Latest employment status case brought against delivery firm

The so-called ‘gig economy’ faces its latest employment tribunal claim.

The delivery company Hermes is being taken to tribunal by eight of their delivery drivers. Hermes categories their drivers as self-employed which means they are not entitled to employment rights such as minimum wage, paid holiday or minimum rest breaks. The drivers have commenced employment tribunal proceedings claiming they are actually workers who should receive worker rights.

The claim against Hermes follows a high number of similar cases against other employers within the so-called ‘gig economy’, including Uber and Deliveroo. Whilst the majority of these cases have resulted in a finding that the claimant was a worker, there is no guarantee that a similar decision will be made against Hermes. Instead, the employment tribunal will review all the facts of the case including any documentation, whether the delivery driver is subject to control, and whether there is a right to substitute another person to carry out the work. Importantly, the tribunal will look beyond any documents or labels given to the individual to examine how the relationship actually works in reality. If they find, in reality, the individual is treated as if they were a worker then they will go on to find the correct employment status is that of a worker. A decision which finds Hermes have categorised their workforce incorrectly could lead to a substantial financial claim as they will have to reimburse any shortfall in wages or holiday pay, as well as go on to provide these in the future.

Landmark employment status decisions are still awaited from the Court of Appeal, who have considered Uber’s appeal against the employment tribunal and Employment Appeal Tribunal decisions that their drivers are ‘workers’, and the Supreme Court who considered the status of a plumber working for Pimlico Plumbers back in February 2018. Whilst based on their own individual facts, these decisions may provide further guidance to employment tribunals on how to consider current case law factors and principles.

The issue of employment status is one which is not going to disappear for organisations. As part of their response to the Taylor Review of modern working practices, the government is currently consulting on how to provide greater certainty in this area, however, this may not result in any substantial legal changes or updates. For now, organisations need to ensure they are accurately reviewing how their relationships with staff are operated in reality to determine their correct status. Once identified, the employment rights which are applicable to that status need to be correctly applied to avoid enforcement action being taken against them.

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