Firms are cutting sick pay for the unvaccinated – what does employment law say?

A person’s COVID-19 vaccination status is increasingly determining which events they can attend, where they can travel and where they can work. Vaccines influence the jobs that people can do (some companies require a vaccine to work), as well as when workers are required to take sick leave and the support that they receive during that time.

The discrepancies in self-isolation rules^[1] for vaccinated and unvaccinated contacts of positive COVID tests have also also affected employers. Companies potentially have to pay more for unvaccinated workers than vaccinated ones if they have to cover longer periods of sick leave.

A number of companies^[2] have opted to remove or reduce the sick pay available to unvaccinated members of staff. This move is controversial and raises a number of legal issues and debates.

The idea behind sick pay is to provide financial support to individuals who cannot work due to illness so that they have the opportunity to recover. There are two sources of sick pay. The first is “statutory” sick pay, which is paid by the government to employees who are absent from work. The second is “contractual” sick pay, which is established in contracts of employment and differs between companies and sectors.

Companies often use these contractual payments to supplement statutory sick pay, as statutory sick pay can be difficult to access and provides only a bare minimum level of support to employees absent due to illness. The level of statutory sick pay in the UK is only £96.35 per week – about an 80% cut in income^[3] for an average worker. Statutory sick pay is only available for workers from day four of their sickness – and then only to those who earn more than £120 a week.

The added requirement that individuals are “employees” in order to claim statutory sick pay also means that statutory sick pay is unlikely to reach those who need it most. For example, many of the individuals identified as “key workers” in the pandemic, such as in the care and food delivery sectors, would not qualify for “employee” status. They may work under casual or part-time contracts which do not display the ongoing commitments to offer and accept work between the parties required by law. They would either be classed as “workers” (requiring a lesser level of commitment) or even “independent contractors” (under which individuals are understood to work on their own account rather than under the control of an employer).

COVID sick pay

During the pandemic the government has modified some of the statutory sick pay rules to ensure greater access for workers affected by the pandemic. New legislation^[4] was introduced to make sick pay available from day one of sickness and to extend sick pay to include those having to self-isolate as well as those suffering illness.

There was also provision for a sick pay rebate^[5] for small and mid-size enterprises and, most recently, an extension^[6] in the time that employees can take sick leave without the need for a doctor’s note. But the government resisted further changes to sick pay, despite a recent public consultation^[7] and sustained pressure^[8] from trade unions showing support for wider reform,.

As a result of the access problems and low levels of statutory sick pay, contractual sick pay can be a real benefit to individuals who have to take time off from work due to COVID infection or self-isolation. But this has created a logistical and cost burden for employers who might also be experiencing other cost pressures during the pandemic (continued workplace closures, complying with health and safety requirements, changing customer demand and so on).

What does the law say?

Companies have recently sought to reduce costs by removing contractual sick pay^[9] for unvaccinated members of staff who are required to self-isolate after close contacts test positive. For new starters this move is not in itself problematic. The law views a contract as a voluntary agreement between employers and employees, both of whom can – in theory at least – determine its content. The public consensus around the value of vaccinations and the level of uptake in the UK also mean that such provisions are unlikely to threaten recruitment.

But removing contractual sick pay during the life of the contract is another story. If the contract provides for contractual sick pay and the company does not pay it then an employee would be able to bring a claim for breach of contract or unlawful deduction of wages. Much will depend on the wording of the contractual sick pay provision: if the payment is discretionary, then the risk to the employer in making the change is much lower.

Modifying a contract during its lifetime normally requires employee consent. Without that consent, or extra benefits for the affected employee, employers who remove entitlements to contractual sick pay could be opening themselves up to claims of contractual damages or “constructive dismissal” (a breach of contract so severe that it entitles an employee to resign and claim compensation).

There is the option for employers to “fire” employees and “rehire” them on new contractual terms, which is legal in the UK, but very risky. Employers must have a sound and pressing business reason and undertake extensive consultation, otherwise they face legal claims such as breach of contract and unfair dismissal and possible reputational damage.

Companies will also have to take care with the wording of the contract to ensure that they are not discriminating against those who refuse the vaccine on health grounds. Many of these policies allow for mitigating circumstances to avoid the risk of litigation.

At the very least, these uncertainties highlight the need for reform of statutory sick pay. All workers must have the financial support to take time off work and reduce the possibility of the workday turning into a super-spreader event.

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References

1. ^{^} self-isolation rules (faq.covid19.nhs.uk)
2. ^{^} number of companies (www.theguardian.com)
3. ^{^} 80% cut in income (hansard.parliament.uk)
4. ^{^} New legislation (www.legislation.gov.uk)
5. ^{^} sick pay rebate (www.legislation.gov.uk)
6. ^{^} extension (www.legislation.gov.uk)
7. ^{^} public consultation (www.gov.uk)
8. ^{^} sustained pressure (www.tuc.org.uk)
9. ^{^} removing contractual sick pay (www.bbc.co.uk)
10. ^{^} David Whidborne / Shutterstock (www.shutterstock.com)
11. ^{^} Great (docs.google.com)
12. ^{^} Good (docs.google.com)
13. ^{^} Meh (docs.google.com)
14. ^{^} Weak (docs.google.com)