Hermes is well known as messenger to the Olympic Gods, often depicted wearing a winged hat and sandals. Quick and cunning, Hermes was also said to be something of a trickster, outwitting other gods for his own satisfaction.
Hermes is also a parcel delivery company – a European operation which, according to Wikipedia, processes 200 million parcels each year. Following a damning report by MP Frank Field on Hermes’s place in Britain’s “gig economy”, Business Minister Margot James has requested HMRC to investigate their practice of using “self-employed” workers to deliver Britain’s online shopping to her doorsteps. Amidst copious accusations that Hermes have delivered to their workers all the disadvantages of self-employment, whilst denying them the benefits, the classicists among us may be wondering if their name is even more fitting than first thought.
But what, if anything, is wrong with using self-employed workers? Using self-employed workers can actually be mutually beneficial. The company need not pay National Insurance or pension contributions, and employment regulations covering minimum wage, holiday pay, sick pay etc. do not apply. Equally, the worker should gain more control over when, how often and how they work. They are their own boss, and so the benefit to them is the flexibility and freedom that comes with this.
So what is all the fuss about? The concern is, in today’s “gig economy” (think Uber drivers, Deliveroo messengers etc) the concept of “self-employment” is being pushed beyond its limits, with workers being labelled as self-employed, but treated as employees, thereby removing the benefits for the worker.
Whether or not someone is self-employed is determined not by the label they are given, but by the sum of a variety of factors which indicate one way or the other. By way of example, self-employment could look something like this:
- Pat is a delivery driver for TownRunner (TR). TR is not obliged to give him any particular number of deliveries and, equally, Pat can turn down any deliveries he is offered.
- Pat can deliver the parcels at whatever time of day suits him best, allowing him to make deliveries for a number of other providers. He can also send a substitute driver in his place if he wants to.
- Pat provides and maintains his own van to do his deliveries. He can negotiate his own fees, but risks making a loss one month if, for example, his van breaks down and needs repairing.
- At the end of each month, Pat sends TR an invoice for the number of deliveries he (or his substitute) makes that month. This does mean that if Pat is ill, he either has to pay a substitute or turn down the deliveries altogether. But equally, if he wants to go on holiday for three weeks next month, he can do! Pat pays his own income tax and National Insurance contributions.
On the face of it this sounds fair. However, what HMRC is being asked to investigate is the practice of imposing employee-like restrictions and controls on self-employed workers. Hermes has been accused, albeit by a relatively small percentage of their workforce, of doing just this. Allegations include threats of loss of work for employees who are unable to make a delivery due to illness, holiday or bereavement; reducing rates of pay whilst allowing no opportunity for negotiation; imposing strict deadlines for delivery (with obligations to work around limited depot opening hours) and penalising drivers by way of deductions from “bonuses” for errors, even when these have been caused by recipients not being at home, or the malfunction of the devices provided to drivers to log their deliveries.
Looking at the relevant factors, it could be argued that control and flexibility have been shifted back to the “employer”, and that to all intents and purposes, the self-employed workers are being treated like employees. Although HMRC have so far sanctioned this practice, it is this that they have been asked to review. Is it really right that a workforce which is controlled and restricted to that extent should still be denied employee rights? We will have to wait and see.
However, in the meantime, Frank Field MP has made a number of recommendations. Many of these recommendations seem fairly specifically targeted at Hermes. Others, however, are aimed generally at the gig economy, and it may be worth employers having them on their radar. Our new Prime Minister has stated on numerous occasions that she wishes to make “Britain a country that works not for a privileged few but for every single one of us.” Could this extend, one day, to rights for the self-employed such as minimum rates of pay, minimum standards enforced by those who contract them, and perhaps even the extension of certain employment rights (such as sick pay, holiday pay or unfair dismissal)? Given what has happened so far this year, anything is possible. Though perhaps not magic sandals.