Cutting Sick Pay for unvaccinated employees

Introduction 

Ikea, Ocado, Next and Morrisons along with several other large employers have recently announced that unvaccinated UK employees, without a valid medical exemption, who take time off work to self-isolate will not be paid their normal ‘day rate’. Instead, they will be paid the legal minimum Statutory Sick Pay rate of just £96.35 a week. The trend of employers bringing in such policies to effectively reduce unvaccinated employees’ self-isolation pay is sharply rising.

While many news reports are presenting such policies as a pay slash, many may wonder whether it is legal to penalise some employees and not others, especially in light of what Ikea itself acknowledges is ‘an emotive topic’ for many.

Employers who are minded to follow suit should be aware that cutting sick pay in this way can expose the business to claims in the Employment Tribunal such as for breach of contract or discrimination.  Before implementing a reduction in sick pay, employers should carefully consider whether they may receive any claims as a result. 

Sick Pay and Covid-19 Self Isolation

Employees who cannot work due to ill health are entitled to Statutory Sick Pay (‘SSP’) of £96.35 per week which must to be paid by employers for all sickness absence.  Employers cannot pay less than this unless if an employee is entitled to receive SSP. Things became more complicated when the rules changed at the start of the pandemic in March 2020 to make SSP available to employees who were required to self-isolate, even if they were not actually sick at the time.  As the requirement to self-isolate applied to all irrespective of vaccination status, there was no significant difference between vaccinated and unvaccinated staff.

In August 2021 the requirement to self-isolate was removed if the individual had received two vaccinations.  This created a significant difference between vaccinated and unvaccinated staff as those who were vaccinated would only be absent if they actually fell ill with Covid-19 rather than if they were required to self-isolate without having the virus themselves.    

The amount an employer is obliged to pay an employee during periods of Covid related absence will depend on whether the employer offers enhanced sick pay.  Whereas pay during sickness absence (which includes periods of self-isolation) cannot be less than the Statutory Sick Pay rate applicable at the time, many employers have in place enhanced sick pay policies that provide for pay at normal rates for several weeks of absence each year.  Sick pay is usually discretionary and set out in a policy document only but occasionally enhanced sick pay is enshrined in the employee’s contract.  The difficulty for employers is that many link an employee’s entitlement to enhanced sick pay to the right to receive SSP. When the entitlement to SSP was changed so that it included periods of self-isolation, many employers found themselves obliged to offer enhanced sick pay for periods of self-isolation even if the employee was not actually sick.

Employers seeking to amend their policies to remove the right to enhanced sick pay and only pay unvaccinated employees Statutory Sick Pay for periods of self-isolation are doing so on the basis that the employee would not be required to self-isolate if they were vaccinated.  Effectively, as the employee has not taken the vaccine they have, to some extent, brought the period of self-isolation on themselves. This is different from a period of sickness absence that arises for an employee who has actually contracted Covid-19 and thus needs to take a period of sickness absence. 

Possible claims arising

There are several possible claims that an employee could make if they are unvaccinated and deprived of enhanced sick pay including Breach of Contract and claims of Discrimination.

If enhanced sick pay is included in an employee’s Contract of Employment then they may be contractually entitled to enhanced sick pay for periods of absence and reducing the rate of sick pay could, depending on the wording of the contract, amount to a breach.  An employer may be able to argue that self-isolating when not actually sick with Covid-19 does not qualify as ‘sick’ leave and therefore enhanced sick pay is not due.  However, this could be a difficult argument to run as it may involve splitting hairs between when an employee will be considered sick and when they are taking precautions because they believe they may be sick. 

When it comes to discrimination, the basis of the claim will depend on why the employee has not received the Covid-19 vaccine.  This is because that reason will identify the protected characteristic on which they would base their discrimination claim.    

The Equality Act 2010 includes specific ‘Protected characteristics’ which include: Race, Religion, Sex, Age, Disability and Belief. In the case of an employee who objected to the vaccination on moral grounds then their claim would likely be based on religion or belief discrimination whereas an employee who was prevented from taking the vaccination because they suffered with a health condition would likely rely on disability discrimination. 

For employers who face claims of discrimination it will likely be necessary for them to justify the changes to their sick pay policy and so the employer must be prepared to clearly identifying the reason for implementing the policy.  Whatever the reason may be, it is very likely that the reason will become the subject of scrutiny in an Employment Tribunal.

Treading Carefully

The key issue for employers is to carefully consider the goal of any policy they propose and then ensure that the impact of the legal obligations owed to their workforce is properly considered.  Employers should carefully risk assess any policy before it is implemented and it is important to consider seeking professional advice as part of that process.  It is also worth bearing in mind that just because the big employers do it doesn’t necessarily mean it is legal. 

Please contact us for more information about the issues raised in this article or any aspect of employment law.