Should you reduce sick pay for your unvaccinated staff?

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In recent weeks there have been various press reports on the approach being taken to sick pay by a number of large, well known employers in relation to unvaccinated staff who are obliged to self-isolate due to having close contact with a positive case of Covid 19.  Under the current rules, unvaccinated people are required to self-isolate for 10 days if they have come into contact with someone who has tested positive for COVID. The requirement to self-isolate doesn’t apply to those that are vaccinated.

Employers including Next, Ocado, IKEA and Morrisons will reportedly not be paying Company sick pay to unvaccinated staff in these circumstances.  This approach is reported to be in response to unprecedented levels of staff absence as well as encouraging staff to be vaccinated.

Many employers are now  considering whether they should also take this approach to Company sick pay.  However, this approach is not without risk and requires careful consideration.  We explore some of the main issues below.

  1. Does the employment contract permit the employer to withhold sick pay?

All employees are entitled to receive Statutory Sick Pay (currently £96.35 per week for up to 28 weeks of absence) during periods where they are obliged under current Government guidance to isolate due to Coronavirus.  The definition of “incapacity” which triggers an entitlement to SSP has been amended to include self isolation.  Employers must not withhold SSP for unvaccinated staff who are forced to self isolate.

However, many employers pay enhanced sick pay under the terms of the employment contract (usually known as Company sick pay) and it is this enhanced pay which many employers are seeking to withhold for unvaccinated staff.

There is a risk that withholding Company sick pay may be in breach of the employee’s employment contract.  Careful consideration will need to be given to the wording of the contract before any decision is taken to withhold Company sick pay and pay only SSP.  Unless the contract states that an employer has discretion as to whether Company sick pay is paid, or the contract clearly states that an employee has to be too unwell to work to receive sick pay, there is a risk that withholding Company sick pay will breach the employment contract.  This may lead to grievances and employment tribunal claims.

Employers should also consider that some employees may feel that withholding Company sick pay in these circumstances is unfair and unreasonable.  This approach may cause bad feeling among some staff and lead to the employer having to deal with grievances and complaints.  For smaller businesses, dealing with such matters may be more costly than any savings to be made by withholding Company sick pay.

  1. Discrimination

Another key risk that requires consideration is whether withholding Company sick pay for unvaccinated staff may discriminate against some employees.

If an employee has not been vaccinated due to a medical condition, pregnancy or a religious or philosophical belief, this may give rise to complaints and claims for discrimination.  In particular, a policy that unvaccinated employees will not receive Company sick pay in certain circumstances may be indirectly discriminatory.  Although the policy applies to all staff, it may be indirectly discriminatory if it puts certain groups with a protected characteristic at a disadvantage.  This may be the case for pregnant and disabled employees or those with particular beliefs.

Employers may need to make exceptions to any policy to withhold Company sick pay to take account of such employees.  For example, IKEA has stated that the policy will not apply to staff who have “mitigating circumstances”.  However, employers should bear in mind that making decisions about Company sick pay on a case by case basis may present a large administrative burden for employers.

In some cases, even if a policy is indirectly discriminatory, it may not be unlawful if it can be objectively justified as a proportionate means of achieving a legitimate aim. Such aims may include encouraging vaccination, addressing high absence levels and health and safety concerns.  As this particular issue has not yet been considered by the employment tribunal, it remains to be seen whether such a policy can be objectively justified in practice.

  1. Data protection issues

Whether they intend to or not, employers will be recording information about vaccination status by applying this type of policy and this gives rise to data protection issues.    Health information such as vaccination status is “sensitive” personal data and attracts a higher level of protection.  Employers will need to consider whether they have legitimate reasons for obtaining data about vaccination status and consider making revisions to existing data protection policies and privacy notices to take account of the consequences of such a policy.

  1. Health and safety considerations

Employers need to be conscious of the fact that reducing sick pay for unvaccinated employees may encourage those individuals to ignore rules relating to self isolation which may actually put the whole workforce at greater risk of being infected with Coronavirus.  Employers will need to weigh up this risk against the potential benefits which may be attributable to a change in approach to Company sick pay.

Whilst at first glance, reducing Company sick pay for unvaccinated staff may be attractive for many businesses, it is clear that any such change in entitlements requires careful thought and consideration.  The employment team at Taylor Walton is able to assist your business with addressing the matters highlighted in this article, in addition to any other employment law queries you may have at:

Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.


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