Delivery companies such as Hermes that use self-employed courier drivers are going to need to re-think their business models according to a recent report from the Work and Pensions Committee.
The report into the ‘gig economy’ calls for self-employed workers to be reclassified as ‘workers’ to ensure their basic employment rights such as sick and holiday pay are protected. The report is compiled from the findings of the committee’s inquiry into the gig economy. The inquiry heard from such companies as Uber, Deliveroo, Hermes and Amazon as well as the drivers who work for them.
The report condemned the freedom that companies have to deny workers with the basic rights that come with being an employee or having worker status. It calls for a change in employment law to give self-employed workers from the gig economy more protection.
It said: “An assumption of the employment status of a ‘worker’ by default, rather than ‘self-employed’ by default, would protect both those workers and the public purse and would put the onus on companies to provide basic safety net standards of rights and benefits to their workers.”
The report dismissed the argument that flexible employment can only be delivered via self-employment as absolute fiction. “Profit, not flexibility is the motive for using self-employed drivers in these cases,” it said.
Here is a summary of some recent court cases from the report:
In October 2016, a tribunal ruled that two “test claimant” Uber drivers should be considered “workers”, not self-employed. The judgement referred to the “absurdity” of Uber’s proposition that the company’s role was limited to providing a platform for drivers to connect with customers. It stated this was “a pure fiction which bears no relation to the real dealings and relationships between the parties”. Accordingly, the judgement continued, “it is not real to regard Uber as working ‘for’ the drivers [ … ] the only sensible interpretation is that the relationship is the other way around”.
In January 2016, courts found in favour of Margaret Dewhurst, a self-employed courier for CitySprint, whose case centred on whether she could be considered a worker. The judge criticised CitySprint’s description of their self-employed courier model as “window dressing”. She found Ms. Dewhurst’s description of her working conditions more accurate than that provided by the company, concluding that she was “one courier working personally for one organisation at any one time and that any concept of her operating as a [self-employed] business is a sham”.
In February 2017, courts ruled that a plumber engaged on a self-employed basis by Pimlico Plumbers should be entitled to worker status. The plumber was not an employee because he was neither guaranteed work, nor obliged to accept it, and he also had some control over how he carried work out: for example, he could charge a mark-up on materials that he obtained and used on a job. He was, however, subject to a range of controls through the company: he had to wear a uniform, be available for work full-time, and conform to rules and standards. This was judged to be consistent with worker status.
The report came out as the HMRC steps up their inquiry into employment status if drivers at Hermes.
You can read the full report by the Select Committee on the gig-economy here