Supreme Court determines pay deduction rate for employees on strike

In Hartley v King Edward VI College, the Claimants were teachers who participated in a full day of lawful strike action. Their employment contracts permitted pay to be deducted for any days on lawful strikes but did not specify the calculation to be applied. The employer deducted 1/260 of their annual pay, basing the calculation on working days in a year rather than calendar days.

The Supreme Court (overturning the County Court and Court of Appeal) held that this approach was incorrect. As there was no express contractual term governing the rate of deductions to be made the Apportionment Act 1870 applied which provides that annual salaries accrue “from day to day and shall be apportionable in respect of time accordingly.”

The Supreme Court noted that the Claimants undertook both “directed duties” and undirected duties, which included planning lessons, marking and other administrative tasks. These undirected duties were frequently undertook during evenings, weekends and periods of annual leave. As their employment contracts did not pro-rata salary between directed and undirected duties, the Supreme Court held that (in the absence of a clause to the contrary), a deduction rate of 1/365 was appropriate.

Although Hartley only considered deductions for days on lawful strikes, it could have wider implications for other circumstances where an employer may deduct pay, including sabbatical leave and dependants’/compassionate leave. Employers should therefore review their employment contracts and ensure there is an express contractual provision governing these types of scenario.