Labour & European Law Review Weekly Issue 527 05 July 2017
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 Supreme Court held that, as section 2 of the Apportionment Act deems that payments accrue at an equal rate day by day, employers must calculate strike pay on a daily basis over 365 days unless the contract says something different.
The claimants’ union, the NASUWT, instructed Thompsons to act on their behalf.
After going on strike for a day, the College deducted a day’s pay from the wages of three 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 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, which says that payments should accrue at an equal rate day by day. 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 whatever additional hours were 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.
Decisions of County Court and Court of Appeal
However, before the case came to trial, the High Court decided in Amey v Peter Symonds College that the appropriate deduction was 1/260, binding the County Court. The teachers therefore compromised the case in the County court and appealed to the Court of Appeal.
Although the Court of Appeal agreed that the Apportionment Act applied to the teachers, the legislation did not stipulate the rate at which, or the manner in which, salary accrues daily. Instead, it 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.
It thought this should be 1/195 (195 being the number of days of directed time), but as some work done in undirected time was not necessarily linked to directed time, the judge accepted that the college’s approach of relating the work to the total number of annual working days was a sensible and acceptable principle.
Supreme Court decision
The Supreme Court agreed that the Apportionment Act applied to the teachers’ contracts but held that, as section 2 clearly deems that payments are to accrue day by day at an equal rate, annual contracts have to be apportioned on a daily basis over 365 days, yielding a daily figure of 1/365.
Given the wide range of responsibilities of teachers, much of their work was done in undirected time outside of the normal college day during evenings, weekends and days of annual leave. Although there was a relationship between directed work and undirected work, much of the undirected work was important in its own right and was not necessarily directly linked to the directed time in the sense that a failure to work for the day would lead to a proportionate reduction in the undirected work done.
As section 2 of the Act deems that their salaries should accrue at an equal daily rate and as there was nothing in the teachers’ contracts which said anything different, the college was only entitled to make deductions from the teachers’ pay at a rate of 1/365 of their annual salary.
While the value of the individual claims is modest, the principle is an important one. The additional costs of a national day of strike action, for the sixth form college sector, is estimated to be in the region of £300,000.
The judgment is potentially relevant to any employee whose contract does not specify the maximum number of hours the employee can be required to work, particularly if the nature of the role requires the employee to carry out some contractual duties outside standard working hours.