Gig economy – good news

Good news for the gig economy

In a bid to improve employment conditions for gig economy workers, Hermes, the consumer delivery company, has confirmed that it will allow its self-employed couriers the opportunity to take holiday pay and enjoy guaranteed earnings.

... but not everyone is impressed.

The ‘gig economy’ is very much in the news these days. But, what exactly does it mean? Essentially, it’s task-based employment. It’s where people work for themselves but are paid by a (usually large) service provider, carrying out a series of small tasks, such as food delivery or taxi trips. Instead of earning a ‘salary’, they’re paid per ‘gig’ – for each job they do. Examples include Uber and Deliveroo. The employment conditions are sometimes controversial, with the providers often accused of denying their ‘gig’ workers proper rights. However, one company claiming to lead the way towards a fairer system is Hermes.

Working with the GMB Union, Hermes has just announced a breakthrough deal for their couriers. From now on, they will be able to choose the option to have the status of ‘self-employed plus’. The benefits of the new scheme will include –

The GMB union have announced how proud they are to have been instrumental in setting up this new agreement. Hermes themselves are delighted with the proposal. Others, such as HR Consultancy, Croner Consulting, are sceptical in their response, whilst IPSE, the Association of Independent Professionals and the Self-Employed are downright hostile.

First ever recognition deal of its kind

The GMB has declared that this collective bargaining agreement is the first ever recognition deal of its kind. The aim of the arrangement is to support the rights and improve the quality of life for approximately 15,000 self-employed Hermes couriers.
GMB General Secretary, Tim Roche stated, ‘This is an opt-in model and will not affect those couriers who wish to retain their current form of self-employed status and earn premium rates, as has been the case for the past 20 years.’

Hermes UK CEO, Martijn de Lange, declared, ‘This new option allows couriers to retain the flexibility of self-employment we know is so important to them and gives them the certainty of guaranteed levels of earning, the security of holiday pay and a strong voice.
‘We’re proud to be leading the way with this pioneering development which we hope will encourage other companies to reflect on the employment models they use.’

Roache continued saying, ‘Full credit to Hermes. They’re showing that the gig economy doesn’t have to be an exploitative economy and we look forward to working with them through this ground-breaking agreement.
‘Other employers should take notice, this is how it’s done.’

Matching Flexibility with Fairness

Paul Holcroft, associate director at HR specialists, Croner Consulting said, ‘This announcement reaffirms the importance of ensuring that the ability to work flexibly, an increasingly popular option within the modern workplace, is matched with fairness. Although ‘self-employed plus’ is unique to Hermes and employers are under no legal obligation to introduce something similar, it would seem to be the latest development in the long-running struggle that employers are facing in regards to the gig economy and false labeling of employment status.

‘Instead of arguing that the relationship between Hermes and its drivers reflects that of an employee or worker the Union seems to have taken a new approach here, negotiating directly with Hermes for additional rights the drivers can receive.

‘While this scheme is likely to be positively received by some self-employed drivers associated with Hermes by offering them more security whilst allowing them to maintain flexibility, employers should bear in mind that this should not be approached as a way of trying to avoid an accusation of false labeling. It should be remembered that the rules surrounding employee status still apply regardless of any compromises or agreements that have been reached with the operatives in question.

‘It will not be enough to simply pick and choose which rights should be provided to an individual; if they are labeled self-employed but the actual relationship reflects that of a worker or employee, employers will be expected to facilitate their appropriate entitlements.
‘This includes the right to holiday pay, the national minimum wage, rest breaks and protection from discrimination, something not available to self-employed individuals.

‘Employers should also note that the ongoing debate surrounding the gig economy is far from over, with the government recently announcing that it intends to evaluate the effectiveness of the current law surrounding employment status in response to Matthew Taylor’s Good Work Plan.’

‘No way a new deal for the self-employed’

What do the self-employed themselves think of the announcement? IPSE is the Association of Independent Professionals and the Self-Employed. Their Director of Policy is Simon McVicker. He is less impressed. ‘We do not believe Hermes drivers are or have ever been self-employed, so in no way is this a ‘new deal for the self-employed’.

‘The line between employment and self-employment is blurred, and the debate extremely complex, but we have considered the Hermes example very carefully and come to the conclusion that their couriers are not self-employed.

‘By creating ‘self-employed plus’ status, Hermes is muddying the waters of employment status even further. Of course, it is an imperative to protect people with an uncertain working status, but this is not the way to do it. It should not be up to multinationals like Hermes to create new statuses and effectively decide UK employment law. Instead of creating this new and unnecessary status, Hermes should simply give their drivers the full package of benefits they are entitled to.

‘We believe the way to clear the confusion about employment status is for the government to write into law a statutory definition of self-employment. At the moment, there is a legal definition of both worker and employee status, but nothing for the self-employed. A statutory definition would not only protect legitimately self-employed people but also ensure falsely self-employed workers have the rights and protections they deserve.’

Help and advice for the self-employed

Do you work in the ‘gig economy’? Are you an agency worker? Are you self-employed? Are you unsure as to your employment status? Don’t worry! We’re experienced accountants who take the personal approach. We use our vast experience and know-how to help individuals to make the most of their position and of the income they earn.

We’re here to help.


This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.

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