Will the Hermes Union deal lead to more rights for gig economy workers?

Gig economy workers could now receive more rights following a recent deal that was the first of its kind for a UK business. Coodes Solicitors’ Employment team shares insights.

In a first for the UK, the courier company Hermes has agreed to a deal with the GMB Union to offer more protection to its 15,000 gig economy workers. Drivers will now receive guaranteed minimum wages and holiday pay. Although the drivers will retain their self-employed status, they can opt in to contracts that offer more benefits.

The deal was made following an employment tribunal brought about by a number of Hermes couriers. The tribunal found the couriers were workers at the company despite the fact that they were classed as self-employed.

The couriers were deemed to be controlled by Hermes and had little autonomy. The tribunal also held that Hermes and the drivers in question had a ‘dependent work relationship’ and the drivers had an obligation to perform services personally. Although the courier had the right to find a substitution to fulfil their commitment to perform the service, Hermes retained the right to veto that substitution and the courier had to ensure a certain standard of service.

In June 2018, the tribunal ruled that the individual drivers were in fact workers. This decision has now led to the recent deal with the Union, with greater rights now being offered to the entire Hermes workforce.

Is the tide turning on the gig economy?

The groundbreaking developments at Hermes may pave the way for other businesses to offer similar deals, benefits and rights to their own gig economy workers.

The gig economy is a way of working made up of short-term contracts or freelance work, as opposed to permanent or contracted job roles. Workers are often paid for each of the tasks or ‘gig’ they perform instead of earning a regular hourly wage. These types of jobs could include drivers, couriers and food delivery riders. This approach to work has proved controversial. It offers many benefits including flexibility in working hours. On the other hand, it provides very little protection to workers in terms of holiday, sick pay and hourly pay.

The Hermes announcement comes just weeks after the UK Government announced its intention to overhaul the gig economy. The Good Work Plan sets out important changes to offer more protection to agency workers and employees on zero hours contracts.

While it is not yet clear exactly what new legislation will come into force, it seems very likely that we will see a number of changes affecting the gig economy in the months ahead.

Our Employment team provide support to businesses helping them keep ahead of recent changes in Employment Law. If you need some friendly advice, call Steph Marsh on 01579 324 017 or send her an email.