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Hermes Introduces 'Self-Employed Plus' Status

on Friday, 08 February 2019.

Following on the heels of the Employment Tribunal finding that Hermes couriers were workers and therefore entitled to National Minimum Wage and paid annual leave in 2018...

...Hermes has announced that it has reached a deal with the GMB Union to create a new 'self-employed plus' status for couriers. We previously reported on the Employment Tribunal back in July 2018.  

'Self Employed Plus' Status

It has been reported that Hermes and the GMB Union have reached a collective bargaining agreement, which will provide the option for Hermes couriers to choose to become 'self-employed plus'. While the details of the agreement are not known, the GMB have confirmed that couriers who opt-in will receive up to 28 days of paid holiday a year and be able to negotiate pay rates of at least £8.55 an hour. Those couriers who join the GMB will also benefit from full representation.

'Self-employed plus' couriers will not be paid sick pay and will need to follow routes set out by Hermes, rather than being able to choose the order in which to make deliveries as they currently do.

Couriers who choose not to opt into the model will retain their current self-employment status and continue to earn premium rates.

Martijn de Lange, Hermes UK CEO has said that "this new option allows couriers to retain the flexibility of self-employment […] and gives them the certainty of guaranteed levels of earning, the security of holiday pay and a strong voice".

While GMB are heralding the agreement as ground-breaking, it remains to be seen whether other employers will follow suit.

Some commentators have questioned whether this form of agreement causes further confusion around who is and who is not a worker or employee under the Employment Rights Act.   

It is also not clear what the tax implications of this arrangement are, with Matthew Taylor, author of the Taylor Review, commenting that HMRC would be looking very closely at the deal on the basis that "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."

What Next?

The agreement between GMB and Hermes demonstrates a different approach to the ever evolving legal position of those engaged in 'gig' economy work. It will be interesting to see if any other companies follow suit and whether HMRC and the Employment Tribunals will scrutinise the arrangements further.

For more information, please contact Michael Halsey in our Employment Law team on 020 7665 0842.

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