Businesses need to review the wording of workplace policy documents or risk costly litigation after a recent Federal Court ruling, a Gold Coast solicitor has warned.

Hickey Lawyers senior associate Nicole Campbell said the decision meant idealistic promises made in policy documents may now be considered contractual agreements.

“This decision could potentially have far reaching implications for businesses,” she said.

“Policy documents typically contain colourful language and sweeping promises, which need to be much more carefully worded in light of this ruling.

“Employers should also expressly state that the policies in these documents are not binding, otherwise they could leave themselves vulnerable to disputes with employees.”

The warning comes in the wake of a case in which an employee argued his employer failed to live up to the expectations set out in a policy document, such as a duty to ‘take every practicable step to provide and maintain a safe and healthy work environment’.

The employee was awarded more than $500,000 damages, but the employer appealed the decision. 

While the judgment made in the appeal softened the blow somewhat for employers, Ms Campbell said it still sent a warning to businesses to review the wording used in their policy documents.

“In the judgment of the appeal, the court decided policy documents would not be considered contractual agreements unless a ‘reasonable person’ would consider them to be so,” she said.“

This means businesses still need to be very careful about the wording they use in these documents, ensuring they do not imply it is in any way a contract.

“For example, employers should make sure they use descriptive words rather than promises and avoid words like ‘we’, ‘us’ or ‘employer’, which puts the onus on the business.

“Instead, these documents, which are typically more about how employees should treat each other and behave in the workplace, should use words like ‘you’ and ‘employee’.”

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