Companies looking to reduce costs and absences by cutting sick pay for unvaccinated employees, following the leads of Ikea, Next, Morrisons and Wessex Water, need to consider a number of risks associated with such a move.
Employment lawyers warned such policies could lead to claims for indirect discrimination, while others suggested breach of contract cases could be an issue for firms.
Neha Thethi, head of employment at Lime Solicitors, told Personnel Today: “Next’s decision to cut sick pay for unvaccinated staff could have a significant impact on those from certain ethnic or religious backgrounds as well as those who are pregnant. This could give rise to claims for indirect discrimination.”
Thethi noted, however, that indirect discrimination was not necessarily unlawful. He said: “The Equality Act 2010 states that it is not indirect discrimination if the employer can show that their actions were proportionate as a means of achieving a legitimate aim. This is known in legal terms as an objective justification. Therefore, any company will need to objectively justify their actions when they intend to pay less sick pay to an unvaccinated individual. I believe that many companies are likely to follow suit especially in light of the recent surge in cases.”
Joseph Lappin, head of employment at disputes law firm Stewarts, agreed that lowering sick pay could prove problematic: “Organisations like Next and Ikea hope that reserving enhanced rates of sick pay for employees who have been vaccinated (and paying lower level of statutory sick pay rates for unvaccinated staff who need to self-isolate) will lead to unvaccinated staff taking the plunge and getting jabbed. Such a policy is risky.”
Paying different rates of sick pay was not as aggressive a policy as introducing a no-jab no-job policy, Lappin added, but nevertheless it could give rise to complaints from staff and was an employee relations issue.
“For example, some may have a medical condition that means it is dangerous on health grounds to be vaccinated. Others may have religious grounds for refusing the jab,” he said.
Equality legislation may give unvaccinated staff some protection, depending on the reason for the refusal to be vaccinated, he said. Echoing Thethi, Lappin added, “organisations who penalise staff financially for not having the vaccine could face discrimination complaints. Employers should therefore consult staff and consider the reasons for them not having the vaccine before deciding to reduce levels of sick pay.”
Marie Horner, partner in employment law at Langleys Solicitors, warned that companies may find themselves defending breach of contract accusations. She said: “Most contracts and policies do not expressly define what ‘sickness’ is for the purpose of receiving company sick pay, but, rather, the policy often adopts the definition of sickness for the purpose of assessing eligibility for statutory sick pay.
“In that scenario, without anything clearly to the contrary, there is an argument that, if a worker qualifies for statutory sick pay, he/she is also entitled to enhanced company sick pay where such provision is present in the contract; to refuse to pay it to unvaccinated individuals might place the company in breach of that contract.”
Kingsley Napley employment partner Richard Fox said “the chance of employment tribunal claims is still there, but employers may feel that risk is now a price worth paying for the greater good”.
He said firms must consider very carefully why they wanted to introduce such a policy because they may need in future to justify it to the court/employment tribunal. He said: “Do they have particularly vulnerable members of staff, can non-vaccinated employees be isolated from the other employees or is that practically impossible, can a policy of testing be introduced as an alternative to vaccination etc?
“Only once they have taken all these options into account should employers think about a Next or Ikea-style approach. The needs and risk return will vary from business to business. Where employers consider the right thing to do is to introduce such a policy, they must factor in the commercial risks of a claim from their employees for discrimination or breach of human rights. But that may be a risk they are now prepared to take on board for wider health and safety reasons.”