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When you start a new job, you might need to sign an employment contract. You will also get an employee handbook that explains company policies. But what happens when these two documents conflict? Does an employment contract override company policy?
Understanding the difference between these documents is crucial for protecting your rights. Knowing which one takes precedence can help prevent legal issues and ensure you comply with the correct workplace rules. At Gardner Employment Law, we can help ensure compliance.
Understanding the Difference Between Employee Handbooks and Employment Contracts
Both employers and employees must recognize the distinct roles of employment contracts and employee handbooks in defining workplace expectations. While they may seem similar, they serve different legal purposes.
Employee Handbook – This document outlines company policies, procedures, and workplace expectations. It typically covers topics such as:
- Workplace conduct and employees’ behavior
- Disciplinary actions and termination procedures
- Benefits, dress codes, and attendance policies
- Use of company property and cybersecurity policies
- Anti-discrimination and workplace safety rules
Handbooks offer clear guidelines, but they are not usually legally binding. They must include specific promises that courts recognize as enforceable. Employers also have the right to update policies at any time, which means employees should review any changes carefully.
Employment Contract – This document is a binding contract that establishes the terms of employment between the employer and the employee. It typically includes:
- Job responsibilities and performance expectations
- Salary, benefits, and compensation structures
- Work hours, vacation entitlements, and sick leave
- Confidentiality clauses and non-compete agreements
- Termination conditions and dispute resolution procedures
Since a contract requires mutual agreement from both parties, employers cannot change its terms unilaterally. If a company policy contradicts an employment contract, the contract generally takes precedence.
You must understand these distinctions to navigate workplace expectations and ensure your rights are protected.
When Does a Company Policy Take Priority Over a Contract?
An employment contract usually comes first over an employee handbook. However, there are times when company policies matter more. One such situation is when the contract explicitly requires employees to follow company policies. In this case, the policies can become enforceable as part of the contract, especially when they cover important areas like workplace conduct, confidentiality, and disciplinary procedures.
Another important factor is legal compliance. Certain policies, such as those related to workplace safety, wage laws, and anti-discrimination regulations, cannot be overridden by a private contract. If an employment contract conflicts with a policy mandated by law, the legally required policy takes priority.
If an employer updates the employee handbook after an employee has signed the contract, the new policies may take precedence depending on the nature of the changes. If these updates significantly alter the terms of employment or employee rights, the employer may need to obtain the employee’s consent before enforcing them.
In cases where there is confusion or disagreement over whether a contract or policy applies, employees should review the documents carefully and seek legal advice to clarify their rights and obligations. Understanding the interaction between employment contracts and company policies is crucial for navigating workplace expectations.
How Employees Can Protect Their Rights
To ensure your rights are safeguarded, keep these points in mind:
- Review all documents carefully before signing an employment contract to ensure you understand both the contract and company policies.
- Check for disclaimers in the employee handbook, which may indicate that policies are not legally binding.
- Seek legal advice if you’re unsure about conflicts between a binding contract and company policies.
By staying informed about your employment agreements, you can prevent legal issues and make sure your rights are fully protected in the workplace.
Which Is It – Contract or Policy?
At Gardner Employment Law, we offer our expertise to clients to interpret both contracts and policies. What may seem like a contract may actually be a policy (and vice versa). It is good to know the difference. Contact us today.