There are many new and exciting developments expected in UK employment law next year. Here are some of the key cases to watch out for in 2022.

IR35

The UK's IR35 legislation ensures that contractors pay broadly the same income tax and National Insurance contributions as an equivalent employee.

HMRC v. Atholl House

A case involving journalist Kaye Adams who worked as a TV presenter for the BBC through a personal services company. The Upper Tribunal found that the contract with the BBC had to be viewed in the context of Ms Adams' overall career, during which she worked on a self-employed basis for various TV shows. The contract in question, despite taking up much of her time during the relevant tax years, did not produce the level of stability and economic dependency necessary to create a contract of employment when viewed as part of the constantly fluctuating market for freelance presenters.

HMRC's appeal against that decision is due to be heard by the Court of Appeal by 21 March 2022.

Holiday pay

The legal position on holiday pay seems to have been constantly changing in recent years and an upcoming decision in the Supreme Court may continue this trend.

The Court of Appeal described its own decision as "surprising" as it gave some part-year workers a perceived "windfall" entitlement to holiday pay.

Harpur Trust v. Brazel

Ms Brazel was employed as a part-time music teacher under a permanent contract but only worked part of the year. Her contract entitled her to the full-time equivalent of 5.6 weeks’ annual leave, which had to be taken during school holidays. The school paid her holiday pay on a pro-rated basis, in three instalments at the end of each term. Ms Brazel argued that her holiday pay should have been calculated using her average weekly earnings over the 12-week period immediately before her holiday was taken, in accordance with the Working Time Regulations (WTR) and the Employment Rights Act 1996 (ERA).

The Court of Appeal upheld the EAT's decision in Ms Brazel's favour, finding that the 12-week averaging method was correct despite the fact that it might produce anomalies entitling part-year workers to proportionately more holiday pay than an equivalent full-year worker.

The Supreme Court appeal hearing took place on 9 November 2021 and the judgment is keenly anticipated.

Employer liability

At common law, an employer is vicariously liable for the negligent acts of its employees if those acts are carried out in the course of their employment.

Chell v. Tarmac Cement and Lime Ltd

In this case, the High Court upheld the trial judge's finding that an employer was not negligent or vicariously liable for the actions of an employee whose practical joke unintentionally caused injury to a contractor at work.

The contractor, who appealed to the Court of Appeal, was engaged at the respondent's quarry site. Tensions had arisen between the contractors and the respondent's employees, which the appellant brought to the respondent's attention. A few weeks later, one of the employees struck an exploding pellet target close to the appellant, as a practical joke. The pellet exploded and caused the appellant to suffer a perforated eardrum, hearing loss and tinnitus. The appellant claimed that the respondent was vicariously liable for its employee's actions and directly responsible for his injuries by breaching its duty of care and failing to provide a safe working environment.

The High Court decided that the respondent was not liable as the acts of the employee were not within the field of activities assigned to him. The workplace had merely provided an opportunity to carry out the prank.

Although there had been tensions between the two groups, they were not significant enough to suggest a threat of violence and, therefore, did not give rise to a duty to take steps to avoid that risk. Even if there were such a duty, the respondent had not breached it. The respondent's general site rules were extensive and showed that it took health and safety matters seriously. Horseplay and practical jokes are not issues typically found in a health and safety policy and to expect employers to include them would be excessive.

The appeal was heard by the Court of Appeal on 24 November 2021 and the result of a reserved judgment is awaited.

Employment status

In 2021, the Supreme Court handed down a landmark judgment which confirmed that some taxi service drivers are workers and not independent contractors. In 2022, there are two more employment status cases to watch out for.

Baker v. Post Office

An Employment Tribunal (ET) case involving more than 100 postmasters and sub-postmasters, who run Post Office franchises arguing against their "self-employed" status. Seeking a finding that they are in fact "workers", the claimants employed arguments focusing on the extent of the control over their work, a line of argument that was important in the Uber v. Aslam case.

Worker status would entitle the postmasters to statutory benefits, including paid holiday, sick pay and pension rights. Although this case is currently only in the ET, the decision could have implications for 8,500 sub-postmasters around the country and may therefore go further. The Post Office flagged the case as a risk in its annual report, but stated that it was not in a position to quantify the potential implications.

Stojsavljevic v. DPD Group

Meanwhile, in the Employment Appeal Tribunal (EAT), the appeal in this case was heard in March 2021 but judgment was reserved and is expected in due course. The ET found that the claimants, working for a parcel collection and delivery business under franchise agreements, were not "workers".

The claim focuses on the question of whether the claimants' right to provide a substitute driver under their agreements was effectively fettered by stringent requirements imposed by the company before the claimants can engage any other drivers in their place. The requirements include that the drivers must be aware of the respondent's practices, be legally entitled to drive in the UK and be engaged for a minimum of 90 days. The ET found that these were minimum requirements and genuine terms for business needs, which did not act as a fetter to the claimants' right to engage a driver of their choice. The EAT's view will be important given the focus on substitution rights in recent cases.