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Major employers are cutting sick pay for unvaccinated employees. Should you?

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Recently Ikea, Next, Ocado and others have announced that they are cutting sick pay for their unvaccinated employees who are identified as close contacts and are required to self-isolate. Their reasoning is to try and reduce the numbers of employees self-isolating due to Covid and thereby to reduce sick pay payments and increase workplace attendance.

These unvaccinated employees will still receive statutory sick pay (SSP) but will not receive any additional sick pay due under their employment contracts (contractual sick pay).

It’s important to note that these employers aren’t arguing that being vaccinated means you won’t catch Covid or need to self-isolate or that you won’t get sick pay if you are too ill to work. What they are saying is that the current Government rules treat vaccinated and non-vaccinated people differently, with the non-vaccinated being required to self-isolate on close contact where a vaccinated person would not. Therefore, being vaccinated reduces the circumstances in which a worker is legally required to self-isolate and so also reduces the chances of having to miss work.

Is this legal?

In general, employees are always entitled to statutory sick pay unless there is evidence that they were lying about their reasons for not being in work.

Whether contractual sick pay can be withheld depends on the terms of the employment contract.  If the right is non-discretionary, then employers will have to pay it or they may be liable for claims in the employment tribunal.

If the employment contract expresses contractual sick pay as being at the employer’s discretion, then it may be withheld.  However, there are many reasons that an employee might not be vaccinated and withholding contractual sick pay may still create a risk of a discrimination claim.  For example, if an employee has not been vaccinated because of a medical condition which amounts to a disability, there’s a risk that they may be able to claim discrimination.

Should every business consider doing this?

As discussed above, withholding contractual sick pay for unvaccinated employees is not without its risks. One consideration would be to look at your current employment contracts and see whether contractual sick pay is discretionary. If it is not, it may be possible to change this, but altering employment contracts comes with its own host of risks and considerations. 

Its also important to consider the impact that this could have on workplace relations. Vaccinations can be a politically contentious issue and employees may not react well if they feel that their contractual rights are being withdrawn without any consultation or discussion. Unions for staff at businesses that have taken this approach have certainly expressed their unhappiness with the move.

It has also been suggested that withholding contractual sick pay, and thereby making self-isolation less financially viable for lower income employees, may just encourage potentially infected staff to come into work and ultimately lead to more staff sickness and absences.

Ultimately, there will be a lot of factors to weigh up for any business considering this approach. Given the potential risks of claims and workplace disruption, it would be sensible to consult expert legal advice before making any significant changes.


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