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Deducting pay
[ch 9: pages 265-266]Employers are generally entitled to deduct pay for any days when a worker is on strike, as there is no general right to be paid if a worker does not perform their contractual duties. The amount to be deducted for each day’s pay may be specified in the employment contract or a collective agreement:
In the case of 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 her 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.
Smith v Kent County Council [2004] EWHC 412
If there is no contract 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 [2002] IRLR 600 (confirmed in Yarrow v Edwards Chartered Accountants [2007] UKEAT 0116/07/0806), that this method of calculation is good industrial relations practice.
If the strike lasts less than a full day, or there is industrial action short of a full strike such as a boycott of some work, the employer may still be able to deduct a full day’s pay, although not necessarily. 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 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 workers home without pay when they refused to sign a statement agreeing to carry out their full duties, when industrial action was still ongoing.
However, in 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 work she refused to do. In 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 claim from the employer if they had not been paid for that period.
Pay deductions because of industrial action are not protected under section 16 of the Employment Rights Act (ERA 96) (see Chapter 4: Deductions and underpayments). However, a tribunal can make a finding of fact as to whether what has taken place amounted to industrial action, rather than just relying on an employer’s assertion that industrial action did occur (Gill v Ford Motor Co & others [2004] IRLR 840).