Hermes' couriers offered ‘self-employed plus’ status in UK Hermes' couriers offered ‘self-employed plus’ status in UK

Hermes' couriers offered ‘self-employed plus’ status in UK
05 Feb 2019

Hermes will offer its couriers a guaranteed minimum wage and holiday pay as part of the UK’s first deal to provide gig economy workers with union recognition.

The company’s collective bargaining-based agreement with the GMB trade union means that its 15,000 workers will continue to be self-employed but can now choose to go for “self-employed plus” status, which offers them better rights than usual, if they desire.

The opt-in agreement enables the couriers to choose to receive up to 28 days of paid leave per year. They will also choose receive guaranteed pay rates of at least £8.50 per hour, which is higher than the current minimum wage of £7.83, although it is due to rise to £8.21 in April.

Those choosing not to opt in are entitled to “retain their current form of self-employed status and earn premium rates”, the union said.

New workers wishing to sign up to the ‘self-employed plus’ regime will be required to followed routes specified by Hermes. According to the BBC,  the firm said if it was guaranteeing hourly rates of pay, it needed to ensure that its couriers were taking the most efficient route.

Hermes UK’s chief executive Martijn de Lange told HR magazine: “We’re proud to be leading the way with this pioneering development, which we hope will encourage other companies to reflect on the employment models they use. We have listened to our couriers and are wholeheartedly committed to offering innovative ways of working to meet peoples’ differing needs.”

The deal follows nearly 200 Hermes couriers winning the right to be recognised as ‘workers’ rather than self-employed at an employment tribunal last summer in a case backed by the GMB.

But speaking on BBC4’s Today programme, Matthew Taylor, author of an independent review in 2017 into working practices, questioned whether the move could result in gig economy workers and their employers having to pay tax.

“I think HMRC will be looking at this very closely,” he said. If somebody has most of the benefits of being an employee, and if an employer has most of the benefits of employing somebody, then the tax authorities will want the employee to be paying National Insurance as an employee.”

GMB’s national officer Mark Rix responded that there would only be tax implications for those receiving a “full suite” of benefits.

But Taylor also added that the case could prompt a change in the way trade unions dealt with gig worker issues.

“So far they have been fighting court cases pretty successfully to argue that people like couriers should be ‘workers’, which means that they should get statutory rights, not just negotiating rights,” he said. “So will there now be a shift where unions try to focus on getting collective agreements?”

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Hermes will offer its couriers a guaranteed minimum wage and holiday pay as part of the UK’s first deal to provide gig economy workers with union recognition.

The company’s collective bargaining-based agreement with the GMB trade union means that its 15,000 workers will continue to be self-employed but can now choose to go for “self-employed plus” status, which offers them better rights than usual, if they desire.

The opt-in agreement enables the couriers to choose to receive up to 28 days of paid leave per year. They will also choose receive guaranteed pay rates of at least £8.50 per hour, which is higher than the current minimum wage of £7.83, although it is due to rise to £8.21 in April.

Those choosing not to opt in are entitled to “retain their current form of self-employed status and earn premium rates”, the union said.

New workers wishing to sign up to the ‘self-employed plus’ regime will be required to followed routes specified by Hermes. According to the BBC,  the firm said if it was guaranteeing hourly rates of pay, it needed to ensure that its couriers were taking the most efficient route.

Hermes UK’s chief executive Martijn de Lange told HR magazine: “We’re proud to be leading the way with this pioneering development, which we hope will encourage other companies to reflect on the employment models they use. We have listened to our couriers and are wholeheartedly committed to offering innovative ways of working to meet peoples’ differing needs.”

The deal follows nearly 200 Hermes couriers winning the right to be recognised as ‘workers’ rather than self-employed at an employment tribunal last summer in a case backed by the GMB.

But speaking on BBC4’s Today programme, Matthew Taylor, author of an independent review in 2017 into working practices, questioned whether the move could result in gig economy workers and their employers having to pay tax.

“I think HMRC will be looking at this very closely,” he said. If somebody has most of the benefits of being an employee, and if an employer has most of the benefits of employing somebody, then the tax authorities will want the employee to be paying National Insurance as an employee.”

GMB’s national officer Mark Rix responded that there would only be tax implications for those receiving a “full suite” of benefits.

But Taylor also added that the case could prompt a change in the way trade unions dealt with gig worker issues.

“So far they have been fighting court cases pretty successfully to argue that people like couriers should be ‘workers’, which means that they should get statutory rights, not just negotiating rights,” he said. “So will there now be a shift where unions try to focus on getting collective agreements?”

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

IRS warned to take action over growing US gig economy

Pressure mounts on UK government to regulate gig economy

Proposals for UK gig workers to pay income tax would 'cause confusion'

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