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4 February 2019updated 23 Jul 2021 1:56pm

Hermes couriers win holiday pay – but what does it mean for the UK’s gig economy?

The delivery company will allow its workers fixed wages and paid leave.

By Anoosh Chakelian

Have we reached a breakthrough in gig economy workers’ rights? On the face of it, yes, as couriers working for the UK delivery firm Hermes have been granted paid holiday and guaranteed wage rates of £8.55 an hour minimum.

In a deal struck with the GMB Union – described as a “groundbreaking agreement” by its general secretary Tim Roache – the company is giving its self-employed delivery workers the option of a new “self-employed plus” status.

Now, if you want to work for Hermes as a courier, you have two options:

  • “Self-employed plus”: Receiving up to 28 days’ paid leave pro rata and at least £8.55 an hour of guaranteed wages, full GMB representation if you join the union, while being restricted to following “the most efficient” routes set by Hermes.
  • The status quo self-employed status: Earning premium rates, choosing your own routes, but without employment benefits.

This is what’s known as a collective bargaining agreement – unheard of in Britain’s wild west of courier and driver-powered gig economy businesses. Indeed, GMB calls it “the first ever recognition deal of its type”.

Both the union and Hermes call on other companies to follow suit. “The gig economy doesn’t have to be an exploitative economy,” says Roache.

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“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,” says Hermes UK CEO Martijn de Lange.

In reality, it was couriers – not Hermes – who pioneered this change.

A few years of bad press – with one mother in 2016 claiming she had no holiday and only three weekends off in seven years, was called back to work during her grandmother’s funeral despite arranging cover, and returned to work three days after giving birth – preceded legal action against the firm.

GMB planned in January 2017 to challenge Hermes, contesting the company’s claim that its then 14,500 couriers were self-employed.

Later that year, in October, couriers rebelled against the company by refusing – in a letter sent by GMB – to work a consecutive 20-day schedule over Christmas (for which they were asked to ensure cover if they were unavailable).

Eventually last June, an employment tribunal in Leeds ruled that a group of 65 couriers were entitled to minimum wage and holiday pay, and that it was incorrect to class them as unemployed.

At the time, Hermes indicated that it would appeal the decision. Instead, the company decided to enter into talks with GMB, which resulted in the latest deal for their couriers.

So in reality, this agreement will only be a game-changer for gig economy workers in general if other companies, like Uber – which is constantly losing legal bids on worker status and appealing – decide to stop spending legal fees fighting against the people they rely on and talk to them instead.

Also, there are other rights gig economy workers are fighting for. “Limb (b)” worker status, which the Independent Workers Union of Great Britain (IWGB) is seeking for Deliveroo riders (unsuccessfully so far), would offer protection against discrimination and pension rights as well as paid leave and a guaranteed wage.

While GMB says the Hermes deal reflects how “the world of work has changed and how employers can change with it”, it also suggests the future of employment rights is one of opting-in.

The majority of drivers and couriers for companies like Hermes, Uber and Deliveroo are said to prefer a flexible model where they pick their hours and routes, but we’ve seen repeatedly how this diminishes a worker’s autonomy and negotiating power. So while this breakthrough for trade union representation in the gig economy should be celebrated, the status of workers in such industries remains uncertain.

“Hermes is only offering paid holidays to those who opt in,” says IWGB’s general secretary Jason Moyer-Lee. “Because of the inequality of bargaining power, and the ability of companies to induce or threaten workers out of rights, employment law cannot be treated as optional.”

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