Why you should have an EMPLOYEE HANDBOOK and how to prepare one Labour Department Hong Kong WHY YOU SHOULD HAVE AN EMPLOYEE HANDBOOK AND HOW TO PREPARE ONE LABOUR DEPARTMENT HONG KONG APRIL 1988 Printed by the Government Printer, Hong Kong 162028—200L—5/88 CONTENTS page The purpose 1 Guide to the contents of an employee handbook 1 Part I. Part II. Part III. Part IV. Part V. Part VI. Message A brief history of the company The company's personnel policy Conditions of employment terms of employment termination of employment wages or salaries time recording hours of work holidays medical treatment, compensation and sickness payment diseases protective clothing and equipment retirement benefit schemes accommodation or quarters transport transfer promotion, training and career development Establishment, factory, office rules personnel records admission to company premises accident prevention absence grievances and complaints company property employees' property overalls and uniforms search fire and fire precautions entrances and exits betting and gambling on company premises collections for employees meals on company premises employees' vehicles parcels sale of goods on company premises literature notices joint consultation trade unions alterations to conditions of service and rules Other services and information personnel department recreational and social facilities savings facilities educational facilities for employees' children official publications suggestion schemes Preparing the handbook 1 2 2 2-5 2 2 2-3 3 3-4 4 4 4 4 5 5 5 5 5 5-7 5 5 5-6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8-9 Issuing the handbook 9 The handbook and the contract of employment 9 THE PURPOSE OF AN EMPLOYEE HANDBOOK An employee, in starting work, accepts the terms of employment offered. An employer, in engaging a worker, accepts that the employee is sufficiently qualified to fill the vacant post, possibly after a period of training or probation. This voluntary agreement between the two parties implies certain rights and obligations. These should be clearly defined in writing, preferably in a handbook, and issued to each employee. The value of issuing a handbook to each employee is that every employee has a written statement of his rights and obligations. The handbook can, conveniently, include information about the firm or organization to help create a spirit of understanding and to sustain confidence that the employer is interested in the wellbeing of his employees. If individual employees are left in no doubt about their rights and obligations, areas of possible conflict are reduced and the risks of disputes are minimized. Employees, aware of all the benefits provided for them, are more likely to regard themselves part of a sincere organization. As a consequence, these may result in better labour relations and greater productivity. GUIDE TO THE CONTENTS OF AN EMPLOYEE HANDBOOK The contents of the handbook will depend upon several considerations. Some of the most important are set out below: (a) the type of establishment, for example, factory, commercial organization, public utility, or service (b) the grades to which the handbook applies, for example, monthly rated staff or piece-rated factory hands (c) the scope of activity of the establishment, for example, a single factory or a large commercial organization covering various operations. Whatever considerations arise, it should be possible to include the following points in the handbook. With appropriate amendments, deletions, and additions, a suitable handbook can be devised to meet the needs of any organization. Part L Message This is not essential but a personal message from the owner, the directors, the managing director, or the general manager makes a good introduction both to those who are already employed and to new entrants. Part II. A brief history of the company This is also not essential but a brief history of the company, including, where possible, photographs and an organizational chart, is useful. Part III. The company's personnel policy This is most important and should be given prominence at the beginning of the handbook. It provides the management with an opportunity not only to state clearly its personnel policy but also to emphasize the mutual responsibilities of management and employees. It should stress the necessity for working rules which, if respected, will lead to greater safety and improved efficiency of operations. It should state clearly the management's policy on training and promotion and include detailed information on the machinery in operation for dealing with grievances of staff. If the organization operates joint consultative arrangements or recognizes trade unions, the company policy and the procedures should be explained. Part IV. Conditions of employment This section should include the following items: subject information to be included terms of employment Hourly, daily, weekly, or monthly basis termination of employment Period of notice required to be given by either side on termination of employment under normal circumstances. When the employee is engaged on probation in the first instance, details should be given in a separate section wages or salaries (i) Rates of pay or salary scales should be included, possibly as an appendix. Alternatively, it should be stated where the information can be obtained (ii) Rates of pay for working overtime, shift work, night work, work in stand-by and typhoon conditions, and for agreeing to work on statutory and customary holidays and on rest days when this is legally permissible (iii) Merit rates involving extra payment for additional qualifications or successfully completing a training course (iv) Methods of computing wages or salaries on hourly, daily, weekly, monthly, or piece rates and if calculated on the basis of time recorded subject information to be included (v) If an employee is piece-rated, the method of calculating piece-work and the procedures for introducing new rates, adjusting existing rates, and redressing complaints about rates (vi) Details of the pay period, when it begins and when it ends, for example, twice a month in arrears, payment being made not later than the 7th and 22nd of each month (vii) Procedure for payment, for example, on the factory premises, at a specified time and place on certain days (viii) Procedure whereby an authorized representative of an absent employee may collect pay (ix) Method of calculating cost of living allowances, if any (x) Other allowances, for example, travelling time, meals, educational, maternity (xi) Conditions of payment of bonuses, for example, on Lunar New Year, on completion of qualifying satisfactory service time-recording (i) Procedure for recording periods worked, for example, clocking on and off, time sheets, attendance books (ii) Penalties for not following the required procedure or for recording another employee's time hours of work (i) On a day basis-—the standard daily working hours stating starting and finishing times, meal or rest periods or other breaks with or without pay (ii) On a shift system: (a) if shift system is applicable to all or selected categories of employees (b) length of shifts stating starting and finishing times, period of rotation, meal or rest periods or other breaks with or without pay (iii) Normal arrangements for day work but provisions for night work as and when required including details of hours, starting and finishing times, meal or rest periods subject information to be included (iv) Women and young persons—conditions of service to be detailed separately if different from other employees holidays (i) Statutory and customary—conditions to be satisfied for holiday pay (ii) Qualifications if paid annual holidays are given, for example, a minimum number of months of service and if holidays can be accumulated—leave or part of such leave or payment in lieu granted to employees whose services are terminated under normal circumstances or who resign medical treatment, compensation, and sickness payment (i) New employees—requirement of compulsory medical examination by a specified doctor and at the employer's expense before being engaged (ii) Requirement that all or some employees must be regularly examined by a specified doctor at the company's expense (iii) Medical, dental, and hospital treatment facilities provided for employees and their families (iv) Procedure for reporting sickness at work and for non-attendance (v) Procedure for reporting minor and major accidents at work—how to claim employees' compensation (vi) Arrangements for first aid and location of first aid boxes (vii) Sick pay—conditions under which granted with pay, for example period of service—maximum number of days in a year—certificate from the company or specified doctor—hospitalization—payment during hospitalization—liability for hospital fees—injury or industrial diseases, details of payment diseases Employee to report if in contact with, or suffering from, any specified diseases'—penalty for not reporting protective clothing and equipment Responsibility for providing and for care and inspection of protective clothing and equipment—penalties for not wearing subject information to be included retirement benefit schemes (i) Rules governing schemes, for example, minimum age or years of service, contributory or non-contributory, compulsory or voluntary (ii) Payment, if any, on premature retirement, death, dismissal, or resignation accommodation or (i) Employees entitled—rent, if any quarters ^ Conditions attached to entitlement—grounds for instructing employee to vacate, for example, on dismissal transport Conditions for use of company's transport—free or on payment—rules regarding travelling on company vehicles and liability in case of accident transfer (i) Employees to accept a transfer if required (ii) Conditions if employee requests transfer on personal or medical grounds promotion, training, and career development (i) General principles of the company's promotion and career development policy (ii) Training provided by the company or available to employees Part V. Establishment, factory, office rules The subjects detailed below are a guide to matters which may be included in this section subject information to be included personnel records (i) Requirements to be supplied by the employee (ii) Employee's responsibility for notifying changes, for example, change of address, marriage, increase in the family, death of a registered dependant admission to company premises Regulations, including the issue, production, and return of a pass accident prevention (i) Rules giving details of the responsibilities of management and employees subject information to be included (ii) Statutory requirements (iii) Details of any safety committee absence (i) Procedure for obtaining prior permission for absence (ii) Leaving the job to go to another part of the building (iii) Arriving late—leaving early (iv) Informing the management if unable to come to work for any cause, e.g. family problems, sickness grievances and complaints (i) Procedures to be followed (ii) Functions of the supervisor or foreman (iii) Access to manager (iv) Procedure for recording offences on personnel records company property Employee's responsibility and liability for damage or loss employees's property Provisions for safe keeping and company's liability overalls and uniforms (i) To whom supplied and the conditions attached, for example, supplied free, must be worn during all working hours, employees' responsibilities for safe keeping and care, provisions for laundering, return on leaving employment (ii) If not supplied by the company, facilities, if any, provided by the company for purchase and laundering search Rules governing search, including who can be searched by whom and when fire and fire precautions (i) Precautions to be taken to prevent fires, for example, no smoking (ii) Fire drills (iii) Signals when fire does occur and action to be taken in case of fire (iv) Location of fire hydrants subject information to be included entrances and exits Normal and emergency entrances and exits—where, when, and how to be used betting and gambling on Any restrictions or prohibitions company premises collections from employees Restrictions, for example, prior authority from management meals on company premises (i) Conditions of operation and use of any canteen— details of any canteen committee (ii) Meals provided free or at a reduced rate (iii) Conditions under which employees can bring in and consume their own food, for example, only in the canteen employees' vehicles (i) Bicycles, scooters, motor cycles, and cars—parking on company premises (ii) Responsibility for safe keeping—rules regarding driving on company premises parcels Restrictions on taking in and out of company premises sale of goods on company premises Prohibition or. restrictions literature Restrictions relating to distribution or circulation on company premises notices (i) Notice boards—location (ii) Type of notices issued by the company (iii) Other notices—permission required—restrictions joint consultation Details of constitution, if in writing, preferably as an appendix trade unions (i) Company's policy (ii) Trade union or unions recognized with names and grades for whom recognized alterations to conditions of service and rules Procedure—how employees will be informed 7 Part VI. Other services and information This section gives suggestions on other matters which may be usefully included in the handbook subject information to be included personnel department Where situated and the services it provides, including advice on personal problems recreational and social facilities (i) Details of those provided by the company savings facilities Facilities provided by the company educational facilities for employees' children Facilities provided by the company official publications Company magazine or newsletter—contents—contributions by employees suggestion schemes Procedure for employees to make suggestions—awards for accepted suggestions (ii) Details of committees, if any PREPARING THE HANDBOOK Although several people may contribute to the handbook, preparation should be entrusted to one person. Before drafting begins, an outline of the subjects to be included should be prepared and considered by a small committee of senior management personnel. Whoever is drafting the handbook should constantly keep in mind that the employees to whom the handbook will be issued may have some educational limitations. It should be in simple and clear language. When the draft is ready, it should be presented to a committee of senior management personnel for consideration. Throughout the period of preparation the Labour Relations Service of the Labour Department is available to give advice, if required. It is recommended that, before the draft is finalized for publication, a copy is sent to the Labour Relations Service which will advise if the handbook includes anything in breach of the provisions of any labour legislation. When the draft is accepted by the appropriate representatives of the management, such as the board of directors, managing director, or general manager, it should be printed and bound, preferably with a hard cover. The booklet should be dated. The language in which the booklet is printed will depend upon the individual establishment and the employees for whom it is designed. If it is necessary to print it in more than one language, it should be clearly stated which is the official version. The method to be used for dealing with any alleged discrepancies in language between the official and any other versions should also be clearly stated in the handbook. ISSUING THE HANDBOOK Before issuing the handbook to individual employees, copies should be given to all members of the management, including supervisors and foremen. It is a prudent precaution to arrange for a detailed explanation to be given to those members of management who were not actively engaged in the preparation of the booklet. If there is a joint consultative committee in operation, it should be kept informed of the preparation and contents of the booklet. When the booklet is ready for issue, the committee should be supplied with advance copies and the contents should be explained to its members. It is not possible to give a standard procedure to be followed when issuing the booklet to individual employees but it is recommended that an explanatory note should be given to each employee in addition to the booklet. The note should explain the purpose of issuing the booklet along with an assurance that nothing in it adversely affects the conditions of employment being enjoyed by them before its issue. THE HANDBOOK AND THE CONTRACT OF EMPLOYMENT Whether or not the handbook constitutes a contract of employment will depend upon its contents. Nevertheless, it should include as far as possible all matters relating generally to the conditions of employment. In all cases, the handbook should include a form of acknowledgement for completion by the employee and return to management. This form should include a statement to the effect that the employee has received and read the handbook and accepts the conditions set out in it. X43766114 HKP 658.3 H77 Hong Kong. Labour Dept. Why you should have an employee handbook and how to prepare one Hong Kong : Govt. Printer, Date Due