• 28th June 2017

The Supreme Court has held that an employer was wrong to deduct 1/260 of an employee’s annual salary, rather than 1/365, when its employees went on strike. This was because the employees were employed on annual contracts and because it was accepted that the employees, who were teachers, regularly worked outside of their contracted hours, including weekends and holidays. Therefore, in the absence of an express provision in their contracts disapplying the statutory apportionment principle, the most sensible approach in apportioning the claimants’ annual salary on a day-to-day basis was by treating each day as 1/365 of annual salary.

The court made the point that a critical feature of the case was that the contracts in question were annual ones. Had they not been, the position would have been “very different”. (Hartley and others v King Edward VI College [2017 UKSC 39].)

Summary:

The judgement is clear that employment contracts can set out the days for which salary accumulate, and such a clause will override the default position. Such provisions are not uncommon in contracts in relation to holiday pay.