European parcel delivery giant Hermes has introduced a new label for the nature of their workers’ contracts, namely “self-employed-plus” in a bid to reach a compromise with the courier’s union workers. An Employment Tribunal based in Leeds in June of last year held that Hermes couriers are ‘workers’ rather than being ‘self-employed’ as suggested by their job description.
This optional middle-ground which lies between being a ‘worker’ or an ‘employee’ allows Hermes drivers an entitlement to basic workers’ rights which include earning nine per cent above the national minimum wage and the ability to take annual leave on a pro-rata basis, both of which had previously not been automatic entitlements. Choosing a self-employed-plus contract also allows Hermes’ employees to join the GMB and benefit from union representation.
This development has come in the wake of many similar organisations, including Uber, Deliveroo and Pimlico Plumbers, whose ‘self-employed’ workers’ contract terms have been subject to scrutiny in the courts with regards to the distinction between workers and employees. This seems to conform to the recent tendency of employment tribunals to find some sort of employment status where there is any uncertainty.
A new issue arises from this third category with regards to taxation. Some commentators argue that since those on self-employed-plus contracts are still paying tax as if they were self-employed, and Hermes is therefore making no national insurance contributions on their behalf, there may be complications with how HMRC will view this sort of arrangement.
The majority, however, view this development with optimism and excitement at the possibilities of finding new modes of working within the gig economy. The general consensus among employment lawyers is that the boundaries between employed and self-employed status have become increasingly blurred in recent years, and this new ‘self-employed-plus’ contract provided by Hermes is a direct manifestation of the desire for clarity.