We have a discretionary company sick pay policy. Can we decline to pay company sick pay to unvaccinated employees who are self-isolating due to Covid-19 and pay SSP instead?

RMI members may have read in the press recently that some larger employers such as Ikea, Next, Wessex Water, Ocado and Morrisons have introduced policies so that they do not have to pay company sick pay to unvaccinated employees who are self-isolating as a result of Covid-19 and paying SSP instead. The commercial rationale for this is due to the fact that high levels of sickness absence around Covid-19 (particularly amongst unvaccinated employees) and the Omicron variant in particular are causing a significant increase in costs for business generally.

If an employer has reserved the right in the contract of employment to pay company sick pay on a discretionary basis, then if it wishes it can introduce a policy of not paying company sick pay (paying SSP instead) to unvaccinated employees when they are required to self-isolate due to Covid-19 (regardless of whether the employee is self-isolating as a close contact of someone who has tested positive for Covid-19 or the employee has tested positive for Covid-19). Unvaccinated employees will likely suffer a financial detriment from this change. It is therefore important that employers with consult employees if they present any mitigating circumstances around why they have not been vaccinated to avoid the risk of potential discrimination claims around protected characteristics e.g. religion, disability, pregnancy etc. There is some doubt around whether anti-vaxxers would be protected under the Equality Act 2010 as a philosophical belief although this has yet to be properly tested in an Employment Tribunal.

Data protection

Collecting data from employees regarding vaccination status will engage data protection and as the company is collecting a special category of data it will need to give careful thought to the reasons why it is collecting and storing this data:-

https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/special-category-data/what-are-the-conditions-for-processing/

An employer could argue for example that the company needs to collect data on individual vaccination status for the purposes of ensuring health and safety of employees and maintaining records in relation to sick pay to ensure employees are paid correctly in compliance with employment law. The company will also need to be satisfied that the reason for recording vaccination status is clear and necessary.

The Information Commissioners Office has set out some useful guidance around the interaction of vaccination status and data protection which employers may find of some assistance:-

https://ico.org.uk/global/data-protection-and-coronavirus-information-hub/coronavirus-recovery-data-protection-advice-for-organisations/vaccination-and-covid-pass-checks/

Conclusion

It is understandable that employers may have a need to reduce the cost of sickness absence in the current economic climate such that applying a discretionary company sick policy to unvaccinated employees may be a reasonable approach provided that employers take a flexible pragmatic approach to employees who present mitigating circumstances around reasons for remaining unvaccinated.

As always, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.