Supreme Court backs teachers in dispute over strike-related deductions from pay

The teachers had argued that the 1870 Apportionment Act limited deductions from their pay in respect of one day's strike action in November 2011 to 1/365 of their annual salaries. Their employer, King Edward VI School in Stourbridge, had deducted 1/260 as "the value of the service which the teachers had failed to provide on that day", discounting weekends and holidays and basing the calculation on the premise that their working days were Monday to Friday.

In a unanimous judgment, the Supreme Court ruled that the teachers' salaries were "entire indivisible payments" which accrued day by day over the course of the year at an equal rate. References to "directed" and "undirected" time in the teachers' contracts of employment were not sufficient to override this, according to the court.

The Supreme Court's judgment overturned that of the Court of Appeal, which had assumed in its approach that the teachers only worked during their "directed" teaching hours. The teachers were also required to perform other "undirected" work, including marking work, writing reports and preparing lessons. This often happened at weekends.

"As I see it, the difficulty with 1/260 is that, given that the work done by the teachers described above was not limited to work during week days, it makes no sense to choose a calculation of 1/260 of the annual salary, which assumes only week day working," said Lord Clark, giving the judgment of the Supreme Court.

"It might be said that the difficulty with the figure of 365 is that it cannot be justified arithmetically. However, this is where, as it seems to me, the statutory formula in the Act comes in. On the basis of the statutory formula ... the most sensible approach in order to apportion the annual salary on a day to day basis is by treating each day as 1/365 of the annual salary. As I see it, this achieves an overall approach which is broadly fair," he said.

The judge added that the deduction would have been different if the teachers had not been paid annually.

"If the contracts were not annual contracts the position would be very different and would depend upon the terms of the particular contract," he said.

The 1870 Apportionment Act provides that periodic payments, rents, annuities or dividends accrue on a daily basis. The section related to "annuities", which includes "salaries and pensions", states payments that can be apportioned should be deemed to have accrued "by equal daily increment". However, parties can contract out of the rule in certain circumstances by "express stipulation".

In the Court of Appeal in 2015, Lord Justice Elias held that the terms of the teachers' contracts were sufficient to amount to "express stipulation", as their undirected work was "subsidiary and directed towards the directed duties". The Supreme Court disagreed.

"The directed work is plainly important but it is only part of the teacher's responsibilities," said Lord Clark in his judgment. "The directed work is plainly important but it is only part of the teacher's responsibilities. While there is a relationship between the directed work and undirected work, much of the undirected work is very important in its own right and is carried out outside the hours of directed work … Moreover, the role of a teacher ... is a multi-faceted one."

Chris Keates of the teachers' trade union, NASUWT, described the judgment as a "landmark victory for teachers' rights across the UK".

Employment law expert Sue Gilchrist of Pinsent Masons, the law firm behind Out-Law.com said: "It’s worth checking contracts. This decision could impact on other types of employee where contractual terms are not clear and work is not restricted to working say five days per week. If that is the case, there is a risk the Apportionment Act may apply and the correct calculation, not just in terms of strike days but also potentially for payment on termination, could be 1/365 rather than 1/260."