Reducing sick pay for unvaccinated employees: what are the risks?

Recent reports indicate that some employers are paying statutory sick pay, not full company sick pay, to unvaccinated employees who have to self-isolate after coming into contact with someone with COVID-19. There is no suggestion that they are withholding company sick pay from unvaccinated employees who themselves have had a positive test.

What are the rules on self-isolation and sick pay for close contacts?

Fully vaccinated employees can take daily lateral flow tests instead of self-isolating after being exposed to a positive case of COVID-19. However, unvaccinated close contacts still have to self-isolate. Read more in the guidance for Scotland and England (Guidance for households with coronavirus infection and Guidance for contacts of those with coronavirus).

If an employee is required to self-isolate as a contact, and because of that self-isolation is unable to work, they will be eligible for statutory sick pay (SSP) from the first day of absence. Whether they are also entitled to contractual sick pay depends on the terms of the contract.

Can we stop paying company sick pay to unvaccinated employees who are self-isolating as a contact?

To encourage vaccination, reduce absence levels and cut costs, you may want to restrict pay to SSP for unvaccinated employees who are self-isolating as a close contact. Whether you can do so will depend on the wording of your sick pay rules, including whether contractual sick pay is:

truly discretionary;
only payable when SSP is payable;
only triggered by illness (in which case it is unlikely that it would need to be paid to those self-isolating as a contact).

Also, check any communications with staff since the start of the pandemic about company sick pay and periods of self-isolation as a close contact in case you might have created a contractual entitlement to pay in these circumstances.

If there is a contractual right to company sick pay for employees who are self-isolating, and you want to withhold it, you would need to consult and seek agreement to the change (either individually or collectively); unilaterally impose the change; or terminate employment and offer re-engagement on new terms. There are risks involved with each of these approaches, as highlighted in our earlier blog.

If company sick pay is not paid when there is a contractual right to it, there is a risk of breach of contract, unlawful deduction from wages and constructive dismissal claims.

What are the discrimination risks?

A mandatory policy on vaccination, if applied inflexibly, risks discrimination claims from those with protected characteristics, such as disability, age, or religion or belief, who are less likely to be vaccinated (read more in our earlier blog).

This type of discrimination claim can be defended if the requirement can be justified as being a proportionate means of achieving a legitimate aim. There is likely to be a legitimate aim, such as promoting good attendance at work and service continuity (cost saving along would not be enough). The key issue will be whether the rule is proportionate, considering amongst other things if there is a less discriminatory way of achieving the aim.

Because of this discrimination risk, some of the employers reported to be introducing new sick pay policies have said that they will consider each case individually and allow exceptions to the mandatory vaccination requirement. It will be important for the parameters of any new policy to be made clear to the decision makers to ensure a consistent approach.

Data protection

If you are only conducting a visual check of someone’s COVID status and do not retain any personal data from it, this would not constitute ‘processing’ personal data. However, if you are conducting digital checks or recording vaccination data, then data protection issues will come into play. Guidance on this has been published by the Information Commissioner's Office.

More information

Although there may be sound reasons for reducing sick pay for unvaccinated employees who have to self-isolate as a contact, bear in mind the potential contractual, discrimination, data protection and employee relations issues.

Contact a member of the Brodies Employment & Immigration team if you would like to discuss anything raised in this blog. Workbox by Brodies users will find useful information on the following pages: