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Hermes may face HMRC investigation

16th Sep 2016

The business minister Margot James has requested that HM Revenue and Customs consider launching a “proactive investigation” into the arrangements used by Hermes, which employs 10,500 self-employed couriers who are paid per parcel.

Couriers for the company told a Guardian investigation in July that some of them are earning levels of pay equivalent to below the £7.20 per hour “national living wage”. Others complained of a lack of job security whilst some said they felt forced to work through illness and bereavement to keep their rounds.

Because Hermes workers are classed as self-employed, the company is not obliged to pay the national living wage, which applies to workers or employees. James said that as part of its role enforcing compliance with the wage requirement, Revenue & Customs could establish whether the couriers were correctly classed as self-employed.

Frank Field, the Labour MP and chairman of the House of Commons work and pensions select committee, will send a dossier containing their claims to Theresa May, the prime minister, requesting government action to increase protections for self-employed workers in Britain’s fast-growing “gig economy”.

Hermes stated that it was confident its service agreements with couriers were legitimate self-employment and said this was confirmed by the HMRC in 2011, but that it would cooperate with any new investigation.

Field wants a government investigation into the use of self-employed workers at Hermes and other firms. The latest official data shows 83% of new jobs created in the UK between March and May were self-employed positions, which means they do not benefit from sick pay, paid holiday, pensions or employment protections.

The results of any HMRC inquiry into the self-employed status of the firm’s 10,500 contractors are likely to be closely watched by other firms in the so-called gig economy.