Possible HMRC investigation into Hermes working practices

Business minister Margot James has asked HMRC to consider an investigation into courier firm Hermes after some of its 10k staff complained that they are paid below the Living Wage set by the government.

As with many other courier firms, the delivery staff are registered self-employed. They are paid per delivery and the fee depends on a parcel’s size and the nature of the delivery round. Those in rural areas receive a higher piecework bounty. One seller on BBC Radio 4’s You and Yours Programme* this week said that because he was required to work 6 days a week and prohibited from doing other work that he was, in fact, an employee.

78 current and former Hermes couriers made submissions about working practices to the House of Commons work and pensions select committee chaired by MP Frank Field. He has been quoted in the press saying Hermes enjoys “almost exclusively the benefits of self-employment, namely that it is not obliged to pay employers’ national insurance and pension contributions, and is not covered by employment regulations covering the national living wage, holiday pay and sick pay. Yet the couriers themselves are enjoying few, if any, of the benefits.”

Hermes have vigorously denied the claims and say: “We have chosen to exceed the national living wage and have set our minimum standard at £7.50 per hour, taking into account any expenses the couriers may accrue. We are confident in the accuracy of our courier pay model and our records clearly show that our average courier rate is £9.80, 36% above the minimum wage, after all legitimate expenses have been deducted.”

Earlier in the year Hermes also established what they call the “service provider complaints panel” which exists to assess grievances from delivery staff. So far, of 36 applications, 16 have been upheld.

The question here is whether you can be truly self-employed under the terms of the Hermes arrangements. We’ll see whether HMRC chose to investigate and how this pans out.

*Story at 27.21. UK only. And it will expire.