Smith v Kent County Council

The Claimant was employed by the Defendant as a full time teacher from the 26^th April 2000. On the 14^th March 2002 she withdrew her labour by participating in a one-day strike in furtherance of a trade dispute. The Defendant deducted from her salary for that month £113 to reflect her absence, that sum being 1/195^th of her annual salary entitlement. She argues that this deduction was wrongly calculated and that they should only have deducted 1/365^th of her annual salary. The resolution of the issues set by this claim therefore require close consideration of her contract.

By a letter dated 30^th March 2000 the Defendant made an offer of employment as a teacher to the Claimant which she accepted by endorsing her consent on the 3^rd April 2000. The relevant terms of the contract so far as this dispute are concerned were that she was employed as a full time teacher being paid a salary on Point 7 of the common pay spine. Under the heading "Absence" the offer letter stated:

In the schedule to the offer letter under the heading "General" appear the following words:

The second of the three sources of the contract as set out in the excerpt from the schedule above, was commonly known as the Burgundy Book or, to give it its full title the "Conditions of Service for School Teachers in England and Wales/Revised Edition August 2000. This was a collective agreement made between the Local Government Association and a national employers’ organisation for school teachers on the one hand and the relevant trade unions on the other. The committee which produced it is described in the introduction as:

The evidence of G. Barry Fawcett, head of the relevant department of the NUT and lead negotiator for the unions, concerning this document is that it was first published in 1978, revised in 1975, and the current edition is that of August 2000. It constitutes therefore a national agreement between LEA’s and their unions which individual authorities are free to adopt and incorporate into the contracts which they offer to their teachers.

The provision relevant to this dispute is section 3 of the Burgundy Book headed "Appointment: Resignation: Retirement". At 3.2 under the heading "Deduction of Salary" appears the following:

The final section of the Burgundy Book is headed "Conditions of Employment" and states:

Certain key features of a teacher’s employment status are determined by statute. By virtue of s.2 of the School Teachers Pay and Conditions Act 1991 (the 1991 Act) the Secretary of State has the power after appropriate consultation to make Orders giving effect to the recommendations of a statutory review body relating to the "statutory conditions of employment" of teachers. That phrase is defined by the Act as:

In the exercise of that power the Secretary of State has made Orders from time to time. The current version is entitled "School Teachers’ Pay and Conditions Document 2001" which I will call the 2001 Order. This is accepted as being the relevant Order at the time of the Claimant’s strike action. It is a substantial document which deals in detail with the salary entitlement and determination for the various grades of teacher, from head teacher downwards. In part 12 the conditions of employment of teachers other than head teachers (that is to say those who include the Claimant) are considered. In a section under the heading "Working time" appear the following provisions:-

It is the inter-relationship of these provisions which give rise to the issues in this case. I am also told that other similar cases are affected by the same principles.

The parties at the outset of the hearing agreed that the issues to be determined in this case were as follows:

The Claimant contends that the words "your terms and conditions of employment will be in accordance with the [Burgundy Book]" could not be clearer or more precise. It is not disputed between the parties that it is possible to incorporate within a contract, itself a legally enforceable relationship, a collective agreement to which the contractual parties are strangers, even one which is itself an unenforceable agreement – see Marley v Forward Trust Group Ltd [1996] ICR 891 at 896A-B. The Defendants respond that clause 3.2 is not itself mentioned either in the letter or the schedule to it, albeit in the schedule there is found a section dealing with "absence" which they say is a comprehensive code covering all absences from work.

The Claimants in their turn point to the first two bullet points which are said to be features of the Burgundy Book "directly affecting your terms and conditions" which are themselves the heading given to section 3 in which clause 3.2 finds itself. The Defendant describes this as a selection of topics none of which is apt to include the question of what deductions of salary to be made for absences. These indicators say the Defendant all point away from the incorporation of clause 3.2 in the contract.

The point at issue is not one capable of great elaboration. I agree with the submissions of Miss Booth QC on the Claimant’s behalf that the clear terms of the schedule quoted in paragraph 3 above must mean what they say, and the six bullet points are set out in order to highlight or underline certain areas of the agreement of particular relevance to this employee. These areas would include clause 3.2. If it was intended not to include it in the Claimant’s terms and conditions then there should be clear exclusionary words and there are none. I am therefore satisfied that clause 3.2 was in fact incorporated into the Claimant’s contract.

Before turning to the second and third issues it is perhaps helpful and necessary to look at the consequences in terms of remuneration of employees taking strike action and the approach that courts have taken to those consequences in the past.

Both parties agree that in going on strike the Claimant acted in breach of her contract of employment. She broke the requirement of clause 59.3 of the 2001 Code which obliged her to be available for work for 195 days per annum, that is to say the school terms. The Defendant did not choose to categorise her breach as repudiatory such as to entitle it to bring the contract to an end but continued with the contract. The question posed therefore is what powers did each party have as a result of her breach of contract?

In Sim v Rotherham Metropolitan Borough Council [1986] ICR 897 Scott J considered the cases of four teachers who had followed the instructions of their union not to provide cover for absent teachers but who otherwise carried out their normal duties. In each of the cases the relevant employer had deducted a small sum based on the percentage of the monthly salary. In none of the contracts was there any provision requiring the teacher concerned to provide cover for those who were absent, but the evidence was that the system operated as a matter of good will. The learned Judge notwithstanding the silence of the contract felt able to import a contractual duty to discharge the professional obligations of teachers which included the provision of cover. On the question of importance to this case, namely the position that the employers found themselves in, the Claimants had contended that the only remedy available to the employer was to pay their salaries in full and bring an action for damages. The learned Judge rejected this argument saying at 942H:

In the House of Lords the case of Miles v Wakefield Metropolitan District Council [1987] ICR 368 confronted the problem of a superintendent registrar, whose normal 37 hour working week included three hours on a Saturday morning when he conducted civil weddings, and who was in dispute with his employer. Though his exact status was complicated he was treated by their Lordships as if an employee for the purposes of this issue. What the Plaintiff had done was to report to his office on Saturdays to do other work but he refused to carry out weddings. The employer therefore deducted 3/37^th from his salary as representing the "missing" Saturdays’ work. All of their Lordships were of agreement that the employer was entitled without terminating the contract and without relying on any right to damages for breach of contract to withhold either a whole or a proportion of part of the week’s salary as appropriate. Lord Templeman said at 390G:

Two of their Lordships Lord Brightman and Lord Templeman thought that a worker who was "going slow", namely reporting for work but not performing the full range of his contractual duties, would be entitled to be paid on a quantum meruit basis for the amount and value of the reduced work actually done. The majority of their Lordships were not prepared to decide that question whose resolution was not necessary in order to dispose of the case. Therefore following Miles although the employers’ entitlement to deduct was clear there were still unresolved questions as to what he could and could not deduct where action short of a strike had taken place.

Although Mr. Andrew Clarke QC for the Defendant was at pains to divide the second and third issues the arguments in support of his position on each are at least versions of the same proposition, so far as I can judge. He argues that the statutory regime is paramount in so far as it deals with statutory conditions of employment as defined by the 1991 Act, that is to say:

For the Claimant Miss Booth QC points out that clause 59.3 sets out a minimum requirement, as indeed does 59.4; it is plain from 59.8 that the hours can exceed the core requirement of 1265 and there is no theoretical limit to them. This also, she argues, necessarily means that the number of days can increase from 195. This proposition gains some support from paragraphs 12 and 13 of the supplementary witness statement of Barry Fawcett the NUT official with responsibility for this area of teachers’ contracts in which he says that studies undertaken have suggested that the working week of teachers, at least during term time is commonly between 50 or 60 hours with 70 plus hours being unexceptional for some teachers. Also, he says, a significant part of what might appear to be the "school holidays" are spent on a wide range of professional activities including planning, preparation of teaching, updating of records, updating of knowledge and research. Some of these, as Mr. Clarke QC has pointed out, are work which attracts additional payment. But a lot of them do not.

Therefore, argues the Claimant, it is entirely understandable that the parties have chosen to define the employers’ entitlement to deduct in a way which would resolve some of the issues which have troubled those considering this kind of question. To do this is to do no violence to the core provisions as to remuneration contained in the statutory code. What has been achieved in the Burgundy Book is a compromise solution acceptable to employers and employees. Were it not to be part of the contract obvious arguments would take place between employers and employees as to whether the "bare" 195 days, as here, would be the right measure to quantify the entitlement to deduct or whether some additional and if so what allowance should be made for extra duties to reach the figure giving the true value of a teacher’s working day lost by strike action.

The question is not a straightforward one and the arguments for the Defendant are powerful and coherently deployed. But in my judgment the Claimant’s argument prevails. The existence of clause 3.2 cannot be considered to be in conflict with any feature of the statutory scheme. There are many aspects of remuneration which the statutory scheme, for understandable reasons, ignores and on which it is silent. It does not purport to deal with such important matters as sick pay, maternity leave, authorised absence from work and the like. All these are dealt with outside the statutory scheme but are incidents of the employment relationship which most people would consider as being a vital component of the "remuneration" of a teacher. The same argument in my judgment applies to clause 3.2 of the Burgundy Book

In the light of my findings and conclusions above the Claimant is therefore entitled to a declaration that the maximum lawful deduction from her salary in respect of her absence from work on 14^th March 2002 is 1/365^th of her annual salary at the relevant date.