Cooper & Ors v The Isle of Wight College

Where an employee takes part in industrial action, the employer’s deduction from wages is limited to the wages for the work not performed. The court should identify what the employee could have sued for under the contract, rather than calculate the employer’s wider losses. For a contract providing a defined working week and paid annual leave, annual salary is apportioned across the normal working days of the year. The contractual daily rate was therefore 1/260, not 1/228. A disputed claim for additional damages cannot be converted into a wage deduction through equitable set-off where the employer has not counterclaimed and the damages have not been determined.

Three full-time support staff employed by a college took part in a one-day strike. The college deducted sums calculated by reference to a daily rate of 1/228 of annual salary, treating paid holidays as part of the value of the services lost. The claimants accepted that some deduction was permissible under Miles v Wakefield Metropolitan District Council [1987] AC 539, but contended that the maximum deduction was one day’s contractual pay, calculated at 1/260.

The parties agreed the facts and sought a declaration that the deductions were excessive. The central issues were the proper interpretation of Miles and whether the employer could justify the additional deduction as equitable set-off or damages.

1. The claimants succeeded. The deductions made for the one-day strike were excessive, and judgment was entered for the claimants.
2. Under Miles v Wakefield Metropolitan District Council [1987] AC 539, the governing question is what wages the employee could sue to recover for the period of non-performance. The court should not calculate the deduction by reference to the employer’s wider losses from the withdrawal of labour. The House of Lords’ reasoning concerned deductions from wages and supplied the relevant principle without requiring a separate damages claim.
3. The contracts defined a normal 37-hour working week and provided normal remuneration for bank and public holidays and a further 25 working days. Those provisions meant that annual salary was apportioned over the normal working days in the year. The proper daily rate was therefore 1/260. The employer could deduct no more than that amount for the day not worked.
4. The employer’s reliance on equitable set-off failed. Sim v Rotherham Metropolitan Borough Council [1987] Ch 216 concerned an agreed damages counterclaim. It did not justify a deduction where the amount of damages was disputed and no damages counterclaim had been tried.
5. The court did not decide the further questions concerning pro rata reduction of holiday pay, unilateral contractual variation, or the effect of European Community law on rolled-up pay. It noted that those submissions raised serious legal and policy issues.