Hermes agree new ‘self-employed plus’ status with GMB Union
In the latest development concerning employment status and the rights of those working in the ‘gig economy’, courier giant Hermes has reached agreement with the GMB Union to offer its couriers the option of being classified as ‘self-employed plus’.
‘Self-employed plus’ entitlements
In what the GMB describes as a ‘ground-breaking agreement’, couriers who choose to opt-in to the self-employed plus arrangement will receive additional employment rights and benefits such as:
- entitlement to paid holidays (pro-rata up to 28 day statutory minimum);
- individually negotiated hourly pay rates, (at least £8.55 per hour over the year);
- full GMB representation access, should they join the union.
The new status is optional and therefore, those who wish to remain within the pre-existing arrangements, with the ability to earn premium pay rates but without the new entitlements, are able to do so.
Those who choose to take ‘self-employed plus’ status will be under a greater level of control from Hermes, who in light of providing guaranteed hourly rates will require couriers to use software which enables Hermes to dictate the delivery routes taken to maximise efficiency.
Impetus for change
The agreement which in practice creates a new category of individual service provision follows on from Hermes’ defeat in the Employment Tribunal in June 2018. The Tribunal ruled that the claimants were ‘workers’, rather than self-employed, and therefore were entitled to additional benefits such as holiday pay and the minimum wage.
The High Court also held in December last year that Uber drivers were workers, as opposed to self-employed as Uber had argued. See our recent blog for details of this decision.
The Government has been consulting on changes to the law in relation to employment status, following the Taylor Review on Modern Working Practices to clarify the position, including a commitment to commission independent research into the issue (see our recent blog on the proposals here.) This may also have been a catalyst to Hermes altering arrangements, in anticipation of the likely changes.
Where does this leave us going forward?
The new status, although heralded as a break-through by the GMB and welcomed by those Hermes couriers who wish to benefit from the additional entitlements, does create additional questions to be answered, both from an employment law and tax perspective.
On the employment law front – where will the new category sit within the current classification framework of employee, worker and self-employed? The name ‘self-employed plus’ is perhaps a little deceptive, given the entitlements of those who adopt this status are more akin to those of a worker.
With regards to tax – currently those who opt in appear to still benefit from being considered as self-employed for tax purposes. However, it is likely that HMRC will be considering carefully the tax implications of the new arrangements. HMRC only recognises two employment statuses – employed and self-employed – and given the level of control and supervision associated with self-employed plus it may assert that the workers should be taxed as employees (in which case employer National Insurance contributions would also be due).
If you would like to discuss anything raised in this blog further, or have questions in relation to employment status more generally, please get in touch with your usual Brodies contact. Workbox users can access more detailed information on employment status here.
The post Hermes agree new ‘self-employed plus’ status with GMB Union appeared first on Brodies Blog.