The last two weeks have delivered bad news for trade unions and their supporters.
Firstly, on 14 May 2015 the Court of Appeal delivered its judgment in the case of Hartley and Others v Kind Edward VI College and held that when withholding a day's pay in consequence of strike action, the employer was right to deduct 1/260 of each striking employee's pay and not the lower amount of 1/365 as argued by the claimants.
Then on 27 May 2015 it was confirmed in the Queen's Speech that legislation would be put forward to 'reform trade unions and to protect essential public services against strikes'. The Department for Business Innovation and Skills has said that the proposed changes will require a turnout of at least 50% for ballots on industrial action and in core public services at least 40% of those eligible to vote must back strike action. The changes are (in the main) being proposed to prevent disruption to areas such as health, education, transport and fire services.
The Trade Union and Labour Relations (Consolidation) Act 1992 (the 1992 Act) provides complicated and precise procedures for dealing with industrial action including the steps required by unions to ballot members before any industrial action can take place. However, the rules only require a simple majority of those voting to authorise strike action. History has shown that the typical turnout for trade union ballots can fall well short of the proposed 50% level and according to reports in the media, the PCS Union has never achieved a 50% turnout in any of its ballots. Consequently strike action has been authorised by significantly less than 50% of those who were eligible to vote. When combined with the fact that trade union membership will rarely reflect 100% of any given workforce, the proportion of total employees required to authorise a lawful strike and, as a result, disrupt a business, is surprisingly low. The changes proposed in the Queen's Speech are likely to make strike action extremely difficult in core public services meaning that in effect there must be an 80% vote in favour of a strike before it could be authorised.
Employees are protected from dismissal for taking part in official industrial action ie action that is properly taken and is authorised by an appropriate ballot in accordance with the 1992 Act. However, an employee is not entitled to receive pay for those days on which they are on strike and an employer can choose two distinct routes to determine the amount to withhold; the first is a sum equal to the damages caused to the employer as a consequence of the industrial action; and the second is the amount of pay that would otherwise have been received by the employee on that day.
It is this second option that is easier to establish and is typically applied and was the subject of the most recent case
Hartley and Others v King Edward VI College
The claimants had taken part in strike action and accepted that as such they were not entitled to pay for the day on which they had withdrawn their services. However, they argued that the rate of pay that should be withheld should be based on the formula of 1/365 given that they received an annual salary and were required to work in their own time beyond their normal contractual hours in order to complete planning and marking etc. The claimant's relied on the application of the Apportionment Act 1870 in support of their case. In contrast the college argued that the formula should be 1/260 based on the number of days the employees were contracted to provide daily service.
The Apportionment Act 1870
This aged piece of legislation is likely to have affected most of us from time to time. It is under this legislation that ground rents, service charges and council tax are apportioned when property is bought and sold - without which the buyer would be liable to account for the whole pay period even though they were not in occupation for the whole time.
In Hartley, the claimant's argued that the apportionment act applied to the employment arena and further argued that there was an assumption in the wording of the legislation that the accrual would be at an equal daily increment unless otherwise expressly stated. The college simply argued that the apportionment act did not apply to these circumstances.
The court adopted a middle ground by determining that the apportionment act did apply but that there was no requirement that pay should accrue in equal daily increments preferring instead to conclude that amounts accrue on days when the employee was obliged, under the contract, to be available for work i.e. for 260 days per year. Accordingly, when determining the amount to withhold, the appropriate formula was 1/260 of the annual salary.
Whilst the value of the compensation each individual received in this case was small (about £40 per employee on a £35,000 salary) it was established that across the sector the cost would be around £300,000 per strike day. In times of austerity in the public sector, this represents a significant saving. However, with the proposed changes to strike rules coming before parliament in the next 12 months, we might expect that strikes will be fewer in number in years to come.