Hermes couriers were granted ‘self-employed plus’ status this month after a deal was struck with the GMB union. As such they are now entitled to receive the statutory annual minimum of 28 days paid holiday and are able to opt for hourly pay rates of £8.50 over the year.

But Hermes’ collective bargaining agreement requires couriers to opt-in, so workers can continue to earn a premium rate as a self-employed courier if they wish, according to Mark Rix, GMB’s national officer.

It has been argued by tax experts that this could mean new national insurance obligations for the workers in question, but this is refuted by Rix, who says only those who receive “a full suite” of benefits would be liable to contribute in this way.

All those who do opt to become ‘self-employed plus’, will be subject to more stringent rules from Hermes – for example they will have to take the most efficient delivery routes, and software will be put in place to monitor this.

The move, which is effectively the creation of a new employment status, has been described as “muddying the water” by critics including Simon McVicker, the director of policy and external affairs at the Association of Independent Professionals and the Self-Employed. He argues the drivers in question should instead simply be given the full range of benefits they are entitled to.

It follows Hermes’ defeat in the Employment Tribunal in June 2018, when it was ruled the claimants were not self-employed but ‘workers’ and therefore entitled to holiday pay, minimum wage and other similar benefits.

Elsewhere, in a similar case last December the High Court held that Uber drivers were workers as opposed to self-employed. Furthermore, changes in the law relating to employment status have recently been the subject of government consultation, which follows the Taylor Review on Modern Working Practices to clarify the position, and a commitment to commission independent research relating to the issue. These may well have proved the catalyst for Hermes to alter arrangements, in anticipation of changes.

Looking forward, the Hermes decision leaves law-makers with new questions to be answered, both from employment law and tax perspectives. One can only speculate as to where the new ‘self-employed plus’ category will sit within the current classification framework of self-employed, worker and employee. And given that the entitlements of a ‘self-employed plus’ worker are most closely aligned to those of a worker, is the name not a little deceptive?

In tax terms, it is surely highly likely that HMRC will have to take the tax implications of the new employment status into account, and may consequently assert that the ‘self-employed plus’ workers in question should be taxed as employees (which would mean they would also be subjected to National Insurance contributions).

If you have any questions about this or any other legal matters discussed on the Britton and Time website, please don’t hesitate to get in touch.

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