13 October 2017

In a hearing by the Business, Energy and Industrial Strategy (BEIS) Committee as part of the Taylor Review of modern working practices, Hermes has said it would leave enforcement of employment law up to workers if it were to lose a cast at tribunal.

Representing the company, Director of Legal Affairs Hugo Martin told MPs that Hermes is currently facing a case brought by Leigh Day on behalf of couriers for the parcel company who are contesting their classification as "self-employed".

If the hearing, which is expected later this year or in the New Year, resulted in a judgement that couriers were in fact "workers" and thus entitled to basic workers' rights such as the minimum wage and holiday pay, the company would not automatically provide these rights to all couriers on the same contract, Mr Martin said.

Instead, the company would wait and see if individual couriers assert their individual rights at tribunal, he said, adding that Hermes does not expect there would be many workers who would take them to court on the back of a previous tribunal ruling. Mr Martin explained he had spoken to the CEO of CitySprint, another courier company, which lost a similar case and had not seen many other workers assert their rights as a result.

While Mr Martin claimed this was because couriers do not want to be "workers", this is not the only explanation for a lack of legal proceedings being brought, and it is also important to note that employment status is defined by the rule of law, not by personal preference. Therefore, a courier cannot simply decide they are not a "worker" if the reality of their relationship with the company is that of a "worker".

In this sense, the Institute of Employment Rights argues that the reliance on individually enforced workers' rights in the UK provides companies with a loophole that can be exploited to evade compliance to labour law. Individuals may not be aware of their rights, or may not be inclined to take a case to court, and in this way rights they are entitled to can potentially be withheld without penalty. This, we propose, can have a detrimental impact on the strength of workers' rights across the board, as without proper enforcement, the law cannot maintain any authority.

It is also notable that in last October's tribunal against Uber, which saw judges rule that drivers for the company are "workers" rather than "self employed", the company sent out an email to its 50,000 drivers across the UK to explain that the judgement did not mean all drivers were entitled to workers' rights, but failed to explain this is because each driver would need to individually claim their rights in court. Such communication is potentially misleading and could dissuade workers from taking their own case to tribunal to claim rights they may be entitled to, including higher wages and holiday pay.

The Institute of Employment Rights recommends that an independent Labour Inspectorate is formed with the power to enter workplaces in order to identify breaches to the law and collective agreements, sanction employers where appropriate, and bring legal proceedings on behalf of workers. This would remove the onus from workers to police their own rights and help ensure labour standards are adhered to across the board, preserving the effectiveness of the law.

In another recent hearing, the Committee took evidence from Matthew Taylor - leader of the Taylor Review. Chair of the BEIS Committee Rachel Reeves MP, said his words had "provided further evidence that Parliament must take action to ensure that everyone get the protections they deserve and that they are fairly rewarded".

"Those in insecure work should be in receipt of higher pay or guaranteed their hours and there is a strong case for better representation and rights for workers. There are clear wins to be gained for both businesses and workers in cracking down on poor employment practices," she added.

Meanwhile, Chair of the Work and Pensions Committee, Frank Field, noted that Taylor had gone further in the hearing that in his written report, by "suggesting much more proactive regulation of how workers are treated".

"There is also a key point about moving liability further up the supply chain and holding brands more responsible for the treatment of workers who work for their suppliers – the question must be, if something does go wrong, who was the delivery being made for?" he added.

Indeed, this is a key question lawyers and academics at the Institute of Employment Rights have covered in recent reports, including Health & Safety at Work: Time for Change, and more recently in our continued Manifesto for Labour Law project.

"One point where the select committees disagreed with Mr Taylor was on any proposal that might fracture the universality of the National Living Wage: there is no appetite or support on either select committee for his proposals on this front," Frank Field said.

The Institute of Employment Rights welcomes this comment from Mr Fields, having published our own concerns about the weakening of minimum wage laws in our Guide to the Taylor Review.