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“But you Promised!” When Workplace Policies Become Binding
A recent decision of the Supreme Court of Queensland’s Court of Appeal, in Gramotnev v Queensland University of Technology  QCA 127, has served as a timely reminder that courts are willing to find that, in certain circumstances, workplace policies impose contractual obligations on employers.
Mr Gramotnev argued that the University had breached his employment contract in eleven ways during nine years of employment. While finding that Mr Gramotnev’s claims against the University were “lengthy, convoluted and highly repetitive”, the Court of Appeal set aside the original judgment dismissing the proceeding. In doing so, it held that the primary judge was incorrect to decide that the University’s Senior Staff Disciplinary Policy (the “Policy”) did not form part of Mr Gramotnev’s employment contract.
The Policy set out, in concrete terms, four phases to be followed in the management of allegations of misconduct made against senior employees. While Mr Gramotnev’s interpretation of the Policy was misguided (in that he argued that it required the University to take certain steps in respect of a complaint made by him, rather than guaranteeing that a particular procedure would be followed in respect of disciplinary procedures leading to his dismissal) the Court of Appeal held that there was nothing to suggest “that if the [University] refused to comply with the procedures of the policy, a staff member who suffered loss or damage could not claim damages for breach of contract”. In reaching this conclusion, it appears significant that Mr Gramotnev’s employment contract stated that his “employment conditions include the provisions of the Manual of Policies and Procedures and relevant University Statutes and Policies as current from time to time”.
Lessons for employers
Whether a workplace policy forms part of an employment contract will depend on
- the language of the policy; and
- the terms of the contract.
Policies expressed in “promissory terms” may be held to create contractual entitlements and obligations unless there is a good reason to hold otherwise. In order to ensure they are not inadvertently bound by policies, employers must ensure their employment contracts are drafted to stipulate that policies do not impose contractual obligations on the organisation. Failing to do so can expose organisations to hefty claims for damages if policies (including policies on bullying and harassment, disciplinary procedures, and work, health and safety) are not followed.