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TEAM News

Hermes Offers Couriers Paid Holiday and Guaranteed Wages in 'Ground-Breaking' Pay Deal

Hermes, the delivery company, has entered into a deal with the GMB union (the “GMB”) to offer couriers paid holiday and guaranteed wage rates. Under its new “self-employed plus” regime, workers can opt to receive at least £8.55 an hour along with up to 28 days of paid annual leave. The GMB has heralded the deal as “ground-breaking”.

Hermes has around 15,000 existing couriers and the couriers are able to deliver parcels in whichever order they want. The new arrangement allows for this to continue for existing couriers; however, new couriers wishing to take up the new pay holiday terms will have to follow routes specified by Hermes. This is to ensure that the most efficient routes are being followed.

The new arrangement forms part of a collective bargaining agreement and is on an opt-in basis. It will not affect those couriers who wish to retain their current self-employed status and earn premium rates.

On the other hand, questions have been raised about the tax implications for the so-called “self-employed plus” status. Matthew Taylor, author of the Taylor Review of Modern Working Practices 2017, has commented that the scheme may be of interest to HMRC as it may be that HMRC considers the workers on the scheme to be employees. This means that Hermes and the workers may be required to pay national insurance as employees.

Hermes has disagreed with Matthew Taylor, however, and argues that the couriers will remain “self-employed” under the new scheme. Only time will tell if the “self-employed plus” regime will have any adverse consequences!

This arrangement comes shortly after the Court of Appeal confirmed that Uber drivers are in fact “workers” for the purposes of the Employment Rights Act 1996. It suggests that employers are reacting to the decision and are taking steps to ensure that they will not face similar employment tribunal claims.

This bulletin is for general guidance purposes only and should not be used for any other purpose.

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