More firms cut sick pay for unvaccinated staff

The number of employers following IKEA’s lead and cutting sick pay for unvaccinated staff is growing. The BBC reports that Ocado and Next are also cutting sick pay for unvaccinated staff who must self-isolate because of Covid exposure. They are saying unvaccinated workers without mitigating circumstances who have to self-isolate because they have been in close contact with a positive case will only receive statutory sick pay. However, the firms will continue to pay full sick pay to unvaccinated workers if they test positive for the virus. 

People Management looks at the legal risks of adopting a policy of this kind and, in particular, the risk of discrimination claims. That risk arises where unvaccinated staff who are disadvantaged by the policy can point to one of the ‘protected characteristics’ under the Equality Act which applies to them. So for example, pregnancy, religion, race or, possibly, a philosophical belief against vaccination. In that case the employer would have to objectively justify their policy and that explains why all the companies have been at pains to point out they will be treating every case on its own merits.

Time will tell how many more employers choose to cut sick pay in this way, targeting unvaccinated staff, but the numbers are set to rise with employers facing intense staffing and costs pressures caused by the fast spreading Omicron variant. So let’s hear more on this from Anne Sammon who has been busy advising clients on the merits and the legal risks of this. Anne joined me by video-link to discuss it and I started by asking whether this policy risks creating a two-tier workforce:

Anne Sammon: “I think there’s a risk in terms of emphasising the difference between people's personal choices and it can just spur this to become a topic of conversation in terms of what do you think about this policy? It's the kind of thing that you can see being discussed in the break room over lunch breaks and people having very strong views on it. I think one of the issues from an employment perspective, and more generally with this whole issue around vaccination, is that the debate becomes very polarised and people use quite emotive language and that’s where we start to tip into risks around harassment, for example, because you can see somebody who takes a particular standpoint on this feeling very aggrieved if they are being attacked verbally by a colleague, potentially.”

Joe Glavina: “IKEA and others are rightly saying they’ll treat every case on its own merits, but surely that’s going to be very time consuming. So, commercially, does the policy make sense?”

Anne Sammon: “So I suppose that depends on the particular workforce and the breakdown of how many people are vaccinated within your workforce and how many aren't. If you've got a majority who are vaccinated then, hopefully, looking at those exceptions on a case by case basis won't take too much of HR’s time. Also, there’s an issue about is it the line manager who maybe has those first conversations with the employee? Do you go straight to HR? Those are the kind of practical considerations that will depend on the size of the organisation and the relationships that managers have with HR and how upskilled those managers are to have conversations and not end up in difficult legal water because of saying the wrong thing. So I think that for some firms it will work. I think if you've got a majority of your workforce who are unvaccinated, that's where the issues are going to start in terms of the amount of time that's going to need to be put into each case and kind of considering it on a case by case basis. The other thing is, from an employment law perspective, we're often very concerned about consistency. So if you are doing things on a case by case basis, you still need to think about are you treating like cases in the same way so that you ensure that you're not disadvantaging people because of some other personal characteristic.”

Joe Glavina: “These firms are cutting sick pay for those who have to self-isolate because they have been in close contact with a positive case. But they are saying unvaccinated employees who test positive for Covid will still receive full sick pay. Why the distinction?”

Anne Sammon: “I assume the rationale for the distinction is, whether you're vaccinated or not, if you're Covid positive you have to self- isolate and therefore from a business perspective the business isn't having to incur any greater cost as a result of that individual's personal choice, but when it comes to close contact, if you're a close contact and you've been vaccinated then you can still go about doing your job, come into work, and therefore continue to provide the services that you are being asked to do so there's no need to cover company sick pay, whereas if you're unvaccinated, you should have to self-isolate so that's an additional cost to the business. So there is a business rationale there as being unvaccinated does increase the costs from the business’s perspective if they also have to provide company sick pay.”

Joe Glavina: “Can I turn to the discrimination risk, Anne. The employer’s defence would be that their policy can be objectively justified, a proportionate means of achieving a legitimate aim. The obvious business case is cost saving but there’s well established case law on that point which says cost alone is not enough – so you can’t discriminate just because it saves the business money.”  

Anne Sammon: “So cost alone is unlikely to be sufficient objective justification to defeat these claims but we have this situation where costs plus another factor could potentially be enough of a justification and I suppose one of the things that many employers will be thinking about is disruption to their workforce. If you've got a largely vaccinated workforce who can come to work even when they've come into close contact with Covid cases there's less business disruption than if you've got people who are unvaccinated who have to spend periods of time at home unable to work, thereby disrupting the business. So I can see that that might be one of the rationales that firms want to use if they if they're looking at implementing this policy because the argument would be that if you incentivise your workforce to be vaccinated, then you minimise the business disruption potentially caused by Covid.”

Joe Glavina: “Aside from cost, there’s also the health and safety argument, Anne. But again, it’s problematic isn’t it?”

Anne Sammon: “ Yes I think there is the whole kind of consideration of, well, if we tell employees that if they are unvaccinated and they have to self-isolate they just won't tell us that that's the reason that they're absent from work and therefore that does potentially undermine the arguments that you might run from a health and safety perspective. It also runs the risk of actually incentivising the wrong behaviour. So those employees turning up to work when they should be self-isolating, in breach of the regulations, but coming into work because they can't afford to be on statutory sick pay for that period of time. So I think if you're running a health and safety argument as your objective justification you have to take that into consideration and think through how we avoid that becoming an issue here”

Joe Glavina: “Will this require changes to employees’ contracts Anne?”

Anne Sammon: “Not necessarily. Most company sick pay schemes that we see are discretionary rather than contractual. So it's going back to that principle of looking at what's actually in the employment contract and the way in which the current sick pay policy has been framed.”

In case you missed it, Anne has been talking to this programme about managing employees who choose not to come to work because of their fear of Covid. It follows a recent ruling by the Manchester Employment Tribunal in a case where an employee had her pay stopped during the period she was away and she brought on to bring a claim of discrimination on ‘religion and belief’ grounds. That programme is ‘Fear of catching Covid not a ‘philosophical belief’ and is available now for viewing from the Outlaw website.