10. Effect on terms and conditions and benefits

Continuity of employment/length of service

Going on strike will not result in a breach in an individual’s continuity of employment (section 216 Employment Rights Act 1996 (ERA)). Neither will being locked out from work break continuity. However, the period on strike (and any period locked out) will not add to an individual’s length of service.

Pay

Employers are generally entitled to deduct pay for any days when a worker is on strike, as a worker has no general right to be paid if s/he does not perform her/his contractual duties. The amount that can be deducted for each day’s pay may be specified in the employment contract, or a collective agreement. If so, it is calculated according to those terms. In some circumstances there may be specific provision for the rate of deduction during industrial action.

Smith v Kent County Council [2004] EWHC 412, involved a teacher, Abigail Smith. The issue was whether the rate of a day’s pay should be calculated according to the collective agreement (the Burgundy Book), which was incorporated into the teachers’ contracts, or the statutory provisions governing teachers pay. The local authority had deducted 1/195th of Smith’s annual pay for each day of strike action and the High Court ruled that the maximum deduction should have been only 1/365th in accordance with the Burgundy Book.

If there is no contractual term, it can be argued that the amount of a day’s pay should be based on the number of working days (rather than calendar days). This would be in line with the EAT’s decision in the case of Leisure Leagues UK Ltd v Maconnachie EAT/940/01 [2002] IRLR 600, (as confirmed by the case of Yarrow v Edwards Chartered Accountants EAT/0116/07), that this method of calculation is good industrial relations practice.

If the strike action is for less than a full day, or there is industrial action short of full strike (such as a boycott of some work), the employer may still be able to deduct a full day’s pay. It will depend partly on whether the employer has made it clear that they are allowing the employee to carry out only part of their duties. In the case of Wiluszynski v LB Tower Hamlets [1989] IRLR 259, the Court of Appeal held that the employer could deduct a full day’s pay even though the worker only refused to perform some of his duties. And in BT v Ticehurst and Thompson [1992] IRLR 219, the Court said the employer could send the workers home without pay when they refused to sign a statement saying that they would carry out their full duties, when industrial action was still ongoing.

However, in the case of Sim v Rotherham MBC [1987] IRLR 391, the High Court said that the employer was only allowed to deduct a part of Sim’s salary that fairly represented the part of the work she refused to do. In the case of Cooper and others v Isle of Wight College [2007] EWHC 2831 (QB), the High Court said that the amount of pay an employer can deduct can only be as much as the amount the employee could sue the employer for, if they had not been paid for that period.

Pay deductions because of industrial action are not protected under section 16 Employment Rights Act 1996 (ERA 96) and regardless of whether a deduction is “lawful”, a tribunal cannot rule on deductions from wages resulting from industrial action. However, it can make a finding of fact as to whether what has taken place amounted to industrial action, rather than just relying on an allegation by the employer that industrial action did occur (Gill v Ford Motor Co & others EAT/1006/03 ([2004] IRLR 840)).

Lock-outs

Employers may try to anticipate a dispute by locking out workers. A lock-out is defined in section 235(4) ERA 96 to include closures or suspensions by the employer with a view to forcing workers to accept specific terms or conditions.

Establishing when a lock-out has taken place can present difficulties, but it may be important where individuals are claiming unfair dismissal, as employees who have been locked out may have a slightly better chance of pursuing a claim successfully. The Employment Relations Act 2004 extends the period of protection from unfair dismissal to include any time when employees are locked out. So if a group of workers wants to return to work after being on strike for 12 weeks and their employer refuses to let them back, they will still have dismissal protection.

Also, locked out workers are treated in exactly the same way as strikers as far as state benefits are concerned.

State benefits for strikers

Although strikers are mostly excluded from claiming state benefits, they should be able to continue to receive Working Tax Credit and Child Tax Credit. For all other benefits, anyone taking industrial action loses entitlement to claim. This also applies to anyone laid off because of industrial action, unless it can be shown that they have no direct interest in the dispute at their place of work.

If, by custom and practice, any pay increase obtained by those on strike is given to those laid off, they too will be disqualified from benefits. The dependants of strikers or those laid off and disqualified have an entitlement to claim benefit. However, in calculating their “personal allowances” for the purpose of assessing entitlement to means-tested benefits (for example, Employment and Support Allowance), a deduction of £34.50 a week will be made (2009-10). This is supposed to represent the amount the striker would be receiving in union strike pay, but is deducted regardless of whether or not any strike pay is actually received.

Any strike pay over that amount is classed as income and taken fully into account when assessing entitlement. The dependants of non-union members who are on strike have the same amount deducted.