How Important are Workplace Policies in an Employment Dispute?
- Anne-Marie Dolan
- 4 days ago
- 6 min read
When things go wrong at work, employers and employees often look to the company’s policies for answers. But how much do these policies matter in a legal dispute? And what happens if an employee never saw or agreed to a policy?
Company policies are written rules that set out how things should work at a workplace. They cover things like:
behaviour at work,
health and safety,
how performance issues are handled,
what happens if someone is late or absent, and
bullying and harassment procedures.
Policies help employees know what’s expected of them and how the employer deals with problems. They are usually found in handbooks or online. Policies are not always legally binding contracts but they can be very relevant in disputes.
How are policies used in employment disputes?
When a dispute goes to mediation, the Employment Relations Authority (ERA), or the Employment Court, judges look at what both sides did and said. Policies can be important to the process for a number of reasons.
If an employer claims someone broke a rule, the policy shows what the rule actually was.
For example if there’s a clear policy on theft or fraud, and an employee is accused of it, that policy helps define what counts as misconduct.
They show fairness. In New Zealand, employers must act in a way that is fair and reasonable. This includes giving employees a chance to respond to concerns, following a set process before disciplining or dismissing someone, and being consistent by treating simila r cases the same way. If the employer didn’t follow its own policy, that might look unfair. That can be a strong point for an employee.
They can help decide what was expected. Sometimes disputes turn on what an employee “should have known.” Clear policies help show that.
If there is no written policy, it may still be reasonable to expect an employee to follow obvious workplace rules, such as not stealing, but written policies make the expectations clearer.
How much difference do policies make in an employment dispute?
Policies vary in how strong they are legally. Some policies are referenced directly in the employment contract. For example:
“Employees must comply with the Code of Conduct, which is part of this agreement.”
When a policy is part of the contract, a failure to follow it can be a breach of contract. In that case, the policy is strong, and a Tribunal or Court will treat it as part of the legal agreement.
Many policies are separate documents that the employer can change from time to time. They still matter, but they may have less legal weight than something written into the employment agreement. If a policy is separate, the employer usually must tell employees when it changes, give employees a chance to ask questions, and apply it fairly. If they don’t, the policy might not help them in a dispute.
Even if a policy exists in a contract or as a standalone document, it can’t override employment law. If a policy tries to allow something less than what the law requires, the legal rule wins and the policy does not apply.
Does it matter if an employee knows or agrees to a policy?
Yes, this matters a lot. Communication of a policy, and any changes to it, is key. If an employer says a policy exists but never gives it to staff or tells them about it, it’s harder to enforce. A policy needs to be written clearly, given to every employee affected, and explained, especially if it’s complicated or new. Just putting it on a website without telling employees is usually not enough.
There are a few different ways an employee might “agree” to a policy.
Signed acknowledgment where the employee signs a form saying they’ve read and understood the policy. This is strong evidence in a dispute.
Incorporation by reference, where the employment agreement refers to the policy and says the employee must follow it. This also gives the policy legal weight.
Training or induction. Even without a signature, consistent training and discussion can show that employees were aware of the policy.
If none of these happen, a tribunal might decide the employee didn’t really know the policy existed. That makes it harder for the employer to rely on it.
What happens if a policy changes?
Employers often update policies. When that happens, they must tell employees about the change, explain what’s different, and give reasonable time for employees to understand the new policy. If an employer surprises an employee with a new rule and enforces it immediately, that could be unfair. For example, if a company suddenly adds a strict social media rule without notice and fires someone for a post the next day, that may be seen as unreasonable.
What do judges and tribunals look at in an employment dispute?
In a dispute, Judges and the ERA often ask:
Was the policy clear?
Was the employee told about it?
Was the policy included in the employment agreement?
Did the employer follow its own policy?
Was the policy applied consistently?
Did the employer act fairly overall?
If the policy was clear, communicated, and properly followed, it can strengthen the employer’s position.
What do I need to know about complying with company policies?
Some good practices for employees regarding company policies include:
Read your employment agreement and ensure you understand it.
Ask for copies of policies referred to in the contract if you are not provided with them.
Ask questions if something isn’t clear in the contract or in a policy.
Keep your own copies of policies you sign.
If policies change, make sure you understand the change.
Knowing your rights and your company’s rules helps protect you should there be a dispute.
To follow are some examples of what a breach of policy might look like at work.
Example 1: Misconduct and a Code of Conduct
Sarah’s company has a clear Code of Conduct in her employment agreement. It sets out what behaviour is expected. Sarah breaches the Code. Because the policy was part of her contract and she signed it, the employer has clear grounds to take disciplinary action.
Lesson: Policies tied to the employment agreement give employers stronger legal footing.
Example 2: A Discipline Policy Nobody Knew About
John’s workplace has a Disciplinary Policy, but it was never shared with staff and not in employment agreements. John is dismissed for a minor issue without following the steps in that policy.
At the ERA, John argues he never knew the policy existed and the employer didn’t follow it. The ERA finds the employer acted unfairly and orders compensation.
Lesson: Keep a record of new or changed policies you are made aware of in case a dispute arises.
Example 3: A Policy Changed Without Notice
The employer adds a social media policy without telling staff. Two days later, Emma is dismissed for a Facebook post that allegedly breaches the new policy.
The ERA finds the new policy was not fairly introduced and the dismissal was unjustified.
Lesson: Changing rules without notice and fair process can lead to legal trouble.
FAQs
Do employment policies have to be in the employment contract to matter?
Not always. Policies can still matter if they are properly communicated and applied. But if a policy is part of the contract, it usually carries more legal weight.
What if an employee never signed a policy?
A signature helps prove they knew about it. But even without a signature, evidence of training, communication, or consistent enforcement can show the employee was aware.
Can a policy override employment law?
No. Policies must follow the law. If a policy contradicts a legal right (like minimum notice), the law wins.
What happens if an employer ignores its own policy?
That can make the employer look unfair. The ERA or Court might find the employer didn’t act reasonably, even if the employee did something wrong.
Are unwritten policies relevant?
Yes, but they are weaker. Written policies are much easier to rely on. Unwritten practices can still count if they are consistent and known.
Company policies are not just paperwork. They can be powerful tools that help both employers and employees understand what’s expected at work. But to work well policies must be clear, employees must be told about them, and employers must follow them fairly. When everyone understands the rules, disputes are easier to resolve, and outcomes are fairer. If you are in a dispute at work, and wondering how policies may apply to you and your case, get in touch for a free consultation today. MathewsWalker.co.nz | 0800 612 355
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
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