Strikes and Payroll: What are the Legal Requirements?

Posted on Thursday, 29th Sep '22

Duane Jackson by Duane Jackson

If your business faces industrial action, then it can be a concerning time, from calculating your work capacity to communicating the disruption to the business.

With workers in many different industries currently striking over pay and working conditions, managing payroll during these turbulent times can be difficult. When it comes to managing payroll and striking workers, what are your legal requirements and obligations?

Strikes in the news

With swathes of workers currently organising strikes, such as barristers on an ongoing strike over pay, Royal Mail workers negotiating out of a real term pay cut and better contracts, train workers striking over conditions and pay and rubbish collection strikes across the country.

If your industry is dealing with strikes at the minute, understanding what the regulations are and what best practice is, is important.

Do employees get paid for being on strike?

Put simply, no. There are no legal requirements to pay staff while on strike. It is entirely discretionary as to whether an employer pays their employees if they are striking. Generally, employees should not expect to get paid for striking.

How much pay can be deducted from an employee?

You are allowed to deduct no more than what an employee would have been paid for the hours missed. If an employee is on an annual salary and strikes for one day, you would be able to deduct a maximum of 1/365th of their pay.

For part-time employees, the pay deduction would be pro-rated for the time on strike versus the normal time worked. The same applies for hourly or shift workers, if it was their normal scheduled hours, then you would need to deduct those hours.

As well as deducting pay from striking workers pension contributions can also be deducted. This includes both employer and employee contributions. However, employees can request a top-up to their pension through a lump sum which they will pay.

If a person was not scheduled to work on the official strike days provided to you by the union, then you cannot deduct pay from them.

How should employers communicate pay deductions?

As an employer, once you have received notice from the union of the intention to strike and how long the strike is for, you can then communicate to striking employees what the pay deductions will be, outlining the implications of their action.

You should provide your employees with the breakdown of what the pay deduction will be, and how they can calculate their deduction. You should also explain why you will deduct their pay if they strike, and who they can contact about specific enquiries.

If you don’t already have information on strike pay in the staff handbook or employment contract, you should take this time to consider what your policy on strike pay is.

Partial performance strikes and pay

Sometimes a strike will be a ‘partial performance’ strike, whereby only a portion of work is completed, or certain tasks are refused. This could be over concerns about health and safety, or lack of training provided.

If this kind of industrial action is taken and you, as an employer, refuse to accept partial performance, then you must do the following:

  1. Communicate to employees that they must only come in if they are going to complete their contractual work.
  2. Inform them that if they don’t fulfil the terms of their contracts, you don’t have to pay them.

However, if you as an employer accept partial performance you are legally obligated to pay your employees in full.

What do I do if my employees receive strike pay from their union?

As strike payments, often given out of a strike fund owned by the union, do not involve you, you will not need to adjust any other payments. An employee does not have to tell you that they have received strike pay and many may not receive any strike pay at all.

Calculating statutory pay and pension pay for striking employees

While an employee on strike does not break their continuous employment, they do lose days on their total length of service, which is used in calculating redundancy pay, pension pay etc.

You should ensure that you have an accurate calculation and record of each strike day against any employee. Using a payroll platform like Staffology HR can help you to maintain an accurate digital record of this that’s fully accessible by the employee and employer alike.

Is your company facing industrial action?

If your company is facing industrial action, then you should be prepared by using flexible, cloud-based payroll software such as Staffology Payroll. Our payroll software allows you to add by-the-minute changes, such as strike pay deductions, with ease.

Get a demo today.

Duane Jackson, September 29th, 2022

Related Articles

A Guide to Calculating Annual Leave Pro-Rata

30th Nov '23

All employees are entitled to annual leave. But how much? This blog explains everything you need to know about calculating annual leave pro rata for your employees.

by Duane Jackson

The Four-Day Working Week: How Does It Work?

26th Sep '23

A four-day workweek aims to give employees more work-life balance. With more companies adopting it in the UK, there are a few things you need to know.

by Duane Jackson

To top
Chat Now