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Howes Percival warns employers on ‘no jab, no sick pay’ policies

Leading law firm, Howes Percival, is warning employers considering stopping company sick pay for unvaccinated staff who need to isolate, to seek legal advice before instigating any changes.

Depending upon employees’ existing entitlement to company sick pay, a “no jab, no company sick pay” policy could amount to a breach of contract if staff have not been consulted over the change.

The warning follows a change in the government’s Covid self-isolation rules* which require different isolation periods depending on an individual’s vaccination status. People with COVID-19 can end their self-isolation after five full days, provided they test negative on day five and day six. Fully vaccinated individuals identified as a contact of someone with Covid should continue to take daily rapid lateral flow tests for seven days but are not legally required to self-isolate. Unvaccinated contacts are legally required to self-isolate for the full 10-day period.

In addition to Statutory Sick Pay (SSP) – the minimum amount employers must pay – some employers offer company or contractual sick pay. The different isolation period rules mean that employers will potentially have to pay more to unvaccinated workers than vaccinated ones if they need to cover longer periods of sick leave.

Matthew Potter, Partner and employment law expert at Howes Percival commented, “Covid-related staff absences have put some organisations under intense pressure, leading them to introduce new sick pay policies relating to staff required to self-isolate. Previously, self-isolating employees were entitled to the business’s enhanced sick pay, (not just SSP) regardless of their vaccination status. However, the new policies state that unvaccinated employees (without mitigating circumstances) who have not tested positive for Covid but are forced to isolate because they have been in contact with someone who has, will only receive SSP in future.

“Unvaccinated staff may argue that reducing their sick pay is discriminatory, but if a business can prove that the policy is a proportionate means of ensuring they have adequate staff levels then this argument may not present an issue. Depending upon the existing entitlement to company sick pay and whether it is discretionary, any such change could amount to a breach of contract if staff have not been consulted over the change. Employees might even resign and claim constructive unfair dismissal.”

If a company intends to dismiss and re-engage staff if they do not accept a change to company sick pay entitlement, and there are 20 or more employees at any location or site, it could trigger the need to enter into collective consultation of 30 or 45 days depending upon the numbers involved.

Before making any changes to their sick pay arrangements, employers should seek advice and to consider both the current position as set out by the Equality and Human Rights Commission and ACAS.

Matthew Potter continued, “In recent weeks, we’ve seen several major companies, including IKEA, Ocado and Next, introducing new sick pay policies for staff needing to isolate due to Covid – removing or reducing the sick pay available to unvaccinated members of staff. Employers considering following suit will need to be able to objectively justify the proposed change and ensure they engage and communicate sensitively with their staff.

“There are various reasons why some people are unvaccinated – including medical conditions, religious belief, age and pregnancy, so a blanket ‘no jab, no company sick pay’ policy is inappropriate.  Taking individual circumstances into account will also help companies avoid costly discrimination claims.  

“The implications of companies’ decisions to change sick pay terms for unvaccinated employees remain to be seen. It could be that these policies encourage employees to get vaccinated, which could reduce time-off for Covid-isolation in the long-term. However, some sceptics have suggested that the new policies may simply lead to employees hiding the fact that they have been in contact with a Covid-positive individual, to avoid only being paid SSP.”

For more information on employment law related issues visit: https://www.howespercival.com/services/employment-and-hr/

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For further information please contact:

Gordon or Liz at MAW Communications on 01603 505 845

Notes to editors:

*Rules came into effect 17 January 2022 and only apply to England.

Howes Percival has offices in Cambridge, Leicester, Manchester, Milton Keynes, Northampton and Norwich.  It has 51 partners and 169 lawyers in total.

The firm is recommended in The Legal 500 – the authoritative guide to the UK’s leading law firms.  In the 2022 guide, no fewer than 11 different departments achieved the guide’s highest possible ranking (Tier 1): Corporate and Commercial; Dispute Resolution – Commercial Litigation; Dispute Resolution – Debt Recovery; Finance – Insolvency and Corporate Recovery; Human Resources – Employment Law; Private Client – Agriculture and Estates; Private Client – Tax, Trusts and Probate; Real Estate – Commercial Property; Real Estate – Property litigation; Real Estate – Environment & Planning;  Intellectual Property.