Hermes couriers entitled to holiday pay and minimum wage after 'groundbreaking' gig economy deal

Drivers can elect to be paid an hourly rate of at least £8.55 and accrue pro-rata holiday pay of up to 28 days per year, delivery firm says

Couriers for delivery firm Hermes now have the option to take paid holiday and receive guaranteed earnings under a new deal that the GMB union hailed as “groundbreaking” for gig economy workers.

Hermes workers are self-employed and paid depending on how many deliveries they complete and the number of miles they cover.

A number of drivers have said that the companies’ targets mean they earn less than the minimum wage on some routes, once other costs are take into account.

Under the new “self-employed plus” agreement negotiated by GMB and the company, drivers can elect to be paid an hourly rate of at least £8.55. They will also accrue pro-rata holiday pay of up to 28 days per year.

GMB said the deal was the first of its type and reflected how the “world of work has changed”.

Drivers can opt in to the new contract which will not affect those who wish to retain their current self-employed status, Hermes and GMB said. Couriers that join the union will benefit from full representation.

But David Greenhalgh, head of the employment practice at law firm Joelson, said the deal was not the landmark precedent claimed by GMB.

"Hermes’ decision is more reactionary than anything, coming after a tribunal decision which found its drivers to be workers," Mr Greenhalgh said.

"For Hermes drivers, they now at least know where they stand, but the pressure for other gig economy companies to follow suit will be reputational rather than on the back of a new legal precedent having been set.”

Drivers for Deliveroo and Uber are among a growing number of gig economy workers fighting to have their employment status recognised so they can secure basic rights such as holiday pay, a guaranteed minimum wage and the right to collectively bargain.

Hermes is “showing that the gig economy doesn’t have to be an exploitative economy and we look forward to working with them through this groundbreaking agreement,” said GMB general secretary Tim Roache. “Other employers should take notice, this is how it’s done.”

Jason Moyer-Lee, general secretary of the Independent Workers Union of Great Britain, hailed the collective-bargaining agreement as a "victory for trade union representation in the so-called gig economy".

He added: "However, despite having lost an earlier tribunal case establishing that its couriers are entitled to employment rights, Hermes is only offering paid holidays to those who opt in.

"Because of the inequality of bargaining power and the ability to companies to induce or threaten workers out of rights, employment law cannot be treated as optional.”

Close to 3 million people working in the UK’s gig economy, according to a February 2018 report from the Department for Business, Energy and Industrial Strategy (BEIS).

This means they do not have the security of guaranteed hours, pay as well as employment benefits. Several gig economy firms have said this gives workers flexibility over when and how much they work. Critics say it amounts to exploitation and an erosion of workers’ rights.