When do they form part of a contract?

In Goldman Sachs JBWere Services Pty Limited v Nikolich, the Court determined that an employer breached an OHS-related commitment in its policy document, which formed part of the employment contract, and awarded damages for psychiatric harm.

The decision does not mean that the contents of all policy documents, such as employer goals, create binding obligations on the employer. Any policy statement must be promissory in nature. To work this out, the Court adopted an objective test - would a reasonable person in the employee's position conclude that the employer intended to be bound by the statement? Applying this test, the Court concluded that the following provision: "JBWere will take every practicable step to provide and maintain a safe and healthy work environment for all people" was part of the employment contract. However, statements about a harassment free workplace and grievance handling provisions were descriptive, as opposed to promissory, and therefore not binding.

Lessons for Employers:

• You should carefully consider the wording of policies - words such as "will", "duty", "shall" and "must" are likely to make the statement part of the employment contract
• Make the policy clear (e.g. use of headings, a specific provision) as to which Policy statements are part of the employment contract
• You can vary a policy without the employee's consent, if that right is provided in the policy and/or contract and the policy is not part of a workplace agreement.