Deducting 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 they do not perform their contractual duties. The amount that can be deducted for each day’s pay may bespecified in the employment contract, or a collective agreement. If so, it is calculated according to those terms. In some cases, there may be specific provision for the rate of deduction during industrial action.

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 [2002] IRLR 600 (confirmed in 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 a full strike, such as a boycott of some work, the employer may still be able to deduct a full day’s pay, but 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 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 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 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 of the Employment Rights Act (ERA 96) (see Chapter 4: Deductions and underpayments) 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 ([2004] IRLR 840)).