitute legal advice. The information is accurate at the time of writing but may be subject to change. For advice specific to your situation, please consult a qualified professional.