This is the latest of a series of cases about employment status in the 'gig economy', and has led to further calls for the Government to bring clarity into this grey area. (See: High Court gives trade union right to challenge Deliveroo and Plumber case throws spanner in works of self-employment status - Shout99, June 2018)
The Leeds Employment Tribunal found that a group of Hermes couriers were workers and were entitled to receive the National Minimum Wage and holiday pay.
The tribunal ruled a group of Hermes couriers were not independent contractors, as Hermes argued, but are in fact workers who are entitled to essential workers’ rights.
These include the right to be paid the National Minimum Wage, receive paid holiday and reclaim unlawful deductions from their wages.
The ruling affects the 65 couriers that have already brought claims, but is also likely to impact upon the wider network of 14,500 Hermes couriers who are engaged under the same contract as the couriers.
There will now be a further hearing in the Employment Tribunal to calculate the holiday pay, national minimum wage and any unlawful deductions due back that the couriers should receive.
The couriers were supported by trade union, the GMB, who described it as a 'landmark win'. The GMB has brought a number of similar challenges against firms who operate a gig economy business model - and has others in the pipeline.
Tim Roache, GMB General Secretary, 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’ right 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.
“Not only will this judgement directly affect more than 14,000 Hermes couriers across the country, it’s another nail in the coffin of the exploitative bogus self-employment model which is increasingly rife across the UK.”
IPSE - Uncertainty
While this decision has about protecting vulnerable workers, there are increasing concerns in the contractor market-place about the grey area over self-employment.
Freelancer group, IPSE, again called on the Government to write into law a positive definition of self-employment to provide clarity on who is and who is not genuinely self-employed.
IPSE’s Director of Policy Simon McVicker said: “The uncertainty about who is and who isn’t genuinely self-employed must stop.
“It is unacceptable that policymakers are relying on costly, time-consuming court cases as the first port of call in determining employment status.
“IPSE is calling on the Government to write into law a positive definition of self-employment.
“This would provide peace of mind to the self-employed and companies looking to engage them.
“It would also prevent companies from universally declaring that everyone is a contractor when they should be considered workers or employees.
"We should be cautious, however, not to take this case as being representative of the ‘gig economy’ or wider self-employment, and then try to regulate these ways of working into oblivion.
“The reality is that the vast majority of self-employed engagements are what they claim to be: genuine business-to-business engagements which are beneficial to both parties, and to the wider UK economy.”
Qdos - Complex
Contractor tax experts, Qdos Contractor, warned that the gig economy should not be confused with the world of freelancers and contractors,
Qdos Contractor CEO, Seb Maley, said: “This is an important victory for the growing number of gig economy workers, many of whom do need greater protection and employment rights.
“It is however, important not to not confuse the gig economy with the growing number of freelancers and contractors in the UK who, very often, do not want employment rights.
“There are big differences between gig economy workers and self-employed contractors for example, and it’s time employment law made this more obvious.
“To avoid these situations, each party must be certain of a worker’s employment status before the arrangement starts. If anything, the Hermes verdict is yet another reminder that complex employment law needs simplifying, and fast.”
“Genuinely self-employed workers should be in control of their own status, and not have it forced upon them, as The BBC has reportedly done to many presenters it engages. After all, this can have huge implications on accuracy of tax status and the amount of tax the worker and the engager must pay.”
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Susie Hughes © Shout99 2018