Tory-controlled Kent county council is being forced to pay back tens of thousands of pounds "unlawfully" deducted from the pay packets of striking teachers.
The High Court this week ruled that the county acted unlawfully in holding back almost twice as much as it was entitled to from a teacher's salary after a one-day strike.
The decision was made following a test case taken by the National Union of Teachers on behalf of Abigail Smith, a local teacher.
In the case of newly-qualified staff, Kent's action resulted in a deduction of pound;97.30 instead of pound;51.98.
The ruling ensures that no similar deductions can be made by any education authority in England and Wales.
Ms Smith, who teaches at Rowhill special school in Dartford, was not in court to hear the judge rule in her favour.
Doug McAvoy, NUT general secretary, said: "Teachers accept that if they go on strike a deduction will be made from their salary. But that deduction must be in line with their conditions of employment. It must be no more than that. Kent attempted to punish teachers for taking lawful strike action at a much higher rate than it was entitled to."
Thousands of NUT members in London and the South-east of England went on strike over London and fringe area allowances in March 2002.
The so-called Burgundy Book agreement, which is incorporated into every teacher's contract, spells out how deductions should be made in these circumstances.
It states that "where authorised unpaid leave of absence or unauthorised absence (eg strike action) occurs, deductions of salary shall be calculated at a daily or part daily rate based on the day's salary being 1365th of a year for each day of the period of absence".
However, the clause can be open to interpretation. Some local authority leaders believe that as teachers only work for 195 days a year, the number of days they are required to be in school, the deduction should therefore be 1195th of the annual salary.
Eleven of the LEAs in which teachers took action in March 2002 threatened to withhold close to double the agreed deduction.
All but Kent backed down when solicitors' letters went out. Kent argued that the contract agreed with Abigail Smith should be set aside by the School Teachers' Pay and Conditions Document, the statutory instrument governing teachers' employment.
Kent's barrister, Andrew Clarke QC, said the ruling had "considerable implications" for the profession nationwide and, recognising the importance of the case, Mr Justice Mackay granted the council leave to appeal.
A spokeswoman for Kent said: "The pay and conditions document states that teachers should be available for a minimum of 195 days per year.
"Using this information, with agreement from the National Employers'
Organisation for School Teachers, Kent deducted pay at the rate of 1195th for every day on strike.
"However, an alternative document known as the Burgundy Book uses a different deduction rate and therefore the situation was unclear.
"The legal arguments for both sides of this case were strong and Kent made it clear that this was not about an argument with the NUT - it was a situation which needed resolving with legal clarification."