3 Reasons Why Your Small Business Needs an Employee Handbook

By Patrick Stepanian Legal Manager and Counsel, Peninsula Canada

There is no doubt that a well-drafted employment contract is critical to protecting the interests of your small business and your employees. An employee handbook, though often overlooked, is just as important a document.

Not creating an employee handbook is a common mistake made by employers. Although it is not required by law, a comprehensive employee handbook is a useful tool for effective HR management.

What is an employee handbook?

An employee handbook is a document that defines a company’s policies, values, vision, and expectations on employee behaviour and performance. It also lays down the disciplinary process to be followed in case of violation of company policies.

It is typically created when a company is started and given to new employees during onboarding. An employee handbook is also referred to as an employee manual or a staff handbook.

What are the benefits of having an employee handbook?

There are several benefits to creating an employee handbook. A well-drafted employee handbook:

1. Helps with new staff onboarding

An employee handbook is an excellent tool to help your new staff understand your company’s values, vision, and culture. It is a written document that details your company’s mission and values, and all your policies and procedures.

It supplements the job contract and the onboarding process by offering additional information on company policies, such as dress code, overtime, confidentiality, vacation, anti-harassment, termination.

As your new staff adjusts to a new workplace, the employee handbook serves as a roadmap they can refer to and get clear directions on what is acceptable behaviour and what isn’t.

2. Streamlines your internal operations

By setting down policies and procedures, a staff manual improves communication and reduces conflict in the workplace. Managers and employees can refer to it in case of any issue or disagreement. Clear and comprehensive policies help ensure all employees are treated fairly. A staff handbook can also answer the commonly asked questions your employees may have about company policies.

3. Reduces risk of lawsuits

An employee handbook ensures you are compliant with federal and provincial labour laws. Clear policies and their uniform implementation reduce risk of discrimination and wrongful termination claims. It can save you time and money that would be spent on litigation, not to mention the negative publicity that can come with it.

It is a good practice to ask your employees to provide a signed acknowledgment of having received and read the employee handbook. The acknowledgment (to be saved in your employee records) serves as proof that the employee was informed of and reviewed the company policies at the start of their employment. This can help protect you in case of termination claims or any disagreements over company policies.

What policies should be included in the employee handbook?

Your industry, business needs and size largely determine the policies and the amount of detail you should include in your staff manual. Some basic areas that your employee handbook should cover include:

Company background: This includes your history, mission, values, vision.

HR policies: Some basic policies such as code of conduct, terms of employment, hours of work, lunch and rest breaks, dress code, equal employment and non-discrimination policies, occupational health and safety policy, overtime, resignation, and termination policy. Employment benefits: For example, paid time off such as sick leave and vacation leave, dental insurance, employee assistance program, wellness programs, travel assistance, education and training reimbursement.

What are some good practices to follow when drafting an employee handbook?

There are several things you must keep in mind when developing an employee handbook for your small business.

It is important that you know the federal and provincial labour laws so as to not create any company policies or procedures that may be in violation.

You should develop policies based on the specific needs and challenges of your workplace to reduce risk of liability.

The employee handbook should be easy to read. It should be written in a clear and simple language that leaves no room for misinterpretation. While it is good to provide details and leave no scope for loopholes, you may not want to make it so lengthy that it becomes unreadable.

Your employee handbook should be regularly reviewed and updated to reflect changing legislation. It should be accessible to all your staff, whether as a hardcopy in your workplace or as a PDF file available to download and view on your office intranet.

Are you looking to create or update your employee handbook?

If you’d like to develop an employee handbook for your business or are thinking of updating your existing one, Peninsula can help.

Our advisers can review your current handbook, work contracts, and any other HR documents, and help you identify any potential issues with your wording or policies.

About Peninsula

Peninsula is a trusted HR and Health and Safety advisory, serving over 80,000 small businesses worldwide. Clients are supported with ongoing updates of their workplace documentation and policies as legislation changes. Additionally, clients benefit from 24/7 employer HR advice and are supported by legal assistance.