Hermes to face worker status challenge and HMRC investigation

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The latest high profile employment status tribunal claim is being brought by the GMB who are challenging the self-employed status of Hermes drivers.

The GMB is arguing that Hermes drivers (who are classed by the company as independent contractors) are workers and are therefore entitled to various employment rights including paid annual leave and holiday pay. This case follows on from the GMB’s success in the Uber case.

In the meantime, HMRC is also investigating the self-employed classification of Hermes drivers. This was triggered as a result of media reports suggesting that the company’s working practices did not reflect Hermes’ classification of its drivers as self-employed. It has been reported that HMRC has recently written to Hermes drivers asking them to provide evidence for the investigation, including written contracts and payslips and to attend one-hour interviews. “This will help us decide what your employment status is/was,” the HMRC letter says.

Earlier in May, the Work and Pensions Committee criticised the use of self-employment contracts by Hermes and other gig economy companies.

This case is yet further illustration that businesses using self-employed individuals need to carry out appropriate risk assessments to ensure that their workforce models are compliant and do not expose them to unacceptable levels of risk.

Our employment team have extensive experience of advising in this area. We have a handy checklist which helps us to consider the best approach to managing your workforce. If you would like a copy of this checklist or if you need any advice on a current concern please contact David Smedley or Andrew Rayment.