A deal between Hermes management and the union representing its parcel couriers represents a significant first step in addressing labour issues arising from the UK’s growing gig economy.

Hermes GMB deal

Courier company Hermes said it would offer its self-employed drivers better employment rights after concluding an agreement with the GMB union.

Under the deal, 15,000 couriers will retain the flexibility of their self-employed status, but will in future be able to opt for so-called ‘self-employed plus’ status.

Benefits such as holiday pay, and individually negotiated pay rates allowing workers to earn a minimum of £8.55 per hour through the course of a year, are now secure. Those who join GMB, which already has more than 600,000 members, will benefit from full representation.

This is the first such agreement in the UK to allow self-employed workers such benefits and while the deal is not perfect, it represents an innovative first step.

The new contract will not include sick pay. Couriers who opt for it will be required to accept routing software that dictates where they go first. Also, they may not earn the maximum rates they could earn under the existing agreement, which will still be available to those who decide to remain on it.

While the politicians have been debating how to deal with the issue, GMB and Hermes managed to work out an agreement which seems to be a better solution than anything anyone else has come up with so far.

Union pressure on gig economy companies

The agreement comes on the heels of an employment tribunal hearing in June 2018 which ruled that 200 Hermes couriers had won the right to be recognised as ‘workers’. The decision has been described as one of the most significant victories against the exploitation of self-employed workers.

The decision mirrors verdicts in cases brought against Uber, Addison Lee, City Sprint, Excel and eCourier. GMB has announced legal action against three Amazon delivery companies on the same principles.

Under employment law, ‘workers’ are guaranteed rights including holiday pay, the legal minimum wage, minimum rest breaks and protection against unlawful discrimination.

The gig economy and the UK parliament

Employment issues raised by the so-called ‘gig economy’ have been raised in the House of Commons for some time and these issues remain relevant for the UK labour market.

A government report published by the Department for Business, Energy and Industrial Strategy estimated that nearly three million people work in the gig economy, with courier services being the most common type of activity.

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In February 2018, a Downing Street-commissioned review called on the government to improve the quality of work for people on low pay. However, the government only pledged to consult on possible changes to the use of self-employment, which may not include changing the law.

 

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