When the doorbell rings at home with your latest delivery from the virtual high street, there is a decent chance it could be Hermes delivering your parcel. Last year, around 200 couriers successfully took the delivery service to an Employment Tribunal alleging they had been denied basic workers’ rights. Following on from this, the GMB Union who helped represent the employees reached a deal with Hermes to give its wider workforce the option to receive guaranteed earnings and holiday pay if they opt to become “self-employed plus”.
So why argue you want to be a “worker”?
A “worker” has far more protection than someone who is self-employed. For example, a “worker” is entitled to statutory sick pay if unwell, annual leave, national minimum wage and rest breaks, whereas someone who is self-employed is effectively in work on their own account. However, a “worker” is not an “employee” and has less rights, so a worker cannot claim unfair dismissal for example.
Last year, the couriers won the right to be recognised as “workers” but Hermes has been considering whether to appeal to the Employment Appeal Tribunal.
After continuing with business as normal for some time, Hermes reached a deal with the GMB and has now confirmed it will not appeal the Tribunal’s initial decision. It is likely Hermes also gave consideration to the fact that its merits of winning any appeal may be slim. A spate of recent cases, against the likes of UBER and Deliveroo, have fallen in the favour of individuals successfully arguing they are “workers” and are not self-employed.
Under the agreement with the GMB Union, Hermes’ fifteen thousand drivers will continue to be self-employed but can opt for “self-employed plus” status which guarantees wages and provides holiday pay. The full details of how this will work is not yet clear, but couriers who opt in may have to follow specific delivery routes dictated by Hermes instead of delivering parcels in any order, as they can do currently. Couriers who don’t want to opt in and instead wish to remain self-employed can do so and have been told they may receive higher hourly pay but not a guaranteed minimum wage or holiday pay. They won’t have guaranteed hours and will be able to work flexibly when they want.
Is “self-employed plus” really an employment status?
“Self-employed plus” is not a recognised legal status in employment law. Hermes are under criticism because they have essentially lost a tribunal claim regarding their couriers entitlement to “workers” rights, yet they are effectively treating this as optional by only offering paid holidays and guaranteed minimum wage etc. to those who opt in.
Only an Employment Tribunal can determine a person’s employment status and the tribunal will always look beyond the contract and into the inner workings of the relationship including expectations and controls by the company. Indeed in all the above mentioned cases, the contractual documentation made it clear the individuals were self-employed but Employment Tribunals determined otherwise.
How much protection does this give Hermes?
For those who choose to stay self-employed, unless Hermes changes the way they work with those individuals, a tribunal is unlikely to deem the fact someone has decided not to opt in as a bar to arguing “worker” status at a later stage, although it may be taken into account. This could still leave Hermes open to back-dated claims for holiday pay. For those who do opt in, if Hermes do not give full “worker” rights or even back dated pay, some workers may choose to progress with their own individual claims, however this could be complicated if the GMB has effectively agreed a deal on behalf of members which sometimes can impact non-members. Additionally, HMRC is yet to have its say. HMRC is aware an Employment Tribunal has ruled that the couriers are actually “workers” and therefore regardless of whether they have now opted in or out, surely each “worker” should be paying PAYE with Hermes making the additional employers’ contribution of 13.8%.
Therefore, whilst the agreement with the GMB and the creation of “self-employed plus” appears to be a creative way to deal with the needs of a flexible workforce, it will be interesting to see if this is challenged at a later date and how HMRC and the Employment Tribunal will view this arrangement.
If you are self-employed or a business employing self-employed individuals and would like to know more about what tribunals take into account when determining employment status and how this applies to you or your business, please contact Warren Moores, in our Employment Law & HR team on 0161 475 1225.