Minister invites HMRC to consider investigation into pay practices at Hermes


Courier organisation Hermes may be the subject of an investigation by HM Revenue and Customs (HMRC) following allegations around its employment practices, including pay for couriers.

Margot James, parliamentary under secretary at the Department for Business, Energy and Industrial Strategy, has invited HMRC to consider investigating working practices at Hermes.

The invitation comes in response to a letter sent by MP Frank Field in July 2016 to Prime Minister Teresa May, which outlined complaints made to him by couriers at Hermes.

In a report published today (12 September 2016), Wild west workplace: self-employment in Britain‚Äôs ‚Äėgig economy‚Äô,¬†Field and co-author Andrew Forsey¬†detail testimonies from 78 current and former Hermes workers.

The report states that some couriers, who are classified as self-employed, are paid an hourly rate below the national living wage of £7.20 an hour for those over the age of 25. It found that some drivers were paid the equivalent of £6.80 an hour.

Under their self-employed classification, it is not mandatory for the couriers to be paid the national living wage. They are also not entitled to certain employment rights, such as paid annual leave.

Hermes, who has 10,500 couriers, states that it has voluntarily set its minimum pay standard at £7.50 an hour, above the national living wage rate, and that the average courier pay rate is £9.80 after expenses.

The report recommends that organisations operating in the gig economy guarantee minimum daily and weekly rates of pay to couriers, as well as clarify the length of the standard working day and adjust earnings calculations to to take into account the time it takes for couriers to prepare and execute their daily rounds. The report also recommends that couriers should be provided with a genuine opportunity to negotiate their workload and rates of pay.

Hermes has introduced a complaints process and will roll out a code of conduct in September 2016. At the end of the month, it will also establish an external ombudsman service to make independent decisions on matters referred to it.

A Hermes spokesperson said: “We are unable to comment on the allegations In Mr Field’s report without knowing more detail. However there are around 10,500 couriers providing services to Hermes and yet only 78 current and past couriers, less than 1%, have commented in this report. Over a third of our couriers have been with us for more than five years and two thirds for more than two years. That said we would invite each of the couriers in the report to come forward to discuss any issues they have with us and we will commit to investigating them fully.

Sign up to our newsletters

Receive news and guidance on a range of HR issues direct to your inbox

This field is for validation purposes and should be left unchanged.

“We do not believe that this report reflects the way our organisation operates. While it is commonplace for those who are self-employed to have to find a substitute if they are unable to fulfil their work, we are committed to ensuring that everyone at Hermes operates in a supportive and compassionate manner. If we find these standards have not been met, we will take appropriate action.

Field said: “This is the first practical move the Prime Minister has made to begin implementing the promise she made on entering Downing Street that there will be no one left behind in this country. Woe betide those employers who think they can beat government moves to guarantee a decent minimum for everyone.”