Almost none of it is compulsory, and the exceptions are not the obvious ones
Every handbook template hands you thirty policies and never says which of them the law asks for. The honest answer is that one is required in writing, three have to exist because something else points at them, and the rest are optional. That does not make the optional ones worthless. One of them is the only defence you get.
The one that is compulsory, and its threshold
Section 2(3) of the Health and Safety at Work etc. Act 1974 requires every employer to prepare, and revise as appropriate, a written statement of its general health and safety policy, "except in such cases as may be prescribed". The prescribed case is the Employers' Health and Safety Policy Statements (Exception) Regulations 1975, which except any employer carrying on an undertaking in which "for the time being he employs less than five employees".
So five is the line. Note the wording: for the time being. It is today's headcount, not the headcount when you started, so the duty arrives the day the fifth person does and nobody sends a letter to say so. Below five, every other health and safety duty still applies in full. Only the obligation to write the policy down is lifted.
Three that have to exist because your contract points at them
Section 3 of the Employment Rights Act 1996 makes the written statement of employment particulars include a note specifying the disciplinary rules, the disciplinary and dismissal procedure, and the person to apply to about a disciplinary decision or a grievance, "or referring the worker to the provisions of a document specifying such rules which is reasonably accessible to the worker".
Which means you may keep them in the handbook rather than the contract. What you may not do is not have them, because the statement has to point somewhere. That is the whole reason those three sit in almost every handbook, and it is a different reason from the one people assume.
The policy nobody requires and everybody needs
Section 109(1) of the Equality Act 2010 treats anything done by an employee in the course of employment as also done by the employer. Section 109(3) adds that it makes no difference whether it was done with the employer's knowledge or approval. So the default position is that you are liable for what your staff do to each other, whether or not you knew.
Section 109(4) is the only exit. It is a defence to show that you took all reasonable steps to prevent it. That is what an equal opportunities and anti-harassment policy is actually for. No statute requires you to have one. It is simply the mechanism by which you are not liable.
And since October 2024 there are two standards, one word apart
Section 40A of the Equality Act 2010, inserted by the Worker Protection (Amendment of Equality Act 2010) Act 2023 and in force from 26 October 2024, says an employer "must take reasonable steps to prevent sexual harassment of employees of A in the course of their employment".
- Section 40A is a duty. "Reasonable steps". Owed all the time, whether or not anybody has been harassed.
- Section 109(4) is a defence. "All reasonable steps". Raised after the event, against a claim that already exists.
Two different tests in the same Act, separated by one word, aimed at two different moments. A handbook has to clear both, and clearing the first does not clear the second.
A policy nobody has read is evidence against you
This is the part that makes the whole exercise worth doing properly. "All reasonable steps" is not satisfied by owning a document. A handbook that was issued to nobody, trained on by nobody and enforced against nobody proves two things at once: that the policy existed, and that it was ignored. That is a worse evidential position than never having written it.
So issue it, get it acknowledged in writing, train on the harassment policy in particular because that is the one with the live positive duty attached, and act on what people tell you. The document is the cheapest part of it.
Keep it non-contractual
If the handbook forms part of the contract of employment, every policy in it is a contractual term and changing any of them is a variation requiring consent. You cannot then update the sickness reporting procedure without asking everybody to agree, and the law will keep changing whether they agree or not.
State on the first page that the handbook is not part of the contract, and keep the things you genuinely intend to bind, notice, pay, hours, restrictive covenants, in the written statement of employment particulars where they belong. This tool puts that statement in automatically, and warns you if you turn it off.
Common questions
Which staff policies are legally required?
In writing, one: the health and safety policy statement, and only once you employ five or more people. Section 2(3) of the Health and Safety at Work etc. Act 1974 requires a written statement of general policy, and the Employers' Health and Safety Policy Statements (Exception) Regulations 1975 except any employer who "for the time being employs less than five employees". Disciplinary rules, the disciplinary procedure and the grievance procedure have to exist because section 3 of the Employment Rights Act 1996 makes the written statement of particulars point at them, but they can live in the handbook rather than the statement. Everything else is optional.
Do I need an equal opportunities policy?
No statute requires one, and it is probably the most valuable page in the handbook anyway. Section 109(1) of the Equality Act 2010 treats anything an employee does in the course of employment as also done by the employer, and section 109(3) says it makes no difference whether you knew about it or approved of it. Section 109(4) gives you one way out: it is a defence to show you took all reasonable steps to prevent it. The policy is what "all reasonable steps" is made of. It is not a requirement, it is the difference between being liable for what your staff do to each other and not being liable.
What changed about sexual harassment in October 2024?
Section 40A was inserted into the Equality Act 2010 by the Worker Protection (Amendment of Equality Act 2010) Act 2023 and came into force on 26 October 2024. It says an employer must take reasonable steps to prevent sexual harassment of its employees in the course of their employment. It is a positive duty owed all the time, not a defence raised after something has happened, and it applies whether or not anybody has actually been harassed.
Is "reasonable steps" the same as "all reasonable steps"?
No, and the difference is one word in the same Act. Section 40A imposes a duty to take reasonable steps. Section 109(4) provides a defence if you took all reasonable steps. The duty is the lower bar and is owed continuously; the defence is the higher bar and is only relevant once a claim exists. A handbook has to clear both, and satisfying the first does not automatically satisfy the second.
Should the handbook be contractual?
Almost always not. If the handbook is contractual, every policy in it is a term of the contract of employment and changing any of them is a variation that needs agreement. That means you cannot update the sickness reporting procedure without asking everybody. Most employers state expressly on the first page that the handbook is not part of the contract, and keep anything genuinely intended to bind, notice, pay, hours, restrictive covenants, in the written statement of particulars instead.
Does having a policy protect me?
Only if it was actually used. All reasonable steps is not satisfied by owning a document. A handbook that was issued to nobody, trained on by nobody and enforced against nobody proves that the policy existed and was ignored, which is a worse evidential position than never having written it down. Issue it, get it acknowledged, train on the harassment policy specifically, and act on what you are told.
I have four employees. Do I need any of this?
You are excepted from the written health and safety statement, and from nothing else. Every other health and safety duty applies in full, including the general duty in section 2(1) and the duty to assess risk. The written statement of employment particulars is a day one right for every worker regardless of headcount, and it has to point at your disciplinary and grievance procedures. And the exception is worded "for the time being", so it stops applying the day you take on a fifth person.
Does the handbook replace the employment contract?
No. The written statement of employment particulars under section 1 of the Employment Rights Act 1996 is a separate document with a closed list of required contents, and it is due on or before the first day of employment. The handbook is where the procedures live, and section 2 of that Act only lets four of the statutory particulars be delegated to another document: sickness and sick pay, other paid leave, pensions, and training entitlement, plus notice which may point at the law. The rest have to be in the statement itself.