Action against individual employees

In this section we discuss the circumstances when an employer can treat an individual as taking part in industrial action and then examine the legal and practical implications of the following possible responses:

A warning must precede any responses made to individual employees. This may avert the action and will be a significant factor if an employee complains that an employer has acted unlawfully. The warning should be in written form wherever possible, either in the form of a personal letter or a general circular. This should clearly specify the nature of the authority's response.

What is industrial action?

There is no legal definition of industrial action. However, case law has established that:

• Industrial action must be concerted action against the employer's interests. It does not, therefore, usually cover action taken by an individual
• It must be taken in order to put pressure on the employer in an attempt to achieve some objective
• It will not necessarily involve a breach of contract. For instance, a ban on voluntary overtime has been held to constitute industrial action

When are employees taking part in industrial action?

As a basic guide, employees will probably be taking part in industrial action if they:

• Collectively withdraw their labour
• Refuse to undertake some of their duties
• Refuse to carry out reasonable instructions
• Take part in a sit-in, go-slow or work to rule
• Take part in picketing

Breach of contract

Strike action clearly constitutes a breach of contract. Industrial action short of a strike is less straightforward. This will commonly take the form of a refusal to perform full normal duties. Where these are expressly required by the contract, employees will clearly be in breach. However, the contractual position is less straightforward where such duties are implied into the contract rather than expressly included. In Sim v Rotherham Metropolitan Borough Council [1986] IRLR 391, the legality of pay deductions being made depended on whether covering for absent colleagues during school hours was a contractual duty. The court held in this case that the teachers were in breach of their contract. Subsequent to this case, the teacher's pay and conditions document now expressly provides that there is a duty to provide cover for absent colleagues. Other relevant case law is Cresswell and others v Board of Inland Revenue [1986] IRLR 190 and MacPherson v London Borough of Lambeth [1988] IRLR 470. In both these cases, the refusal of employees to operate new equipment was held to be a breach of their contracts. However, refusal to carry out genuinely voluntary duties will not be a breach of contract. For example, a blanket refusal to undertake voluntary overtime will not be a breach of contract. It may, however, amount to industrial action.

The contractual position regarding other forms of action, such as working to rule, 'go slows' or a general withdrawal of goodwill can also be unclear because there may appear to be no existing contractual term to be breached. However, the courts have been willing to view any intention to disrupt an employer's business as a breach of contract. In British Telecommunications plc v Ticehurst and Thompson [1992] IRLR 219, the Court of Appeal held that a withdrawal of goodwill was in breach of the implied term to serve the employer faithfully.

Suing for damages

Where an authority suffers loss as a result of industrial action in breach of contract it could sue each individual worker for damages. However, this course of action is not recommended. As well as the detrimental effect it would have on industrial relations, each worker can only be sued for the loss for which he or she was personally responsible, which could be very difficult to establish.

Pay deductions

Case law has established the following principles:

• An employee taking strike action has no entitlement to pay during the periods in which the action occurs

• An employee taking industrial action short of a strike in breach of their contract will:
  • have no entitlement to any pay if the authority decides to refuse to accept the partial performance of the contract
  • have an entitlement to reduced pay where the employer allows them to continue working

• Where pay deductions are made, these should at all times be reasonable (i.e. a reasonable reflection of the work lost/damages caused)
• Pay deductions made as a response to employees taking part in strike action or industrial action short of a strike are excluded from the unlawful deduction of wages provisions in the Employment Rights Act

Different rules will therefore apply in different circumstances. Generally, however, good practice will ensure that:

• employees are warned in advance of any pay deductions to be made
• employees covered by the industrial action are given the opportunity to disassociate themselves from the action before the deductions are implemented
• the amount and reason for the pay deduction is explained clearly
• pay deductions are made at the earliest opportunity

Deducting pay for strike action

Employees will not receive pay when they are on strike. This is a straightforward principle applied by all employers. Problems arise however in calculating an appropriate amount of money to deduct.

The question will be straightforward for hourly paid staff. They will simply not be paid for those hours during which they are taking part in strike action. It is more difficult for weekly paid or salaried staff. In these circumstances, an authority will need to deduct a proportion of their pay according to the proportion of their working week spent on strike.

The important principle is that the deduction should fairly represent the amount of time an employee spends on strike. In Smith and others v London Borough of Bexley (unreported), striking college lecturers argued that their pay should have been deducted on the basis of 1/365th of annual salary per day spent on strike. The county court however upheld the employer's deductions of 1/190th of annual salary. This latter sum was based on the fact that the lecturer's contractual obligation was to work 38 weeks (i.e. 190 days) per year.

Authorities may therefore make deductions for weekly paid or salaried staff on the basis of 1/5 of a week's pay per day spent on strike (for full-time employees). This is the equivalent of 1/260th of a year's pay. This was confirmed by the High Court in Cooper & others v The Isle of Wight College [2007] EWHC 2831. In relation to schoolteachers, paragraph 3.2 of Section 3 of the Burgundy Book provides that the pay deduction for a day of 'unauthorised absence (e.g. strikes)' should be 1/365th of annual salary. This was confirmed by the Court of Appeal in Smith v Kent County Council [2004] EWHC 412.

Refusal of partial performance

An employer is entitled to refuse to accept a partial performance of the contract of employment offered by employees. This means telling employees that they should only attend work when they are prepared to work in full compliance with their contracts. Until they do so they will have no entitlement to pay.

The extent of the breach is immaterial to an employer's entitlement in law to refuse partial performance, although it is an important industrial relations consideration. This was illustrated in the case of Wiluszynski v London Borough of Tower Hamlets [1989] IRLR 259 in which employees were instructed by their union to refuse to answer elected members' queries. This formed only a very small part of their duties. The authority warned those taking part that until they were prepared to work normally, any work carried out would be regarded as voluntary and they would not be paid. The Court of Appeal upheld the Council's action

In many cases, employees will, despite such instructions, continue to attend work and claim pay for the work they have carried out. It is, therefore, imperative that employers make their non-acceptance of partial performance clear to employees. Specifically, employees should be made fully aware that any work that is undertaken will be regarded as voluntary and not attract any pay. The courts have issued a warning to employers that they must be able to show that their position was genuine and that employees who continue to work could not have been confused or misled (for example, by being issued with work). The employer is not, however, required to send employees home or prevent them in some other way from performing any work if the employees insist on doing so.

Deducting pay for action short of a strike

In many instances an employer is likely to prefer to allow employees to continue to work during industrial action short of a strike, and instead make an appropriate deduction from their pay. The difficulty with this is the assessment of an appropriate deduction.

In principle, the deduction represents damages arising from the employee's breach of contract. The Court of Appeal in Sim v Rotherham Metropolitan Borough Council [1986] IRLR 391 applied the principle of 'equitable set-off' to pay deductions in these circumstances. In other words, the employee's breach of his or her contract gives the employer a claim in damages. Instead of having to take that claim separately to a county court, the employer can set it off against the employee's wages.

It is often difficult to make a pre-estimate of the damages caused by each individual employee's breach of contract. In practice, deductions are usually restricted to a proportion of pay that fairly recognises the fact that the employee is not performing their full contractual duties. Authorities who make a reasonable attempt to do this should withstand any legal challenge.

In Miles v Wakefield Metropolitan District Council [1987] IRLR 193, Mr Miles, who was a registrar of births, marriages and deaths, refused to perform marriage ceremonies on Saturday mornings as part of a programme of industrial action. He carried out his duties normally, including marriage ceremonies on other days of the week. The House of Lords held that the authority were entitled to withhold 3/37ths of his weekly pay as 3 of his 37 weekly hours were worked on a Saturday.

In Royle v Trafford Metropolitan Borough Council [1984] IRLR 184, a teacher refused, as part of a campaign of industrial action, to take classes different from those for which he had been previously responsible or to accept additional children into his classes. The High Court held that a proportionate deduction of 5/36ths of the teacher's salary was a reasonable estimate of the damages incurred. This was based on the number of children excluded by the teacher from the class. The Court noted that no replacement teacher had been employed to teach the children excluded from the class, and that the authority had not been required to meet any claim from parents for failure to educate their children.

When communicating their response to employees, authorities should ensure that it is made clear to employees that deductions are made in lieu of damages for their breach of contract. Under no circumstances should deductions be viewed or presented as a penalty for taking industrial action.

Disciplinary action

Under normal circumstances, a breach of contract on the part of an employee will result in disciplinary proceedings. However, such action is generally inappropriate in cases of industrial action and authorities are recommended against it. However, warnings about any misconduct arising from the industrial action should be given. Where an investigation is required, suspension under the disciplinary procedure may be appropriate.

Whether proceedings under the disciplinary procedure (investigation, hearings etc) should be postponed until the end of the industrial action will depend on what is reasonable in individual circumstances. It is clearly better for action to be taken as quickly as possible, but it may be difficult to do so if, for example, witnesses are unavailable because they are on strike.

Suspension

Formal suspension will not normally be appropriate in cases of industrial action. An authority will not wish to consider suspension on full pay, and suspension without pay will only be permissible where it is specifically allowed for in an employee's contract of employment. It is consequently advisable not to use the word 'suspension' in circumstances where the authority decides to refuse to accept work and sends people home.

Suspension under the disciplinary procedure may, however, be appropriate where industrial action has involved a separate disciplinary offence.

Dismissal

Although in general terms the dismissal of employees taking part in industrial action would not give rise to liability for unfair dismissal, employers must be careful of the provisions of TULR(C)A that provide individuals taking part in 'protected' action with some employment protection.

As strike action will almost inevitably constitute a repudiatory breach of contract, employers will be entitled in law to dismiss employees taking part without notice. Similar action can be taken where action short of a strike involves a fundamental breach of contract.

Before carrying out summary dismissals authorities are advised to issue warnings of their intentions as these could possibly bring about a return to work. The employer can dismiss summarily after such warnings, and employees would not be entitled to their notice periods. A dismissal for any type of industrial action can be accompanied by an offer of re-engagement on the terms that the employer specifies. These need not be those which previously applied.

However, notwithstanding the protection afforded by TURL(C)A, a decision to dismiss should be taken only as a last resort as it could have serious industrial relations implications, especially where the action is official.

Lock-outs

Where one particular group of workers is on strike, an employer may wish to shut down operations completely at the establishment or workplace concerned. A lockout occurs when an employer closes the place of employment or otherwise prevents employees from attending work.

Where there is no contractual provision to lay-off non-strikers in these circumstances, employers are likely to face claims for pay from those employees who were not taking part in the action (i.e. were ready and willing to work but were not able to do so).

Locked-out employees may also regard the employer's action as repudiatory conduct, allowing them to claim constructive dismissal. Dismissals during a lockout (whether constructive or whether an employer explicitly dismisses employees) are subject to the same rules as those that apply to dismissals during industrial action.

It is most unlikely that a lockout would be an appropriate course of action in local government, many of whose services are based on a statutory duty. Furthermore, because most contracts of local government staff will contain no layoff provisions, any attempt by an authority to lay-off staff will leave them liable to claims for damages for lost pay.