Hartley and others v King Edward VI College

Under section 2 of the Apportionment Act 1870, salary payable under an annual employment contract accrues equally on each calendar day unless the contract expressly excludes apportionment. Where professional duties may be performed throughout the year, the daily rate is therefore 1/365 of annual salary rather than a rate based only on weekdays or directed working days.

Section 7 requires an express contractual stipulation that no apportionment is to take place. An implication drawn from the relationship between pay and measurable working time is insufficient. The appropriate rate nevertheless depends on the proper construction and duration of the particular contract.

The appellants were sixth-form college teachers employed under annual contracts incorporating the Red Book. Their duties comprised 195 days of directed time and additional professional work performed during evenings, weekends and holidays. After a lawful one-day strike, the college deducted 1/260 of each teacher’s annual salary. The teachers contended that section 2 of the Apportionment Act 1870 limited the deduction to 1/365.

The Birmingham County Court entered final judgment for the college because it was bound by Amey v Peter Symonds College [2013] EWHC 2788 (QB). The Court of Appeal dismissed the teachers’ appeal: [2015] EWCA Civ 455; [2015] ICR 1143.

The Supreme Court had to decide whether section 2 applied, whether accrual from day to day meant equal accrual on calendar days, and whether section 7 or the contracts displaced statutory apportionment.

1. Appeal allowed unanimously. Lord Clarke delivered the judgment, with which Lady Hale, Lord Wilson, Lord Hughes and Lord Gill agreed. Section 2 of the Apportionment Act 1870 applied, section 7 did not exclude it, and the permissible deduction for a strike day was 1/365 of annual salary.

2. Section 2 is a deeming provision. It treats salaries within section 5 as accruing from day to day and makes them apportionable accordingly. The provision remedied the common-law consequences of treating periodic salary payments as entire and indivisible. The contracts did not expressly or by necessary implication divide salary between separate obligations performed on each day of directed time.

3. For an annual contract of this kind, accrual from day to day means equal accrual on every calendar day. The teachers received annual salaries, paid monthly and including holiday periods, for the performance of all their professional duties. Those duties included important undirected work carried out in evenings, at weekends and during holidays. A rate of 1/260 wrongly assumed that remunerated work was confined to weekdays, while a rate of 1/195 placed excessive weight on directed working days. The statutory method therefore produced a daily rate of 1/365.

4. Section 7 permits parties to contract out of statutory apportionment only through an express stipulation having the effect that no apportionment is to take place. Ambiguous wording or an implication derived from the supposed relationship between pay and measurable directed work does not suffice. These contracts contained no express or implied stipulation excluding apportionment.

5. The result was specific to annual contracts. The daily rate in another case must be determined from the duration and proper construction of the particular contract. The parties were invited to agree the order, failing which they were to file written submissions on its form and costs.

1. United Kingdom Supreme Court: Allowed the teachers’ appeal unanimously: [2017] UKSC 39.
2. Court of Appeal: Dismissed the teachers’ appeal: [2015] EWCA Civ 455; [2015] ICR 1143.
3. Birmingham County Court: Entered final judgment by consent for the college because the court was bound by Amey v Peter Symonds College [2013] EWHC 2788 (QB), while preserving the teachers’ right to challenge that authority on appeal.