Union takes legal action against delivery courier Hermes
ITV News has learned that the GMB Union is set to launch legal proceedings against the delivery company Hermes.
Hermes has 14,500 couriers in Britain which it says are self employed.
But the union will contest this claim arguing the couriers effectively work for the company and should have the same rights as employees.
In October, the GMB won a similar case against Uber, arguing its drivers should be entitled to holiday pay, sick pay and the national minimum wage.
Uber is appealing the ruling which was made by an employment tribunal in London.
The GMB isn’t commenting on the matter but is expected to file the case with the same tribunal in the coming weeks.
We spent the morning with Victor Squires who says he’s worked continuously for Hermes for the last seven months.
He told ITV News he's had enough, and 31 January will be his last day with the company.
He doesn't believe he earns minimum wage once he has deducted the cost of running his car which he has to use to make his deliveries.
Victor said an IT glitch at the end of last year – in which he and 10,000 other couriers were overpaid – was the last straw.
Hermes says the average overpayment was £25 but in Victor’s case £61.90 will be taken out of his next wage packet.
In the three hours we spent with him, Victor earned £16.25 for his round (an average of £5.42/hour).
But Hermes says its records show Victor has earned an average of £8.85 per hour for the past 12 months, significantly more than the minimum wage.
Hermes told ITV News it is "unaware of any legal proceedings against us by the GMB…however, we will contest any challenge to our self-employed courier model on the same grounds that we have successfully resolved other claims."
Hermes and Uber will fight their corner because they know their business models are under threat.
They, and other companies with large self-employed workforces, face the prospect of higher tax bills (for national insurance and in some cases VAT), back-dated claims from HMRC and much higher employment costs. Prices would have to rise as a result.
In recent years the internet and smart phones have delivered wonderful benefits for both companies and consumers.
However some argue that the technology has also enabled “digital” newcomers to compete unfairly with more established players.
Frank Field MP, the Chair of the Work and Pensions Committee has been critical of work practices at Hermes in the past.
He told me that he urged the General Secretary of the GMB, Tim Roache, to pursue a claim against the delivery company after winning its case against Uber.
Field is dismissive of Hermes’s insistence that it is a caring company.
He said: "It is pretty grim. And the sooner that this ‘friendly family’ company faces up to how badly it's behaving, how it's pushed people down towards the bottom end of the labour market, has devised means by which people do not get the national living wage, and owns up to that and start paying them properly, the better."
Hermes delivers parcels for Next, John Lewis, ASOS, H&M and Tesco. The company has built an 11% share of the parcels market.
Field believes that, by keeping its wages costs low, the company has been able unfairly undercutting the Royal Mail’s business.
He’s writing to the Competition and Markets Authority and Ofcom to ask them to investigate.
He said: "I'm concerned about Royal Mail because it’s actually is a good company that pay decent wages and has a pension scheme.
"And if they are undermined in this cheap fashion with people being forced into self-employment, not even being paid the National Living Wage, then it’s going to raise long-term question about whether the Royal Mail can survive and its Universal Service will survive."
The Royal Mail has declined to comment.