Can employers reduce sick pay for unvaccinated staff?

As Ikea joins the growing list of companies opting not to provide company sick pay to isolating unvaccinated workers, what are the legal implications of this strategy?

As Omicron-related absences continue to hinder employers, Ikea has become the latest big-name employer to cut sick pay for unvaccinated workers, following Ocado and Next. Ikea confirmed that unvaccinated workers without mitigating circumstances who have to self-isolate because they have been in close contact with a positive case would only receive statutory sick pay. The retailer added that it appreciated there were “many unique circumstances” and that it would consider all incidents “on a case-by-case basis”. Unvaccinated employees who test positive for COVID will still receive full sick pay.

Ikea’s decision to change its sick pay policy highlights a shift in the way that many employers are now handling the pandemic. But what are the legalities of such a move? Businesses looking to emulate this policy need to be aware of the risks.

It puts the unvaccinated at a particular disadvantage and the reason for that vaccination status may well be pregnancy, religion, a philosophical belief against vaccination, or medical reason (such as a fear of needles or allergy), all of which are protected characteristics under the Equality Act and could support discrimination claims. As such, the obligation is on the employer to objectively justify every individual case where it intends to pay less sick pay to an unvaccinated individual. Businesses also need to be able to show that such a policy is a proportionate means of achieving a legitimate aim, and saving costs is not usually a legitimate aim for larger employers. Citing health and safety concerns may appear like a more legitimate aim, but that too is not without problems. For example, employees may be less likely to disclose their COVID status and take sick leave if they know they are going to forfeit pay.

Employers looking to make changes to their sick pay terms should also consider existing contractual provisions. Contract variation requires consultation with employees, and where they have more than two years’ service, consent is required to avoid a breach of contract and or constructive dismissal claims. However, new starters could have their contracts set out lesser sick pay provisions where they are unvaccinated for COVID, notwithstanding discrimination issues discussed above, these are claims that do not require any specific service. There is a legal argument that isolating due to close proximity to a person with COVID is not deemed to be sickness, and hence does not trigger the right to contractual sick pay. Therefore, contract variation of contractual sick pay is not required. Employers would pay Statutory Sick Pay (SSP), which is currently refunded by the Government for a maximum of two weeks per employee. 

While it has become increasingly common for firms to exclude scenarios such as dangerous sports and elective surgery from enhanced sick pay schemes, employers also need to be prepared for any conflict this might cause. A decision to exclude unvaccinated employees from enhanced sick pay could lead to employees trying to find out which of their colleagues are unvaccinated, or could lead to disputes on whether behaviours such as alcohol consumption or smoking could be a reason not to receive company sick pay, as these are all personal, lifestyle choices.

If any client is considering taking action as described above then please contact your Consultant for further advice. 

Contact us to schedule your complimentary consultation.