Unless the contract provides otherwise, the employer should make the deduction at the rate of 1/365 of annual pay for employees on annual contracts.
Teachers at the King Edwards VI College took strike action and their pay was docked by one day in accordance with their contracts. However, the College reduced their pay by 1/260th of their annual pay (not 1/365th) on the basis that they only worked 260 days per year (i.e. Monday to Friday). This meant the teachers were docked more pay as a result. The teachers argued that the College should only have deducted 1/365th of their annual pay under section 2 of the Apportionment Act 1870 (‘the Act’) as they routinely worked outside the normal working week. The County Court held the correct deduction was 1/260th and the Court of Appeal agreed.
The teachers appealed to the Supreme Court who found that the Act was applicable to the teachers' contracts. The principle of equal daily apportionment will apply unless the contract says it should not. In this case, there was nothing in the contracts which said that apportionment should be anything other than on a calendar day basis. The Court of Appeal's mistaken approach assumed that working days are limited to days on which directed duties (i.e. teaching rather than marking or lesson planning) are carried out. Whilst this decision is applicable to any employer whose staff do not work standard hours, education providers should pay attention and consider amending their contracts of employment to stipulate that the principle of equal daily apportionment will not apply.