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Dispute Resolution Department’s case of the week

26/05/2017 | ACUMEN BUSINESS LAW
Hartley and others v King Edward VI College – the Supreme Court decided on Wednesday this week how to calculate the deduction from teachers’ salary for one day on strike.

The teachers employed by the college received an annual salary paid on a monthly basis.  Their contracts incorporated terms from a staff handbook known as the “Red Book” and provided that the teachers had to work 195 days a year of “directed” time which included teaching and other duties assigned to them, as well as an unspecified amount of “undirected” time which included marking, lesson planning, and writing reports.  The teachers regularly worked on “undirected” duties outside of normal working hours.  

The teachers went on strike for a day and the college was entitled to make a deduction from their salary for the strike day.  The college calculated this on the basis of 1/260 of their annual pay, with 260 being the number of weekdays in a calendar year.  The teachers brought a claim for breach of contract in the County Court, arguing that the deduction should be 1/365.  Their argument was based on section 2 of the Apportionment Act 1870 (the Act) which provided that all annuities are considered as accruing from day to day and shall be apportioned accordingly, and annuities are defined in the Act as including salaries.

Before trial, a case on similar facts with the same issue was decided in favour of the college in the High Court.  The teachers therefore agreed for final judgment to be entered in favour of the college and the teachers were given permission to appeal directly to the Court of Appeal  The Court of Appeal found that the Act did not necessarily provide for equal daily accrual but accrual in accordance with the contract.  The contract provided for 195 days of directed time but also an unspecified number of days of undirected time, and therefore the Court of Appeal found the college’s approach of using the total number of working days was a sensible and acceptable approach.

The teachers appealed to the Supreme Court which allowed their appeal.  The Supreme Court found that the Act deems that payments accrue at an equal rate.  The employment contract was an annual one, and the salary must therefore be apportioned on a daily basis over 365 days.  If the contract was not an annual one, the rate would be different.  Section 7 of the Act provides that the Act does not apply where it is expressly stipulated that no apportionment will take place.  There was nothing to this effect in the teachers’ contracts and therefore the deduction was to be calculated at 1/365 of their annual salary.

The decision from the Supreme Court is useful guidance for employers of the value of a day for which an employee is not entitled to be paid, for example if they take unpaid leave.  If employers do not want the salary to be apportioned over a year for an annual contract, they can stipulate differently in the contract and the exemption in Section 7 of the Act will mean that it does not apply to the contract.

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