IKEA assembles new sick pay policy for unvaccinated employees

Statutory sick pay and self-isolation rules: what the law says

Statutory sick pay (SSP) is the minimum rate of sick pay for employees if they are unable to work due to incapacity. While employers will have different company sick pay policies, by law they must pay an employee SSP for the period they are legally required to self-isolate, if this period is for at least 4 days, and are unable to, or too unwell to, work from home. SSP will be paid from the first working day of absence due to self-isolation.

IKEA’s new sick pay policy: benefits vs. risks

In this context, IKEA has announced that going forward, its unvaccinated employees will only receive SSP of up to £96.35 per week if they are asymptomatic and required to self-isolate due to being a close contact of a positive Covid-19 case. IKEA will still be required to pay these unvaccinated employees SSP for the period they are required to self-isolate due to having close contact with a positive case. But they are precluding such employees from more enhanced sick pay rates, only payable to employees required to self-isolate due to having symptoms and subsequently testing positive (regardless of whether they are vaccinated or not). 

The benefits and good intentions of such policies are clear: it acts as further incentive for individuals to be vaccinated to help combat the pandemic, but also serves to reduce employers’ costs in paying full sick pay for individuals self-isolating despite remaining asymptomatic and testing negative. But it could also deter existing unvaccinated employees to follow the correct self-isolation rules if they are in close contact with a positive case, given the financial impact of losing pay. 

If your company is considering implementing such a policy, here are some additional legal risks to bear in mind:

1. Discrimination claims

Whilst vaccination status itself is not a protected characteristic under the Equality Act 2010, providing different benefits to employees depending on their vaccination status could disproportionately and adversely affect groups of employees who share the same protected characteristic, if vaccination rates amongst these groups are significantly lower. 

Unless different treatment between employees due to their vaccine status can be justified and supported by clear evidence as being a proportionate means to protecting staff health and safety and reducing staff absences and costs, this policy has at least potential to give rise to indirect discrimination claims.  Employers would therefore need to consider appropriate exemptions to the policy, mitigation factors and other measures to satisfy themselves such a policy is proportionate to achieving its objectives. A further factor in assessing proportionality will be the known medical evidence concerning the extent the vaccine prevents individuals developing Covid-19, symptomatic or not, and reducing transmission, particularly in light of the emergence of the omicron variant.  

As an indication of seeking proportionality, IKEA has stated that cases will be considered on an individual basis to take into account any mitigating circumstances. Though this suggests that this will account for employees with a medical or other reasons linked to a protected characteristic for not being vaccinated, this adds another layer of complexity and administration for employers for what should be usually a straightforward and quick process of making payment of company sick pay. Unless there is a centralised system ensuring cases are dealt with fairly and transparently, employers could face discrimination claims by aggrieved employees if two employees with similar factual circumstances are treated differently.

2. Breach of contract

Clearly, such a policy would be possible if such benefits are discretionary, as the employer is introducing further factors it wishes to apply in exercising this discretion. However, if employees are contractually entitled to enhanced sick pay, any unilateral removal of contractual entitlement could amount to a breach of contract, and potential claims for unauthorised deductions from wages.  The small print will be relevant to ascertain if payments of enhanced sick pay are payable in circumstances of asymptomatic self-isolation, either as a written contractual term, or implied and has emerged as a custom and practice of the employer during the course of the pandemic.

3. Data protection

Employers will need to consider administrative and legal issues in obtaining and securely keeping records of employees’ vaccination status and medical information. How long the data will be retained, and how exactly it will be used should be clearly communicated in privacy statements.  There is also the obvious issue of the extent employers will require proof of an employee’s vaccination status, and whether it will insist on sight of a Covid pass QR code as evidence, or if self-certification is sufficient, but which is open to potential abuse, given the financial impact to an individual in declaring they are unvaccinated.

Are more employers likely to follow in IKEA’s footsteps?

As cases continue to rise and businesses face increasing pressures of staff absences now in the future due to the rapid spread of the omicron variant, many employers are feeling the need to introduce steps to encourage employees to be vaccinated, and control their sick pay wage bill.  Large employers, including Wessex Water, Ocado and Next are also implementing similar policies. The obligation on employers to take reasonable steps to reduce any workplace risks, under the Health and Safety at Work Act 1974, could potentially be used as a justification to encourage vaccination if carried out in proportionate way.

Aside from this, it is important for employers to take active steps in deciding how to approach issues with the vaccination status of employees, including carrying out risk assessments and introducing a vaccine policy or editing current policies to include their position on vaccinations.  As with all workplace policies, but particularly concerning an emotive issue such as vaccination, communication and consultation with employees and maintaining trust will be critical.

If you are an employer considering such policies or have any other workforce issues, please get in touch at d.sheppard@capitallaw.co.uk.