Can employers slash sick pay for unvaccinated staff?

Withholding statutory sick pay for employees who are not vaccinated carries a similar risk to introducing a ‘no jab, no job’ policy, says Fiona Mendel

Can employers slash sick pay for unvaccinated staff?

Supermarket chain Morrisons’ recent announcement that from 1 October, they will no longer be paying full sick pay for ‘pinged colleagues’ who have chosen not to receive their vaccinations, has faced significant backlash, particularly from unions who claim it is unlawful. 

Self-isolation rules have been relaxed in recent months whereby fully vaccinated adults are not required to quarantine if they receive a notification saying they have been in close contact with a person who has Covid-19. 

The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 quickly came into force at the start of the pandemic, entitling individuals who were required to self-isolate to receive Statutory Sick Pay (SSP) from day one of absence, subject to meeting the standard qualifying conditions. 

As a temporary Covid-19 measure to support small and medium-sized employers, the government also introduced the Coronavirus Statutory Sick Pay Rebate Scheme, which enabled employers to reclaim up to 14 days SSP per employee if they or someone they lived with had Covid-19 or had received notification to self-isolate. 

The scheme came to end on 30 September 2021 and is likely the reason why businesses are reconsidering their obligations towards paying sick pay, especially if they are unable to recover it for ‘pinged’ employees who remain unvaccinated. 

Withholding SSP

Ordinarily, SSP may only be withheld if an employer has evidence to believe that the employee was not ill, or if the employee failed to comply with the organisation’s absence notification requirements. An employee is entitled to use an official ‘ping’ notification for the purposes of receiving SSP. 

Withholding SSP for unvaccinated employees carries similar risks to introducing a ‘no jab, no job’ policy in that it could attract claims including those relating to discrimination and human rights. While some jobs will require the vaccination – such as working in care homes – in the main, having the vaccine is likely to remain a matter of personal choice.

The government has stressed that the vaccination programme is not mandatory and thus individuals should not be discriminated against for refusing the jab. This illustrates that there is a human rights dimension to any requirement that may be placed on individuals to be vaccinated. 

Any detriment an individual suffers for refusing to be vaccinated could be used to launch a claim. It may also give rise to indirect discrimination claims on the basis that some ethnic groups are less likely to have been vaccinated than others, while others may choose not to have it on medical grounds. 

Contractual sick pay provisions 

An employer may agree, as a contractual benefit, to pay more than the SSP rate to employees when they are absent from work due to sickness or injury. If a contractual sick pay scheme is provided for employees, it is legally binding and any failure to make a payment in accordance with the rules of the scheme would amount to a breach of contract and, depending on whether the breach is sufficiently serious, may further entitle the employee to claim constructive dismissal. 

Where contractual sick pay is expressed to be entirely discretionary, it allows employers to exercise their discretion to pay more than SSP. Hence, if they wish to withhold it for those unvaccinated, they are in theory able to do so. In practice however, where an employer ignores the discretion and routinely pays full pay to employees when they are absent, an Employment Tribunal will say that the discretion to pay full pay for sickness absences has, in fact, become a contractual term because of the ongoing custom and practice. This will then make it difficult for the employer to withhold sick pay to employees in the future.

Commercial considerations

Employers considering amending their sick pay schemes as a financial measure (including on a temporary basis) for those who are unvaccinated or for any other reason, should bear in mind the following: 

  • Employers with discretionary sick pay schemes must act fairly and reasonably and not arbitrarily or capriciously.
  • To maintain mutual trust and confidence, employers should ensure consistency in their decision-making and must not discriminate against a particular employee including the unvaccinated because of any (physical or mental) disability.
  • Employers with enhanced contractual sick pay schemes should seek employees’ agreement, or act in accordance with any contractual flexibility clause and give consideration to any collective or individual consultation procedure. 
  • While the withholding of SSP for unvaccinated employees may not cause financial hardship in all cases, it may still amount to a breach of contract and, depending on whether the breach is sufficiently serious, entitle the employee to claim constructive dismissal. 

Fiona Mendel is senior associate at Seddons Solicitors