13 February 2019 
Caroline Jones, Employment tax director
The issue of whether individuals are employees, workers or self-employed continues to be a difficult issue for those organisations engaging them. There has been a development this month, in the private sector, which may have wider implications in the future should organisations wish to adopt similar models.
Earlier this month the GMB union and Hermes announced that it had reached a deal to create a new 'self-employed plus' status for couriers. This is an opt-in model and will not affect those couriers who wish to retain their current form of self-employed status.
This agreement follows the Employment Tribunal (ET) case last July, Leyland and others v Hermes Parcelnet Ltd. A number of Hermes couriers brought claims for the National Minimum Wage, paid annual leave and unauthorised deduction from wages. Workers are entitled to these statutory rights but not those who are genuinely self-employed. The ET had to establish whether the couriers were 'workers' within the relevant statutory definitions, and therefore entitled to these rights. The ET heard evidence around substitution but given that the right to substitution was not unfettered, there was a clear obligation on Hermes to provide work, and an obligation on the couriers to deliver services personally it was found that the individuals were considered workers. Couriers who opt-in will receive up to 28 days of paid holiday a year and will be able to negotiate pay rates. Those workers who opt-in will not be paid sick pay and will be required to follow pre-set routes.
This agreement may cause further confusion about workers and employees and could give rise to HMRC considering the tax and NIC implications for those who appear to have most of the benefits associated with being an employee, but who are treated as self-employed for tax and NIC purposes.
