Employee handbooks can be a useful tool in managing the workplace. When done properly, they offer a number of advantages, such as helping to formalize various processes (fostering consistency and transparency); reduce the risk of arbitrary decision-making and/or favouritism; promote legal compliance; reinforce company culture and values; and defend against potential employee claims and/or complaints.

To realize these rewards, however, employee handbooks must be developed carefully, reviewed regularly, and applied consistently and fairly.

In our practice, we see situations where the employee handbook causes more harm than good. Rather than functioning as a useful implement, they become an operational hurdle or, worse still, a source of unintended liability.

Potential pitfalls employers should be aware of and avoid regarding employee handbooks

To ensure that employee handbooks are fit for purpose, employers should be aware of, and avoid, the following potential pitfalls:

1. Implementing a policy that fails to meet minimum legal requirements: while it may sound trite, employers should ensure that any policy, rule, or requirement set out within a handbook meets applicable legal requirements. Employers may fall short of meeting minimum legal requirements in different ways. For example, an employer may be required to have in place a particular policy (such as anti-harassment policy or an electronic monitoring policy) and fails to do so. Another deficiency may be having a required policy, but its content is non-compliant with statutory requirements.

For example, an employer may have an anti-harassment policy but fails to provide for an investigation process in the event of a complaint being received (contrary to the Occupational Health and Safety Act). Where an employer has staff working in more than one jurisdiction, the situation can be more complex, given the variance in legal requirements from one locale to the next. In these circumstances, it is critical for employers to ensure that its handbook is compliant everywhere its staff perform work. For example, a handbook could address overtime pay entitlements (and the threshold at which an employee becomes eligible for overtime). If this threshold differs across jurisdictions, however, the employer must ensure that it accounts for this variance to avoid unwittingly creating an unlawful policy.

2. Creating needlessly complex and/or cumbersome processes: not every workplace is the same. The policy framework that makes sense for a large multi-jurisdictional employer is likely to differ from that of a local business with less than 30 staff. That said, it is not uncommon to see employers develop and implement complex and cumbersome processes that are neither required by law nor necessary to further their operational goals. One such example is the development of progressive discipline policies. While such policies may make sense, and can be useful in creating a transparent framework, employers should always look to retain flexibility to deviate in situations that may warrant a more immediate and severe sanction. The bottom line is that policies should enhance rather than hinder an employer’s operations, and needless red tape ought to be avoided at all costs.

3. Communicating the handbook to staff: one of the most common deficiencies we see is an employer neglecting to bring the handbook to the attention of its employees. An employer may develop a gold standard handbook, however, unless it has been brought clearly to the attention of staff, it is not worth the paper it is written on (with the employer likely unable to rely on its content). As such, when implementing a policy handbook, employers should ensure there is a process to bring the document to the attention of all staff and to record this step having been taken.

4. Consistent application: administering a policy in an ad hoc or variable manner may both impact staff morale (i.e., people perceive unfairness or even discriminatory intent) and potentially attract unintended liability. For example, if a request for leave is treated differently in substantially similar circumstances, thus reflecting a deviation from the handbook, the employer may then be open to complaints of unfairness, favouritism or perhaps even a failure to accommodate. It is thus important for employers to train their staff on the importance of following policy and ensuring it is applied consistently and fairly in all circumstances.

5. Regularly review the handbook: Both operational need, and legal requirements, change over time. As such, employers should treat their handbook as a living document that is subject to ongoing review. For example, an employer may realize that one of its processes is unwieldly or that there are operational gaps that need to be addressed. In these circumstances, employers should revise the handbook to ensure it remains current and fit for purpose.

Another consideration: Changes in the law

Changes in the law are also important to account for and reflect. For example, prior to 2022, there was no requirement for Ontario employers (with 25 or more staff) to have a policy addressing electronic monitoring of their staff. Thus, an employer that has not updated its handbook in a few years may now have a document that fails to meet minimum legal obligations. Such changes continue to occur. As of January 1, 2026, Ontario employers (with 25 or more staff) will be required to ensure that any job postings include certain prescribed details required by the Employment Standards Act, 2000. Addressing these requirements in a handbook is one way to ensure a consistent and lawful approach.

Last words

Employers are encouraged to consider whether their operations could benefit from implementing an employee handbook or, if there is one already in place, whether it could benefit from being reviewed and potentially updated. In making any such changes, employers should work with their legal counsel to ensure compliance with applicable law.

By Paul Willetts, Vey Willetts LLP