10 July 2015 #Employment
If you have been one of the many commuters stuck this week because of the rail and tube strikes, you may be heartened to learn that in a recent case, the Court of Appeal took a robust approach on the issue of how much pay an employer can withhold from a salaried worker.
The case arose from the education section where three striking teachers alleged that their employer had withheld more pay than it was entitled to in response to a day's strike (Hartley v King Edward VI College,)
The teachers argued that the correct was 1/365th of annual salary, relying on the Apportionment Act, rather than 1/260th, as deducted by the employer. The Court of Appeal has upheld the employer’s approach, finding that the sum to be deducted should be calculated on the basis of contractual terms and that although the Act applied, on the facts it did not necessarily require the principle of equal daily accrual of salary to be applied.
Interestingly, the Court noted that although the difference in the amount of deduction between the two approaches was not much in individual terms, across the whole education sector the approach argued for by the teachers would cost the employers an additional £300,000 per strike day.
The amount of deduction will depend on the particular contractual circumstances of the case. In some sectors, the amount of the deduction is spelt out clearly in the contract in respect of unauthorised absence , which would cover unauthorised absence through industrial action.
Practical tips for calculating remuneration in strikes
There are a number of points for employers and employees to consider. First is the issue of whether the employer has accepted or rejected part-performance. An employer can send an employee home and deduct pay even where the employee has come into work but is taking part in industrial action short of a strike, for example where there is a work to rule. Secondly, the parties should look to the contract to see whether a daily rate of pay can be ascertained from its terms. Paid holidays should not normally be used to increase this proportion.
The parties should also consider if there are any other relevant factors such as the proportion of a month’s or year’s pay which is paid to temporary workers doing the same job, or how much workers are paid for additional work done. If the contract does not give any indication as to how pay accrues, there is a good chance that it will accrue on a daily rate of 1/365th under the Apportionment Act.