Under the agreement with trade union GMB Hermes’ 15,000 drivers will continue to be self-employed but can opt into contracts with better rights. The collective bargaining agreement is on an opt-in basis, however, and "will not affect those couriers who wish to retain their current form of self-employed status and earn premium rates", the union reassured.
Under its new 'self-employed-plus' status Hermes workers can opt to receive up to 28 days of paid leave and choose pay rates of at least £8.50 an hour over the year – more than the minimum wage of £7.83 an hour, which rises to £8.21 in April.
New couriers wishing to take up the pay holiday terms will have to follow routes specified by Hermes, with the firm commenting that if it is guaranteeing hourly rates of pay it needs to ensure that couriers are taking the most efficient route.
Hermes UK CEO Martijn de Lange said: “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. We have listened to our couriers and are wholeheartedly committed to offering innovative ways of working to meet peoples’ differing needs.”
The deal comes after almost 200 Hermes couriers won the right to be recognised as 'workers' at an employment tribunal last Summer in a case backed by GMB.
Under current employment law workers are guaranteed rights including holiday pay, the legal minimum wage, minimum rest breaks and protection against unlawful discrimination. Similar cases have been brought against Uber and Addison Lee.
Speaking on Radio 4’s Today programme, Mick Rix, national officer of the GMB, said the case signals a ‘step change’ in the way employers and unions can negotiate: “Things have changed a lot in recent years. It’s a step change, and our trade union sitting down and doing a deal with Hermes shows other employers in the gig economy that you don’t have to have exploitative methods at work. You can sit down with a trade union and initiate an agreement that’s beneficial to all parties.”
He added that media coverage of exploitative working conditions in the gig economy had increased pressure on employers to improve workers' rights.
Also speaking on the Today programme, chief executive of the RSA Matthew Taylor, who led the government's review into modern employment practices, said that the case reflects recommendations made in his report.
“The clock was ticking on Hermes, because the GMB had taken a case against them that their drivers should be treated as workers and get worker rights. The government had made clear that it was going to implement recommendations from my report, which would have said the critical thing is whether or not a company exerted control and supervision over workers, and that probably would have meant that that court case would have been embedded in law.”
Taylor added that this could prompt a shift in the way trade unions operate: "While I commend the deal, will this mean a change in the trade union strategy? Because so far they have been fighting court cases pretty successfully to argue that people like couriers should be workers, which means that they should get statutory rights not just negotiating rights, so will there now be a shift where unions try to focus on getting collective agreements?”
Taylor added that this could also mean gig economy workers and those who employ them having to pay tax. “I think HMRC will be looking at this very closely. If somebody has most of the benefits of being an employee, and if an employer has most of the benefits of employing somebody, then the tax authorities will want the employee to be paying National Insurance as an employee,” he said.
In response, the GMB's Rix said that HMRC should act on behalf of workers as the ‘ultimate enforcer’ on the issue.
Neil Carberry, the Recruitment & Employment Confederation's chief executive, responded to the news by saying this should spark a discussion about how employers can offer 'fair' flexible work. "The deal announced today by Hermes is a great sign that both employers and unions can consider the needs of the flexible workforce in a way that offers staff both choice and protection," he said.
“We hope this is the start of a deeper dialogue around flexible work that moves away from demonising jobs that don’t conform to a nine to five permanent employment stereotype. Flexible working is hugely beneficial to companies and workers alike – but that flexibility has to be matched with fairness.”