Apportioning pay

Employers are entitled to withhold payment when their employees go on strike, but how should it be calculated? In Hartley and ors v King Edward VI College, the Court of Appeal held that the starting point for working out how much of the salary is referable to a particular day must be the terms of the contract, not the Apportionment Act.

Basic facts

After going on strike for a day, the College deducted a day’s pay from the wages of the three claimant sixth form college teachers which it calculated as 1/260 of their annual salary. This was based on the premise that they worked Monday to Friday, 52 weeks of the year bringing the total to 260 working days per year.

The teachers accepted that they were not entitled to be paid for the strike day, but argued that, as their obligations under their employment contracts were not limited to fixed hours, the College should have applied section 2 of the Apportionment Act 1870 to calculate the proportion to be deducted on a daily basis. Had it done so, it would only have deducted 1/365 of their annual salary.

Central to the calculation was the distinction in the teachers’ contracts between time which is directed (when teachers have to be at school) and time which is undirected (when teachers work in their own time preparing lessons, marking papers and so forth). The teachers’ contracts said, in relation to undirected time, that they must work such additional hours as may be needed to enable them to discharge their duties effectively. The teachers regularly worked in the evenings, at weekends and during the holidays, in order to carry out their contractual duties.

County Court decision

The parties agreed that the decision in Amey v Peter Symonds College (in which the judge held that the appropriate deduction was 1/260) was binding on the County Court.

In these circumstances, the County Court claim was dismissed, subject to the teachers’ right to apply for permission to appeal to the Court of Appeal. Permission to appeal was granted.

Decision of Court of Appeal

The Court of Appeal agreed that the Apportionment Act applied to the teachers. However, according to the Court, this did not mean that the principle of equal daily accrual (i.e. assuming that their annual salary should be divided by 1/365) would apply as a default option, even if the contract was not clear exactly how the money should be deemed to have accrued. Provided it was plain from the terms of the contract that the principle of equal daily accrual was not intended to apply, that was enough to exclude it.

Holding that the Act did not have anything to say about the rate at which, or the manner in which, salary accrues daily, the Court decided that the starting point for working out how much of the salary is referable to a particular day must be the terms of the contract.

A natural interpretation of the contract in this case did not lead to the conclusion that pay accrued at an equal rate day by day, and the fact that teachers might carry out their work on any day of the year did not alter that conclusion. The Court was of the view that pay was tied to the measurable part of the teacher's work, because, if a part-time teacher voluntarily agreed to work an extra day, the amount paid was 1/195 of the annual salary. The College had not followed the logic that the pay referable to a strike day should be 1/195 of the annual salary but instead worked on the basis of the total number of annual working days, including days which are paid holidays. In other words, 1/260.

Nevertheless, the Court held that this was the correct approach and dismissed the appeal.