Their unvaccinated UK workers required to isolate could now receive £96.35 per week Statutory Sick Pay (SSP), instead of company sick pay, unless there are mitigating circumstances. The change to the company’s policy stems from an increase in staff absences due to the Omicron COVID strain and rising costs.
IKEA’s unvaccinated workers who don’t have mitigating circumstances who test positive for COVID-19 will receive full company sick pay in line with the company’s absence policy, whilst unvaccinated co-workers without mitigating circumstances who have been identified as close contacts of a positive case will be paid SSP. IKEA will be approaching this on a case-by-case basis.
Other employers – English water supply and sewerage utility company Wessex Water and retail giant Next – will also implement company sick pay cuts for unvaccinated workers this week. Acknowledging it is an “emotive topic”, the announcement from Next comes just days after it said it would increase their prices to offset higher wage and manufacturing costs.
Could cutting sick pay for the unvaccinated be the new trend in 2022?
What should employers bear in mind when considering cutting sick pay for unvaccinated workers?
There are complex legal issues to consider. The first thing to understand is that the above decisions relate to payment of company sick pay over and above SSP.
Statutory sick pay (SSP) is normally payable when an employee is absent from work due to incapacity. Prior to March 2020, it was accepted that the term “incapacity” covers sickness absence. Subsequently, due to the requirement to isolate while waiting for the outcome of a PCR and for household members/close contacts to isolate, the term incapacity was widened to include those self-isolating for a number of reasons and so unable to work. It includes those experiencing symptoms of COVID-19, those living with someone who is isolating due to having symptoms of COVID-19, and those who have been advised through the contact tracing system that they have been in contact with someone with COVID-19.
Whether employers can cut company sick pay for unvaccinated workers is subject to the terms of their contracts of employment. If company sick pay is provided for in a non-contractual document such as a policy and/or company handbook, separate to a contract of employment, employers may be able to follow suit and cut their sick pay for unvaccinated workers. If the employer recognises a trade union for collective bargaining, they should consider their recognition agreement as they may be obliged to consult about the proposed policy change.
If provision for company sick pay is contractual, set out in the employees’ contracts of employment, it may be unlikely for an employer to successfully cut their sick pay for unvaccinated workers, without facing legal risks. There is also a risk where, although it is not in the contract, payment of company sick pay is so well known as part of the employment arrangements that the entitlement may be said to be an implied term.
It will only be possible to lawfully withhold contractual sick pay in circumstances set out in the employee's contract or contractual sickness policy, or where the employee has otherwise agreed in writing; otherwise, unless the contract is brought to an end, the employer's action in withholding sick pay will amount to an unlawful deduction from wages under section 13 of the Employment Rights Act 1996 and/or a breach of contract. Employers should consider carefully the circumstances in which they plan to withdraw contractual company sick pay entitlement as, if they end the contract and replace it with new terms, this may amount to a “dismissal”, and for employees who have sufficient service to claim unfair dismissal, they will need a substantial business reason to do so and will need to follow a fair procedure to try to minimise the risk of claims. In such cases, depending on the numbers of affected employees, there may also be a need to collectively consult under redundancy rules before imposing the change.
Employers should be careful if introducing new arrangements, ensuring that they do not treat employees with underlying health issues that qualify as a disability under the Equality Act 2010 unfavourably because of disability compared to non-disabled people as that would be unlawful discrimination. It is also unlawful to treat an employee unfavourably arising from disability unless it can be objectively justified. Employees who are medically exempt from getting the COVID vaccine or those with other reasonable grounds for not being vaccinated – for example, employees who are pregnant or have concerns about getting vaccinated – may raise claims of discrimination. Further, it is possible an employee may claim to be indirectly discriminated against related to a protected characteristic of disability, or religion or belief. or sex if they experience a detriment as a result of following Government isolation guidance. As a result, employers should also consider whether their actions are a “proportionate means” of achieving a “legitimate aim” which would provide a potential defence.
This article is for guidance only and is not legal advice. Employers should seek legal advice when considering cutting their sick pay for unvaccinated workers.
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