Employers in regulated sectors in particular will be interested in this case, in which the Court of Appeal considered whether an NHS trust was, or would be, in breach of contract for failing to pay a doctor’s salary while he was the subject of an interim suspension order. The principles here will apply to sectors such as finance, education and the professions, as well as health care.

The trust had become concerned that the doctor had hastened patient deaths and started disciplinary proceedings. It also notified the police. The doctor was suspended on full pay. Subsequently, following a referral from the Crown Prosecution Service to the General Medical Council (GMC) the Interim Orders Tribunal (part of the GMC) suspended his registration to practise, and the trust stopped paying his salary. This was partly because an employee's contractual entitlement to pay is contingent on their being ready, willing and able to perform the work they are employed to undertake: and the interim order meant he was not able to work.

The Court of Appeal held that the trust was not entitled to withhold the doctor’s pay during his suspension:

  • the terms of his contract did not expressly permit the deduction of pay during an interim suspension
  • neither did the trust’s own contractual disciplinary policy
  • there was no basis to imply such a term into his contract
  • nor was there evidence of any custom and practice that a temporary suspension permitted the trust to deduct pay.

The doctor was ready, able and willing to work but the interim order removed his registration.

Lessons: where a contract does not address the issue of pay deduction during suspension, the default position should be that an interim suspension should not attract the deduction of pay. Only in exceptional circumstances, such as a complete or part admission of guilt, might an employer be able to justify such a deduction, and decisions to withhold pay should be considered with extreme care.