2019 is shaping up to be a crucial year in relation to the gig economy, following on from all of the developments in 2018. In the latest development, the courier company Hermes have confirmed that they are going to offer gig economy drivers enhanced rights. This follows on from the Employment Tribunal case in June 2018 where couriers were recognised as workers not self-employed contractors.
Hermes will now allow its couriers to opt into a ‘self-employed plus’ working model. This is not a legal definition, and there is no such status recognised in the law, it is an internal status agreed between Hermes and the GMB Union. Under the Company’s self-employed plus scheme, couriers will receive holiday pay (pro-rata up to 28 days) and individually negotiated pay rates that allow couriers to earn at least £8.55 per hour over the year – 9% higher than the current national living wage. In exchange for these entitlements however, couriers will be required to use software which dictates the routes that Hermes chooses for them.
In practice, any courier who opts to become self-employed plus will be under tighter control from Hermes. As this new status is optional there is no need for those couriers who wish to continue on their current arrangement to change, particularly as there are certain tax benefits to being self-employed.
This agreement is the first of its kind in the UK, however the term ‘self-employed plus’ is perhaps a misnomer, as on the face of it the rights afforded are similar to those of a worker.
In essence, this is a bespoke agreement which has been negotiated between Hermes and the GMB union to honour worker rights. It will be interesting to consider how HMRC view the tax implications of this agreement and whether there is now a sufficient degree of control over the couriers to attract National Insurance Contributions.
If you do have any questions regarding employment status or want to discuss any of the topics in this article then please contact your employment solicitor today.