Striking, Pay Deductions, and Reasonable Orders: A Legal Analysis – by Alan Bogg and Michael Ford KC

Image by ISDiva from Pixabay

1. Introduction

As we contemplate a new round of strikes in the universities, some employers have already implemented harsh and punitive reductions in pay for action short of a strike (ASOS). This may arise out of the employer’s refusal of part performance, often known as an employer ‘lock out’. It is redolent of some of the protracted and bitter industrial disputes of the 19th century, yet the option is alive and well in the boardrooms of some UK universities. In the most egregious cases, we are seeing punitive “double deductions”. This describes a situation where there is a deduction for the initial ASOS and then a deduction for the subsequent refusal to make up the work that was missed.

This provides an opportunity to reflect upon the current state of English law as it relates to striking workers and pay, following on from the earlier contribution of Professor David Mead to this Blog. Deductions from wages for taking strike action are governed by the common law, and no straight thing for workers ever grew out of that particular thicket. In the earliest of the modern cases, Sim v Rotherham MBC [1986] ICR 899 a stellar assembly of counsel – Eldred Tabachnick QC, David (later Lord) Donaldson QC, James Goudie QC, and up-and-coming youngsters Patrick Elias and David Pannick – grappled with some of the fundamental questions. Teachers were asked to cover for absent colleagues on work days; on the instructions of their union, they refused to do so.

Could the employer deduct a sum from their wages in respect of the non-performance of that duty? For the employees, it was argued that the teachers had substantially performed their duties and so were entitled to payment of their wages. If the employer could claim damages for any loss, still it had no right to make prior deduction from salaries, for then it was acting as ‘judge and jury’ and deciding itself if there was a breach of contract and what its loss was. Scott J, later involved in some of the notorious miners’ strike cases, held that the employees were in breach of contract; the employer was therefore entitled to damages for losses caused by that breach; and it could use the doctrine of ‘equitable set off’ to take an advance payment on account, as it were, from salaries.

2. Full strikes

If the law had followed the path of Sim, all sorts of subsidiary issues would have arisen. What if an employer, for example, suffers no proven financial damage as a result of the industrial action? But the law soon diverged on another path. In Miles v Wakefield [1987] 1 AC 539 a registrar of births, deaths and marriages, on the instructions of his union, refused to conduct weddings on Saturdays, but said he would do all his other duties. His employer, the council, said if he did not do all his duties on Saturdays, he needn’t attend work and, if he did, he wouldn’t be paid for work that day. They deducted 3/37 from his pay, representing the three hours’ work he was meant to do each Saturday, from his normal 37-hour week.

The case eventually reached the House of Lords, where the employee’s case was argued by one of the great advocates of the 20th century, Stephen Sedley. Echoing the analysis in Sim, he argued that the employer could accept the employee’s breach in not working and terminate the contract (that is, dismiss him); but if it didn’t, it was only entitled to damages for any financial losses to it, which it could not show it had incurred.

Undeterred by the contract principles underpinning this submission, the House of Lords opted for a rather simpler analysis to permit deductions. Dismissing the 50-odd cases cited as ‘ancient and irrelevant’, Lord Templeman went back to basics. ‘It cannot be right’ (always the sign of a weak argument), he said, ‘that an employer should be compelled to pay something for nothing…In a contract of employment wages and work go together…If the worker declines to work, the employer need not pay’. A worker who declined to work “efficiently with the object of harming his employer” was in the same position as one on an all-out strike and forfeited his right to any wages. But he was entitled to a quantum meruit for the reduced work performed and accepted. Lord Oliver found the problem more difficult, but ultimately reached the same result by a slightly different route. An employee who wasn’t ready and willing to serve on a particular day couldn’t sue for wages payable for that particular day. He accepted the arguments by Mr Irvine QC, later Lord Chancellor, who had argued that wages accrued from day to day under the Apportionment Act 1870 so that no pay was due for the Saturday. All the other Lords agreed.

Miles established the basic principle on deductions for strikes, even if the two main speeches do not speak with one voice. It is a decision of the highest court. Unless and until it is reversed by the Supreme Court, it means that an employee who is on full strike for a day isn’t entitled to any payment in respect of that day. At least where work is performed at times other than weekdays, as is the case with teachers and academics, the deduction is 1/365 of salary for each day of strike in accordance with the Apportionment Act: see Hartley v King Edward VI College [2017] ICR 774. None of this is legally contentious. Nothing in Hartley or Miles suggests that an employer can only deduct wages where it has an express right to do so, or that the issue is who is ‘at fault’; if employees don’t work on a day because of industrial action, they aren’t entitled to be paid for it. Nor would any of this be controversial under the international labour standards of the International Labour Organisation.

Even in a situation where an employee’s withdrawal of labour is in response to an employer’s repudiatory breach (for example, an ongoing breach of health and safety law), we think the most that can be argued within the limits of the common law is that the contract of employment might be suspended, along the lines envisaged by the majority in Morgan v Fry [1968] 2 QB 710. Although the suspensory doctrine was not adopted in later cases, was described as “embryonic” by the EAT which rejected it in Simmons v Hoover [1977] ICR 61 and was not pursued by the Donovan Commission, we think there is a good case for revisiting it in the light of human rights arguments. But that analysis is for another day and even if the contract were in suspense, we do not see how the duty to pay wages could remain alive.

3. Part performance – action short of a strike

But what about industrial action where the employee does some contractual duties but not others on a particular day – in the past called ‘working to rule’ but now referred to as ‘working to contract’ or ‘ASOS’? What deductions, if any, can be made? This is where the legal waters get very murky indeed. The analysis depends on whether the employer rejects or accepts the partial performance, itself often a difficult factual distinction to draw.

Where the employer makes clear it doesn’t accept partial performance, following Miles it appears that no payments are due to the employee. The logic is that the employee is then turning up voluntarily; she might as well stay at home. Communications from some employers in recent strikes have no doubt been drafted with this in mind, to make it appear that any work is voluntary. But the legal test will (or at least should) focus on substance not form. In Wiluzynski v Tower Hamlets [1989] ICR 493 estate officers refused to do one small element of their duties but otherwise worked normally. The employer wrote to them and told them if they attended work it would be in a purely voluntary capacity. The Court of Appeal considered that if the employer gave work or directions to the employees who attended work, this would negate any claim that the work was being performed in a purely voluntary capacity. For, in those circumstances, the employer’s conduct would be inconsistent with its apparent refusal to accept part performance. The question may therefore depend upon what in fact happens at the workplace, including via electronic communications. What has the employer said, for example, when asked by an employee: “do you want me to do my other duties today?”.

Where the employer ‘accepts’ partial performance, we think that the employer probably must pay the employee something for the day in question, though it isn’t clear exactly what. Orthodox contractual doctrine, echoing Sim, suggests the employer must pay wages, subject to being able to make set-off if the industrial action causes financial loss. Where it has incurred no financial loss, therefore, it must pay the full wages. In the context of the current UCU strike, in which universities haven’t lost income or profits, the analysis results in full pay for days of part performance. But two of the five Lords in Miles – Lord Templeman and Lord Brightman – rejected this analysis. They considered a worker taking action short of a strike couldn’t claim wages but could recover a quantum meruit for any work she in fact did on a particular day (a reasonable payment for services rendered quite apart from a contract and based in the law of unjust enrichment). Of the other three Lords, however, Lord Bridge doubted any entitlement to a quantum meruit and Lords Brandon and Oliver expressed no view on the point.

Since Miles the legal position has, if anything, become even more unclear. One County Court decision followed Lord Bridge’s analysis and denied a quantum meruit to a lecturer who didn’t do some of her duties while at work, implying that workers who take industrial action short of a strike aren’t legally entitled to any payment: see Spackman v London Metropolitan University [2007] IRLR 744. But a County Court judgment has no precedent value, and in Wiluzynski Fox LJ implied the opposite, stating that where the worker attended work, the employer couldn’t ‘give him directions to work and at the same time refuse to pay him’ (though he didn’t explain how much he should be paid). So thirty years after Miles we still have no clear common law authority on what pay, if any, is due to workers who aren’t performing all their duties in circumstances where the employer accepts partial performance. However, human rights norms may provide a way through this legal thicket. All of these cases were decided before the full recognition of the right to strike as a human right protected under Article 11. It is our contention that the common law must now be reconsidered in that light (see below).

4. Orders to do missed work on return

The ongoing dispute in our universities also highlights issues surrounding the employee’s implied obligation to obey lawful and reasonable instructions: Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698. What of a situation where a university lecturer returns to work and is instructed to undertake the teaching that she missed while striking? From a purely contractual perspective, the employer may argue that it is simply seeking to mitigate losses resulting from the striking employees’ breach of contract. Yet it is also easy to see, from the employee’s perspective, how this would appear as the imposition of a penalty on the striker. Not only has she lost her pay for the duration of her strike days. She is then required to undertake that same work on her return, alongside her other contractual duties, for no extra pay. ‘No work, no pay’ seems difficult to dispute. ‘Work and no pay’ is a trickier proposition.

In some contractual settings, where there are clearly delineated working hours and the employee is simply making up missed work within this fixed allotted period, there is a reasonable argument that this may not be punitive. In contexts like higher education, where working time is often far more diffuse, ‘unmeasured’, and difficult to demarcate, the employee is more likely to be pushed into working longer hours. And where striking employees are instructed to devote their time to strike mitigations, while non-striking employees continue to pursue academic writing, the social meaning of the employer’s instruction as punitive becomes even sharper. To what extent does the law reflect this?

The following analogy might be helpful. Consider a period of leave corresponding to a fundamental right, such as maternity leave or paid annual leave. An employer implements a policy that any worker exercising leave entitlement must ensure that missed work is made up on return, according to the instructions of the employer. We have no doubt that this would constitute a ‘detriment’ for taking leave. It would also have a significant deterrent effect on the practical exercise of the leave entitlement. . Striking is also a form of leave from work in the exercise of a fundamental right. There are differences, for sure. For example, maternity and annual leave must be facilitated and paid, whereas striking is quite properly not, and employers are entitled to oppose strikes. Yet in terms of sanctions and deterrents, these ‘leave in the exercise of fundamental rights’ scenarios are equivalent. Where an employer’s response to the exercise of a leave entitlement has deterrent effects, or may be experienced as punitive by the recipient, it will probably fall within the definition of a sanction under Article 11 in Karacay. In these circumstances, as we shall see, the contractual position may need to be modified to ensure compliance with Article 11.

These are big questions, but there is already authority for the view that an employee is entitled to refuse to obey an order that is unlawful: Gregory v Ford [1951] 1 All ER 121. Does this extend to the situation just outlined? Perhaps. Not every order is reasonable – see UCATT v Brain [1981] ICR 542 – and there is a basic unfairness in ordering an employee, without extra pay, to do the duty X in circumstances where it was non-performance of duty X that led to original deductions from pay. While much will depend as always on the wording of an individual’s contract, the requirement that orders are “reasonable” offers the potential for greater constraint on discretionary powers than the etiolated Wednesbury rationality.

5. The effect of international human rights norms

All the above cases were decided without reference to the European Convention on Human Rights (‘ECHR’) now given effect in the UK via the Human Rights Act 1998 (‘HRA’). The Strasbourg Court has recognised a right to strike is implicit in the right to freedom of association in Article 11: see RMT v United Kingdom (2015) 60 E.H.R.R 10. In determining the scope of Article 11, the Court will have regard to other norms in international human rights law, including those derived from the European Social Charter (‘ESC’) and the International Labour Organisation (‘ILO’): see the Grand Chamber in Demir v Turkey (2009) 48 E.H.R.R 54. It requires, too, that rights are practical and effective, not theoretical and illusory.

The ECtHR has been particularly anxious in its scrutiny of measures imposing penalties and disadvantages on individual strikers. A minor sanction – a disciplinary warning – imposed on a striking worker was held to breach Article 11 because it could dissuade union members from taking strike action: Karaçay v Turkey (Application No. 6615/03; 27 June 2007). In Dilek v Turkey (Application No. 26876/02; 30 January 2008) workers collecting money at road tolls left their posts for three hours as part of a strike, so that motorists drove through without paying. The Turkish government successfully sued them for the loss caused by the strike action and recovered sums ranging between 190 to 1070 Euros. In light of the importance of the freedom to take peaceful action, the European Court of Human Rights decided the damages claim was a disproportionate interference with Article 11.

None of this jurisprudence is likely to undermine the ruling in Miles, to the effect that a day’s pay can be deducted for each day of full strike. No principle of international labour law supports a contrary proposition. Under the ESC, for example, deductions from salaries must be ‘in proportion to the duration of the strike’ (CFE-CGC v France, Complaint No. 9/2000), and broadly the same conclusion has been reached by the ILO Committee on Freedom of Association. ‘No work, no pay’ on strike days is a simple correlative in every jurisdiction with which we are familiar.

But what about deducting a full day’s pay where an employee has performed some or most duties on a particular day? This appears inconsistent with the decisions of the expert bodies of the ESC and ILO, most clearly where the employer has not made clear by both words and conduct that it isn’t accepting any part performance. The disproportion between the wages lost and the duties foregone invites an analogy with Dilek. The tools are available to shape the common law to reach this conclusion, whether by holding that a quantum meruit is payable, that the deductions must be proportionate to the loss caused by the strike, or by directly adopting a general principle of proportionality or ‘fair exchange’ in determining the wages due for the work provided. In that light, the decision in Spackman, denying a right to payment to workers taking action short of a strike, is in our view wrong. This would also seem to preclude the imposition of a policy of blanket deduction (say, to pick a figure from the air, 20%). The requirement of proportionality necessitates a consideration of the individual striker’s particular situation.

These European cases have relevance, too, for an order to perform duties missed through strike action on return to work. In one of the leading treatises on labour law, Deakin and Morris, the authors’ raised the tantalising question of whether the employee’s duty of obedience is circumscribed by Convention rights under the Human Rights Act 1998, and they offer the example of a right to respect for private life under ECHR Article 8 (S Deakin and G Morris, Labour Law (Hart, 6th edition 2012) 360. What of the protected right to strike under Article 11? While the non-payment of wages in a strike would not constitute such an interference, there are certain aspects of the English common law – for example, that striking is a repudiatory breach of contract giving rise to an action for damages against the individual striker for breach of contract – that seem to us to raise serious issues of compatibility with the human right to strike under Article 11. Indeed, the Court of Appeal in Mercer v Alternative Future Group [2022] ICR 1034 has already indicated that the common law right to sue strikers for damages (NCB v Galley [1958] 2 WLR 16) is probably incompatible with the state’s positive duty to protect the right to strike enshrined in Article 11 (Bean LJ at para. 70). This would presumably encompass threats to sue for damages for breach of contract, which is the more common strategy in employer countermeasures against strike action.

We think that the instruction to returning strikers to perform (in effect) work for free also strays very close to the line of an impermissible interference with Article 11 rights, given the strict approach to sanctions against individual strikers under the ECtHR’s jurisprudence. Ex post facto sanctions for striking are caught by Article 11, even where they have no financial consequences: see Karaçay and Kaya and Seyhan v Turkey [2007] ECHR 1383/02. From the striker’s perspective, an order to (in effect) work for nothing effectively amounts to the imposition of a financial penalty or disciplinary sanction. It may also cover a situation in universities where returning strikers are instructed to mitigate the effects on teaching, whereas non-strikers continue to work on lucrative and highly prized grant applications or pursue publications in journals. The common law’s protection of fundamental rights may circumscribe the scope of the employee’s duty of obedience or inform the scope of what is a “reasonable” instruction, so that an order which infringes the right in Article 11 is therefore unlawful. For now, at least, the court as a public body is obliged under the HRA 1998 to refashion the common law principles that apply between the parties in the private law of contract and the right in Article 11 can be enforced directly against a public authority in a claim under s.6 of the HRA. Even if the HRA were to be repealed, or worse still a ‘Brexit’ from the ECHR, the fundamental right to freedom of association (which encompasses the right to strike) could, we think, still be protected under the general common law through its doctrine of fundamental rights.

For the present, the Court of Appeal decision in Mercer appears to rule out a statutory response, in the form of s. 146 and the statutory protection from detriment for trade union activities. In that case, the Court of Appeal declined to ‘read down’ the statutory detriment provisions so as to include participation in lawful strike action within its scope, even though it acknowledged that this could give rise to an incompatibility with Article 11 ECHR. The upshot is that s.146 does not protect against sanctions or other forms of detrimental treatment imposed on individuals who participate in union-organised industrial action.

6. End note

The existing common law decisions are not a model of clarity, save for the principle that there is no right to a day’s pay during each day of full strike. On the law of deductions particularly, some universities are seeking to exploit that uncertainty. The background themes of the English common law include judicial disapproval of striking workers, a reluctance to engage in analysing the merits of industrial action in pursuit of an elusive ‘neutrality’, and an unwillingness to depart from orthodox contractual doctrines in the context of strike law (save where the results of orthodox doctrine do not appear “right” – per Lord Templeman in Miles).

Still, there is a chink of light in the common law: the human right to strike under Article 11 may reshape the duties of the employment contract in some important ways. There are at least two means by which we consider it can and should. First, workers who engage in action short of a strike are entitled to be paid, and any deduction should be kept within strict limits that reflect the status of the right to strike as a human right. This would envisage proportionality between the work undertaken and the level of remuneration, something partly foreshadowed in the decision in Hartley. At the very least, where there is a manifest disproportion between deductions and ASOS, this should be a breach of contract or a wrong for which the common law will give a remedy. Second, orders to perform duties which were missed because of strike action may breach implied terms in the contract of employment or exceed the scope of what is a reasonable order. The threshold of what counts as ‘reasonable’ will be set by the Article 11 concept of a ‘sanction’ against individual strikers. In turn, this will depend upon the impact of such instructions within the context of particular contractual arrangements of work and time. The social effects of such instructions may be more deleterious where working time is more diffuse and ‘unmeasured’, as is often the case in academic employment.

Obviously, common law development is incremental. It must occur within the metes and bounds of existing authority. The constitutionally subordinate position of judges in a parliamentary democracy must be recognised and respected. Still, we regard it as high time for the most regressive elements of the English common law to be reshaped. The Article 11 jurisprudence could not be clearer. Any employer countermeasure against individual strikers with a punitive aim is an interference with the right to strike. The case for incremental development of the common law will be particularly strong where it involves strike action that is lawful under the existing battery of statutory conditions and restrictions under TULRCA. For now, at least, it seems like the courts are likely to be the only game in town for unions looking to develop the law so that it edges towards the basic floor of protection in Article 11.

About the authors

(Suggested citation: A Bogg and M Ford, ‘Striking, Pay Deductions, and Reasonable Orders: A Legal Analysis’, UK Labour Law Blog, 6 October 2022, available at https://uklabourlawblog.com/)