'Ground-breaking' pay deal for couriers

Many of you will have seen in the news earlier this month that Hermes, the delivery firm, struck a deal with the GMB union to offer paid holiday and guaranteed rates of pay.

The move comes in response to mounting media and political pressure on companies to offer better employment conditions to those working in the gig economy.

A series of judgements over the last 18 months, as well as the publication of Matthew Taylor’s Good Work Plan have prompted companies to consider their positions.

Self-Employed Plus Status

Hermes announced its new ‘self-employed plus’ status on the 4th of February. The GMB called the deal "ground-breaking" and workers can now:

  • opt to receive up to 28 days of paid leave
  • choose pay rates of at least £8.50 an hour over the year

Following Specific Routes

Hermes's existing 15,000 couriers can deliver parcels in whichever order they choose and will be able to continue to do so if they take up the new arrangement.

New couriers wishing to take up the new ‘self-employed plus’ terms and benefit from the guaranteed hourly rate and holiday pay will have to follow routes specified by Hermes.

The company said that if it is guaranteeing hourly rates of pay, it needs to ensure that couriers are taking the most efficient route.

Opt In Basis

The GMB said that the collective bargaining agreement is on an opt-in basis and "will not affect those couriers who wish to retain their current form of self-employed status and earn premium rates".

Martijn de Lange, Chief Executive of Hermes UK says "We have listened to our couriers and are wholeheartedly committed to offering innovative ways of working to meet peoples' differing needs."

In Response to Matthew Taylor’s Good Work Report

Matthew Taylor, author of the independent review into working practices, told BBC Radio 4's Today Programme that Hermes' new arrangement could raise questions about whether it was "sustainable" as it may be of interest to HMRC.

"I'm afraid I think the HMRC...will be looking at this very closely because if somebody has most of the benefits of being an employee and if the 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 and they'll want the company in particular to be paying national insurance on those people," he said.

Hermes said it was "totally surprised" and "100% disagreed" with Mr Taylor’s comments. It said Hermes had received legal advice that under its new offer its couriers would remain self-employed.

Kate Fretten, Employment Partner

“Hermes appear to have taken the lead on the issue, liaising with the GMB. They have had the foresight to see that it is likely that there will be more judgements, and potentially legislation, on ‘gig workers’.

It will be interesting to see HMRC’s response in relation to National Insurance contributions, and also to see whether other companies either follow suit, or adopt a different approach.”

Naturally, we will keep you up to date with all developments as this rumbles on. In the meantime, if you have any queries or questions, please do not hesitate to email.

 

At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 Kate or Paul will be happy to discuss it with you.