“Ground-breaking gig economy deal” for Hermes’ couriers
Hermes, the courier firm, has struck a deal with GMB the union, in relation to the employment status of its staff, in what has been described by GMB as a “ground-breaking gig economy deal”.
Hermes’ couriers are described as self-employed, and under the current arrangement, the couriers are allowed work flexibly, choosing their own route and hours worked.
Despite the flexibility offered, Hermes’ traditional model has been criticised – the couriers are deemed self-employed and so do not receive paid holiday, sick pay, parental leave or pension contributions. They are also not entitled to the National Minimum Wage, and in 2016, there were reports of Hermes’ couriers taking home less than £6 per hour. Similar arrangements at Uber and other courier companies have been successfully challenged by staff, so this move is a defensive play by Hermes.
The deal with GMB allows Hermes’ couriers to choose to become “self-employed plus”. Under the new arrangement, couriers will still be deemed self-employed by Hermes, but they will also be entitled to 28 days of holiday pay (pro-rated), and an hourly rate of at least £8.55 over the year. In exchange, the “self-employed plus” couriers will have to follow routes specified by Hermes.
The couriers do not have to sign up to the new deal and those who wish to remain under the traditional arrangement will be able to continue to deliver parcels in whichever order they want.
The new option has been lauded by Hermes and GMB. Tim Roache, GMB General Secretary has praised Hermes for demonstrating that “the gig economy doesn’t have to be an exploitative economy” and Martijn de Lange, Hermes UK CEO hopes that the move will “encourage other companies to reflect on the employment models they use”.
However, Matthew Taylor, the author of the Taylor Review – a government review of employment practices – has suggested that HMRC may view the couriers as employees for tax purposes. If this is the case, HMRC will expect to receive national insurance contributions from them and Hermes.
Hermes and GMB disagree with Matthew Taylor’s comments – GMB told the BBC that there would only be tax implications for those receiving a “full suite” of benefits.
In any event, it will be interesting to see what implications, if any, the new arrangement has on the tax and employment status of the couriers, and whether Hermes is successful in defending any claims either from staff or HMRC.