Employment Status – Hermes Deal

Hermes, the courier service, has agreed a deal with the GMB union under which its self-employed couriers will have the option to be afforded paid holiday and guaranteed rates of pay.

Hermes has created a “self-employed plus” status, which permits workers to opt to receive 28 days of paid holiday. Workers are also given the option to choose pay rates of at least £8.50 per hour over the year, which exceeds the current minimum wage (currently £7.83 per hour, rising to £8.21 in April).

In order to obtain these rights, new Hermes couriers will be obliged to deliver their parcels following routes specified by Hermes. Currently, Hermes couriers can deliver parcels following a route of their choosing and will remain able to do so even if they opt in to the new arrangement.

This arrangement will be operated on an opt-in basis, meaning that if couriers wish to retain their current self-employed status and earn premium rates, they will be able to do so.

One possible implication of the arrangement is that HMRC may find that it renders Hermes couriers liable to pay national insurance as an employee and Hermes liable to pay national insurance on these couriers.

This is an important development for employers operating within the so-called “gig economy”, particularly following recent related judgments and the Taylor review of modern working practices. Employment status, particularly that of ‘workers’ is on the government’s agenda so we will need to watch this space in this regard.