IKEA reduces sick pay for unvaccinated staff

Year Published: 2022

Should employers look at reducing sick pay for unvaccinated staff to save costs or to encourage vaccination? Senior associate Warren Moores takes a look at the legal impactions around this issue.

IKEA found itself on the receiving end of social media backlash when it announced today that it would pay statutory sick pay (SSP) only for unvaccinated staff who are required to self-isolate as opposed to contractual sick pay.

IKEA announced only co-workers fully vaccinated against Covid-19 or those with?mitigating circumstances will receive full pay for self-isolations. In a statement explaining the decision it went on to say; ‘Unvaccinated co-workers will be paid in line with our company absence policy for?self-isolation, with close-contact isolation being paid at Statutory Sick Pay.?We appreciate that this is an emotive topic and all circumstances will be considered on a case by case basis, therefore anyone in doubt or concerned about their situation is encouraged to speak to their manager.’


The law

If an employee is unable to work and is required to legally self-isolate, then the employer must pay SSP to any eligible employee. An employee does not have to be physically unwell during the self-isolation period to receive SSP. SSP is currently £96.35 per week. Some employers offer contractual sick pay (CSP) which goes over and above the statutory entitlements. The entitlement to CSP is often set out in an employee’s contract of employment and the full terms are normally further detailed in a policy, typically in the employee handbook. The terms are decided by the employer and often there is an element of discretion held by the employer but not always. If an employer wants to change the terms it would normally need to consult staff unless the change was allowed within the current terms.


IKEA’s decision

It is difficult to know from the information available what exactly is within IKEA’s current sickness policy. This would be key to the fairness of their decision. If IKEA is changing the terms of the policy then it should be collectively consulting with its 10,000 UK-based staff over the proposed changes. If it has failed in this respect then the consequences could be huge. Failure to collectively consult can lead to a protective award of up to 90 days’ gross pay per employee and on top of this some staff may seek losses in term of pay or even resign and claim unfair dismissal.

As with most employment situations, they are rarely straightforward. There may already be an element of discretion around contractual sick pay. It is not unusual to see policies with complete discretion over whether payment is made or even caveats such as where the absence is caused through the employee’s wilful neglect or own doing. These types of clauses are often open to interpretation. For example, is someone who suffers an injury whilst playing rugby taking a foreseeable risk of some injury during an entire season whilst playing? IKEA is keeping some discretion to determine a decision on a ‘case by case basis’, which we assume will be discussion around the reasons for not being vaccinated and knowledge of how the virus was contracted. Discretion is useful but in a large business it can become a burden which eats up management time and makes it difficult to maintain consistency, which is key with discretion.

Although this could be aimed to encourage staff vaccination and lower absence it may not achieve its aim and could overall have a negative impact on the business. It could take up too much management time investigating absences in detail to determine entitlement. It could also damage staff morale, in particular with those who are unvaccinated. However, the biggest impact could be felt not from staff but reputational damage. IKEA has already found itself on the receiving end of a social media backlash with #BoycottIkea trending today on the platform, Twitter.


Our view

Any employer considering implementing such a change should firstly check whether it falls within their existing policy. If not, employers should be seeking advice and then consulting staff over any proposed changes to their sickness procedures. Where more than 20 staff are affected collective consultation obligations may apply.

With any proposed detriment to unvaccinated staff it is always wise to ensure those who are medically except from vaccination are caveated. IKEA has got it right in the sense any employer or policy around this issue should allow an ability to look at cases individually. Whilst most staff will be double vaccinated, some staff will not be and have their own reasons for this and these reasons may relate to protected characteristics such as religion or pregnancy. Failure to consider these issues could lead to discrimination claims.

Employers should also consider the potential feasibility of the Government changing the self-isolation requirements in due course. There is already talk of lowering the self-isolation period to 5 days. This coupled with encouragement of staff to become vaccinated may be enough to assist employers through this difficult time whilst maintaining morale, productivity and their reputation.

If an employer is minded to make the change then it needs to be a well-considered one.


For more information on any aspect of employment law, contact Warren Moores on 0161 475 1225 or [email protected] 

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