13.09.16 Courier company could face HMRC investigation over low pay and bad work practices

Delivery firm, Hermes, will be under an investigation from HM Revenue and Customers (HMRC) following complaints from couriers about low pay and unfair work practices, enforced by those who manage Hermes’ operations.

The request of an inquiry into the employment practices of Hermes comes following a report, by MP Frank Field, in which complaints from 78 current and former Hermes couriers explained that Hermes’ practice of employing its couriers as self-employed workers means that many workers are paid an hourly rate much lower than the National Living Wage (‘NLW’).

On 12^th September 2016, the Prime Minister, Theresa May, agreed to Frank Field’s request and so, HMRC will be invited to begin inquiries. As a first step, Mr Field is calling on HMRC to investigate whether self-employment is an accurate reflection of the reality of working practices at Hermes.

Hermes has responded to the report saying that the complaints represent a mere 1% of its work force and that the self-employment service agreements with its couriers are legitimate and were agreed with by HMRC in 2011.

However, Mr Field’s report strongly suggests that the couriers are given detailed instruction in relation to how they perform the work and so, are unable to choose how they perform work which a genuinely self-employed worker would be able to do. The report states Hermes couriers are given a set time to report for work on set days, as well as deadlines that must be met each day. Couriers are threatened with losing work if they require time off to see to a family emergency, for example. All necessary equipment is provided by Hermes and they provide uniforms.

The company currently has over 10,500 self-employed couriers who are paid on a “per parcel” basis. Some of which have reported earning a salary which equates to less than £7.20 per hour (current NLW rate). Many have also added that their monthly earnings, after fuel deductions, were less than £6.80 an hour, 40 pence lower than the legal minimum.

A HMRC spokesperson said,

“employers cannot simply opt out of the minimum wage by defining their staff as self-employed, even if the worker signs a contract to that effect” in response to the report.

This approved HMRC inquiry demonstrates Government are committed to explore false self-employment across the UK labour market and are ensuring that employers do not exploit workers by engaging them on a self-employed basis when working practices suggest otherwise.