In a bid to limit some of the spiralling costs resulting from the pandemic, many employers have been considering whether to cut the sick pay of staff who remain unvaccinated and are required to self-isolate under Government guidance. Many retailers in particular, including Ikea, Next, Ocado and Morrisons have introduced changes to this effect.
Under current guidance (watch this space), those who are unvaccinated are required to self-isolate for 10 days where they live in the same household as someone who has tested positive for COVID-19 or have been in close contact with someone who has tested positive. Those who are fully vaccinated are not required to self-isolate in those circumstances. Therefore, those who remain unvaccinated present a greater strain on the finances of employers if they were to pay those staff in full for 10 days and in circumstances where they were unable to work whilst self-isolating (as is the case for many working in retail but also in education, security services, and, of course, healthcare). In addition, many employers are considering introducing such a change as a way of incentivising vaccine take-up for those who are lingering on the fence.
To be clear, the “cut” to sick pay would only apply to any enhanced sick pay offered to staff and not to Statutory Sick Pay which is payable to all staff who are required to self-isolate due to COVID-19, whether vaccinated or not. However, at £96.35 per week, it presents a significant cost-saving to employers compared with paying staff full or enhanced pay.
For employers wishing to introduce similar policies or changes, here are some key pitfalls to watch out for:
- Can we cut sick pay and how?
The first point to check is whether the company’s enhanced sick pay is contractual or discretionary. If it is contractual, e.g. it is included within an employee’s contract of employment, then any change would need the employee’s agreement, which may not be easy to obtain! Alternatives include forcing the change and sitting out any potential claims for breach of contract or the controversial “fire and rehire” tactic under new sick pay terms. However, both involve significant risk and require careful management.
Where company sick pay is discretionary, for example where its terms are included in a non-contractual policy which is subject to periodic change, a company has (almost) free reign to make any changes it sees fit to.
- What changes can’t be made?
Any changes which would discriminate against individuals who remain unvaccinated on the basis of their race, age, sex, disability or religion/belief would be unlawful. When it comes to vaccination-related policy changes, staff who possess the following protected characteristics are the most likely to be at risk of discrimination:
The Government’s guidance includes exceptions for those who have recognised medical exemption from vaccination. Therefore, if the policy change is limited to cutting sick pay for those who are required to self-isolate due to being unvaccinated, those disabled people who are exempt will be unaffected as they would not be required to isolate.
However, those individuals who have a disability which places them at a higher risk of complications or side-effects of the vaccine, but who lack a legally-recognised ‘medical reason’ not to be vaccinated may have more difficulty. They may be required to self-isolate and could feasibly bring a claim for indirect discrimination if they face a cut in sick pay. In such circumstances, a possibility for an employer defending such a claim would be an argument that it was proportionate to discriminate against such a group for the purposes of a costs-saving business need, or in order to encourage vaccine take-up to protect the health and safety of its workforce.
Individuals from black and ethnic minority backgrounds are approximately 20% less likely to accept a COVID-19 vaccine according to a survey conducted by the Royal Society for Public Health. Therefore policies which would result in less favourable treatment of individuals from such backgrounds are likely to fall foul of indirect discrimination protections.
However, a company will have a valid defence to an indirect discrimination claim if it can demonstrate that there is an objective justification for its policy change.
Some have suggested that individuals who hold a particular religion or belief which resists vaccination could be discriminated against by such a change. However, religions who hold such a mandate are relatively rare and it is a high threshold for a non-religious belief to qualify as worthy of protection from discrimination. The hardest condition to satisfy for such a belief in this context would be that it is ‘worthy of respect in a democratic society’ as it requires a balance against the rights of others in society, including their right to life and their protection from abuse. We therefore think the risk of a claim succeeding on this basis is remote.
- What other changes could be made?
Employers will need to consider their overall aims and requirements. If the aim is not just to save money but also to incentivise vaccine take-up, a view to the longer-term impact of policy changes will need to be taken.
- Withholding company sick pay for someone who contracts COVID-19 due to being unvaccinated: Many companies include clauses in their employment contracts which preclude an individual from being paid for leave they take due to a self-inflicted injury. However, we believe that someone who contracts COVID-19 due to being unvaccinated may not be readily captured within this definition. Technically, such a change could be made to a discretionary sick pay policy, but it does risk coming across as punitive and may tend to have an opposite effect to encouraging vaccine take-up.
- Allowing individuals to reschedule holiday where they have been required to self-isolate: Where an employee falls ill whilst on holiday, they may request the period of annual leave be converted into sickness absence and to reschedule that period of holiday. This legal right is limited to statutory holiday only. The same rules do not apply to periods of self-isolation for contacts of COVID-19 cases (as opposed to themselves being diagnosed with COVID-19) which fall during a holiday. However, employers may consider applying them as a way of motivating their workforce. Although this may seem excessively generous, employers can limit sick pay during this period to SSP only (subject to eligibility) for those who are self-isolating due to being unvaccinated.
- What is the wider impact?
- Employee relations: managing the cost of the pandemic continues to be a major issue for businesses. There is clearly a fine balance between cost, the impact of perceived pay cuts on staff is and the stability of the workforce.
- Insurance cover: measures which encourage vaccine take-up may be viewed positively by insurers and support certain claims for COVID-19-related incidents.