Gig economy confusion must stir the government into life

Hermes couriers given employment rights following court case

Another week and another case in which gig economy workers found themselves battling for employment rights. This time, an employment tribunal ruled that 65 Hermes couriers classed as self-employed workers should be entitled to minimum wage and holiday pay after it was decided the working arrangements were in line with employment.

Given Hermes engages around 14,500 self-employed couriers, this verdict could prove to be an important case for all gig economy workers who often sit precariously between employment and self-employment, but realistically need rights from the companies they provide a service to.

In fact, the wider implications of this case are expected to be so significant that the head of the union representing the couriers described the verdict as, “another nail in the coffin of the exploitative, bogus self-employment model which is increasingly rife across the UK.”

That gig economy cases are no longer few and far between makes it hard to disagree. And the Hermes verdict is the most recent of many, with Deliveroo, Pimlico Plumbers, Uber, Addison Lee, and CitySprint tribunals each strengthening the argument for the simplification of unclear employment law, and fast.

The alarming regularity of gig economy cases also goes some way to validating the widely held view that genuinely self-employed workers should be in control of their status, and must not have it forced upon them.

Clearly, a small - but significant nonetheless - proportion of companies engaging workers under self-employed status seem keen to do so because it suits them financially, with these companies overlooking the fact that many of these working arrangements tend to resemble employment.

Employment status decisions must be collaborative, and an engager should not be able to use its weight, reputation or position of power to make a decision that only suits them. If anything, the Hermes case makes the case for joined up thinking even more prevalent.

It also highlights just how important it is that genuinely self-employed workers - freelancers and contractors - have a say in all of this. After all, most contractors, unlike many gig economy workers, are not calling for protection in the form of employment rights, more for the accurate setting of IR35 status following public sector reform.

Of course, employment status for employment law and tax differ, and one should not impact the other. But the reality is, the lack of clarity around the employment status of genuine self-employment workers does not help inexperienced public sector engagers when making IR35 assessments.

With the Government considering private sector IR35 changes, the number of risk-averse and incorrect status decisions could well climb, at least in the immediate aftermath of speculated changes anyway.

When working inside IR35, contractors are considered ‘employed for tax purposes’ and pay similar taxes to employees, all without receiving any employment rights. So in this respect, it is contractors who yet again receive the hard end of the stick.

This in itself is something else for the Government to take into consideration if and when they review the relationship between employment status, tax status and employment rights. If a worker is deemed employed for tax purposes then it is entirely logical and fair that they should be offered employment rights in return.

In fact, the current IR35 legislation and its relationship (or lack of relationship) with employment rights contradicts the Government’s ‘Good Work Plan. 89% of contractors surveyed by Qdos Contractor clearly agree, and have called for employment rights when working inside IR35.

If the Government truly wants to create a ‘fairer’ tax system - which is incidentally a word used to justify recent IR35 changes - then they must offer employment rights to those working as ‘employed for tax purposes’.

UK self-employment is a melting pot of 4.8million independent workers with vastly different priorities. Ultimately, the Hermes verdict is the latest incident in a long line of cases that signal the need for this diversity - which is often celebrated by Government - to be recognised better in employment law and tax status.