Why Your Australian Small Business Needs an Employee Handbook


12 Jul, 2021

As soon as you hire your first team member, you need to consider having an employee handbook that includes all of the relevant workplace policies and procedures for your business.

Employee policies often go by a range of different names – employee handbook, employee manual, policies and procedures manual, and staff handbook are just a few of them.

Whatever you call it, your employee handbook is where you document “how you do things around here” and set out the expectations, mutual obligations and consequences for actions in a workplace.

An employee handbook is an essential tool for any small business operating in Australia for several reasons.

It creates clear expectations

One of the primary reasons why small businesses need an employee handbook is to communicate their expectations to their employees.

A well-written employee handbook outlines the company’s policies, procedures, and guidelines for employee behaviour, performance expectations, and company culture.

It provides clear guidance on the company’s policies and procedures on issues such as their Code of Conduct, workplace health and safety, harassment and discrimination, social media use, leave entitlements, and performance management.

It ensures that every manager and employee is aware of what is expected of them and can avoid confusion and misunderstandings.

It helps to ensure legal compliance

From the day your first team member walks in the door, you also inherit a whole pile of legal obligations you must comply with.

The Fair Work Act is the primary legislation that governs the employment relationship in Australia. It outlines the minimum employment standards, employers’ and employees’ rights and obligations, and dispute resolution provisions

The majority of these legal obligations require you to document your policy on certain areas, and to educate your team members on these obligations.

Having an employee handbook ensures that the business is compliant with all relevant employment laws, such as the Fair Work Act 2009 (Cth)  and other legislation relating to people management, such as workplace health and safety, anti-discrimination, and privacy.

This can include outlining leave entitlements, workplace health and safety, sexual harassment, bullying, racial vilification, anti-discrimination, privacy requirements, and other legal requirements. Failure to comply with these laws can result in legal and financial penalties.

It promotes consistency

An employee handbook ensures consistency in decision-making by providing a framework for managing workplace issues. This consistency can help build trust and respect between employees and management, contributing to a positive work environment.

It supports communication

An employee handbook, when implemented effectively, can be a useful communication tool, providing employees with information on the company’s mission, vision, and values. It can also introduce new employees to the company culture and guide them on how to succeed in their roles.

A well-written employee handbook is even more important when juggling a mix of remote and on-premise team members. It is easy for someone to fall through the cracks of being informed of policy changes such as closedowns, changes to cleaning or other COVID-19 protocols etc. By keeping your policies updated, you reduce communication gaps.

Improved employee engagement and retention

An employee handbook can contribute to improved employee engagement and retention by fostering a positive work environment.

Clear communication of policies and procedures can help employees feel more informed and empowered. Policies promoting employee well-being, such as flexible work arrangements, can also lead to higher job satisfaction and loyalty.

Assists recruitment and retention

Clear HR policies and procedures can help attract and retain employees by providing clear expectations and benefits. Small businesses with competitive HR policies may be more attractive to job seekers and experience lower turnover.

It also plays a crucial role in assisting new employee inductions.

Manager and supervisor education

New managers and supervisors also need education on how you require things to be handled. A clear policy and procedure manual helps your managers and supervisors know the actions they are meant to take in response to situations and the order in which they should undertake them.


Your time is precious. By writing down and sharing the information with your team members, you save repeating yourself or having employees rely on other employees’ memory to help them resolve a particular issue.

Protection Against Disputes and Claims

An employee handbook can protect the business against disputes and claims arising from employee behaviour or decisions.

For example, if an employee is dismissed, having a clear policy and procedure for termination in the handbook can help the business defend against an unfair dismissal claim.

It can be used as evidence in legal proceedings

An employee handbook can be used as evidence in legal proceedings to demonstrate that the company has policies and procedures in place to address issues such as harassment, discrimination, and workplace health and safety.

Overall, having an employee handbook in Australia is essential for any small business that wants to manage their workforce effectively, minimize legal risks, and build a positive and productive workplace culture.

Instant HR Policies & Procedures Manual

Need help with your HR?

The Instant HR Policies and Procedures Manual saves weeks of work in creating compliant human resources policies for your team.


HR Author and Lecturer with over 25 years' experience in human resources and workplace relations in Australia. Lead Author of Instant HR Policies & Procedures, NDIS Direct Employment HR Manual, and Employee Performance Reviews: Tips, Templates and Tactics.

About Us

We are an Australian human resources business specialising in small businesses and not for profits, based in Brisbane, Australia.


If you are an Employee and need HR Advice, call Fair Work Australia 13 13 94



Our Most Popular HR Product

Recent Posts

Related Posts