Hermes Couriers Found to Be Workers Despite Being Classed as Self-Employed
The Employment Tribunal (ET) held that despite the terms of their written agreement, Hermes couriers were in reality workers and therefore entitled to National Minimum Wage and paid annual leave.
Leyland and others v Hermes Parcelnet Ltd
A number of Hermes couriers brought claims for the National Minimum Wage, paid annual leave and unauthorised deduction from wages. These are statutory rights to which workers are entitled, but not those who are genuinely self-employed.
The ET had to establish whether the couriers were 'workers' within the relevant statutory definitions, and therefore entitled to these rights.
What Does the Law Say?
A worker is defined as an individual who has entered into or works under:
- a contract of employment, or
- any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract, who is not a client or customer of the individual
If a contract contains a genuine and unfettered right to substitute someone else to do the work in their place, there will be no personal service under part (b) of the test set out above and therefore the individual will not be a worker. However, a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent will be consistent with personal service.
The Tribunal's Decision
The key question for the ET was whether there was an obligation on the couriers to 'personally' perform work.
Under the terms of the written agreement, if a courier was unable or unwilling to undertake their deliveries, they had a right substitute someone already on the Hermes books ('a cover') or to find someone of the couriers choice ('a substitution'). Hermes argued that couriers had an unfettered right to use a substitute or cover.
However, the ET heard evidence that couriers needed permission to use a substitute and were sometimes told by their managers that they could not use the cover they proposed. The ET therefore found that Hermes retained the right to veto a courier's choice of cover or substitute and that this was consistent with an obligation to provide personal service.
The ET concluded that the written contract was not a true reflection of the contractual agreement. In practice, there was a clear obligation on Hermes to provide work and an obligation on the couriers to deliver services personally. Therefore they were considered workers.
What Are the Wider Implications?
This case follows the recent decision of the Pimlico Plumbers case in which the Supreme Court also found that the claimant was a worker, despite his contracts labelling him as self-employed.
Whilst this case highlights the continuing trend by the courts to look behind contractual terms to the reality of the situation in practice, much like the Pimlico Plumbers case, it is unlikely to set much of a precedent for future cases as it is very fact-specific.