Another day, another tussle over employment status. In the latest round, an employment tribunal in Leeds has ruled that a group of Hermes couriers are workers, not independent contractors.
The decision means that the group of 65 workers are entitled to the National Minimum Wage (NMW) and holiday pay. And crucially, the Hermes couriers can now reclaim the unlawful deductions from their wages, made when they were classified as self-employed.
The case is the latest to be brought by the GMB union over the gig economy. The union has been active in its campaigning against what it sees as disguised employment by gig economy firms like Uber and Deliveroo.
This ruling affects the 65 Hermes couriers who have already brought claims, but is also likely to affect the wider network of 14,500 Hermes couriers who are engaged under the same contracts as the couriers.
There will now be a further hearing in the Employment Tribunal to calculate the exact amount of holiday pay, national minimum wage and any unlawful deductions due back that the couriers should receive.
Commenting on the decision, the GMB’s general secretary Tim Roache said, “This is yet another ruling that shows the gig economy for what it is - old fashioned exploitation under a shiny new facade.
“Bosses can't just pick and choose which laws to obey. Workers' rights were hard won, GMB isn't about to sit back and let them be eroded or removed by the latest loophole employers have come up with to make a few extra quid.”
Dave Chaplin, the CEO and founder of ContractorCalculator, an online portal that provides free advice and information to freelancers and contractors, noted that the decision won’t resolve the persistent problems around employment status.
“New judgements like we have seen today with the Hermes case, alongside the recent Pimlico Plumbers case, demonstrate a major problem whereby firms have forced workers into false self-employment.
“Perversely, the newly proposed reforms to tax the self-employed – known as Off-Payroll Working – will introduce rules that enable firms to classify self-employed workers as ‘employed for tax purposes’, whilst circumventing their obligation to give them employment rights. This directly opposes the intentions of the Government’s ‘Good Work Plan’ and is wholly unacceptable.
“To prevent this, Parliament must enact a very simple rule: self-employed workers classed as ‘employed for tax purposes’ should automatically receive full employment rights.”
The Hermes decision follows hot on the heels of the Supreme Court decision involving Pimlico Plumbers and a former worker named Gary Smith. Smith had worked worked as a well remunerated sub-contractor until a heart attack inhibited his ability to work.
Smith retroactively claimed worker status, enabling him to get sick pay. When he announced the decision, Lord Wilson said Pimlico’s terms “enabled the company to exercise tight administrative control” over Smith “to impose fierce conditions” on when and how much it paid to him.
Crucially, though, none of these judgments have laid down new principles in law. The confusion persists and it increasingly looks like a matter that only government legislation can untangle.
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.