What are incorporated terms and are they legally binding?
If one document is referred to in another it is incorporated, which means it forms part of the other document. Thus a reference to a company policy, collective agreement or employee handbook will incorporate that document into the contract or the offer letter, provided the wording makes this clear. Incorporated terms are express terms so it is very important to be clear in the contract exactly what is incorporated. If, for example, the contract refers to a company handbook, a tribunal may view the entire handbook as contractual. It would therefore be sensible to indicate in the handbook exactly which parts are incorporated into the contract of employment and which are not. Although collective agreements are not usually legally binding, the terms they contain can become legally binding as between the employer and the employee if the agreement is incorporated into the contract of employment. It is important to make sure that the wording of an incorporated document does not conflict with the contract, as this could lead to a dispute.