When employees strike, their employer can withhold their pay for the days on which they take part in strike action. The question that arose in Hartley and others v King Edward VI College [2015] EWCA Civ 455 was how a day's pay should be calculated for the purpose of making a deduction from the pay of sixth form teachers who took part in strike action during one day in 2011.

Facts

Teachers are directed to work 195 days per year and to undertake work during undirected time. Three sixth form teachers at King Edward VI College (the College) took strike action on 30 November 2011.

The teachers' contracts did not set out explicitly the amount that could be withheld from their pay. The College calculated the deduction from their pay based on 1/260 of their annual salary, on the premise that the teachers' working days were Monday to Friday and that all work days should be included, even those not worked because of holidays. The five working days per week were multiplied by 52 to produce 260 working days per year.  

The teachers argued that only 1/365 of their annual salary should have been deducted. They relied on the Apportionment Act 1870, which they argued imposes the principle of equal daily accrual, requiring pay to be treated as accruing by equal amounts on each day of the year.  

The difference was relatively small as far as the individual teachers were concerned but was estimated to amount to £300,000 per strike day for the sector as a whole.

County Court decision

A judgment was entered by consent in the County Court since the parties agreed that the judgment in Amey v Peter Symonds College [2013] EWHC 2788, that 1/260 was the appropriate fraction on very similar facts, was binding on the County Court. The teachers appealed.

Court of Appeal decision

The Court of Appeal dismissed the appeal. It agreed that the Apportionment Act applies to contracts of employment, unless the employment is ‘infinitely divisible’, such as where there is a set hourly rate.  

However the Court went on to find that although pay accrues daily, it does not necessarily follow that it accrues at an even rate across each of the days within the period in question. There remains the need to determine the 'daily rate' that is applicable to the day in question, in the particular circumstances of the case. This involves looking at the terms of the contract between the parties.

The College was found to have adopted the correct approach, given the strong relationship between the teachers’ ‘directed hours’ and their pay. The directed hours by which the teachers’ pay was calculated focussed primarily on their time in attendance at the College teaching. This was supported by the fact that the teachers received additional pay at the rate of 1/195 of their annual salary for any additional days worked, based on their directed hours. The Court of Appeal recognised that, taken to its logical conclusion, there would be justification for a deduction on a directed hours basis of 1/195 of the teachers’ annual pay. The College had decided not to take such an approach but to focus on annual working days, which the Court agreed to establish a sensible and acceptable principle, which possibly erred in the teachers' favour.

Comment

For employees who are paid annually and not by reference to an hourly or daily rate, the calculation of a day’s pay focuses on the days an employee works. For an employee who works Monday to Friday this produces the same result as the statutory calculation of a week’s pay, as 5/260 x annual salary is the same as annual salary divided by the 52 weeks in a year. Payment in respect of additional days worked by employees that is calculated on the basis of 1/365 of annual salary could be unlawful and should be reviewed. The way on which pay withheld for days not worked by an employee is calculated should also be reviewed if the 1/260 approach has not been adopted in the past. The question of whether a different approach could be adopted in future will depend on the contractual status of the existing arrangements. Advice should be sought if changes to an established approach are contemplated.