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Whilst many including ourselves, have predicted the shifting landscape of the “gig economy” and what it means for recruiters and the industry at large, it has often been the case that change is only ever affected through the courts. The Taylor Review and the subsequent Good Work Plan outlined where changes would be made at governmental levels but fell short of addressing the real concerns of the gig economy.
On Monday, Hermes workers and the GMB announced the result of their tribunal that arose from their court case last year. And whilst it has improved the position for some workers within Hermes, it shouldn’t be seen just yet as a serious threat to the gig economy’s future.
The tribunal result outlined that Hermes workers were entitled to receive the minimum wage, holiday pay amongst other benefits, after successfully challenging their status last year in their landmark case. These benefits have in turn defined their role within the company in what has been dubbed “self-employed plus”.
It offers flexibility to the worker, with an “opt-in” to receive benefits normally reserved for employees with the trade off that any worker who does opt-in having to conform to the set routes Hermes give them. Although further clarity on what the mandated routes set by Hermes will mean and how much of an impact it’ll have, will be needed.
On the face of it the deal has for the first-time established worker rights within the gig economy sector, establishing set rules and recognition with the employer and in the case of Hermes, at trade union level. However, we should be wary on how it will affect the industry going forward. Whilst the GMB and Hermes workers have forced the company’s hand on their rights, many others including Uber, DHL and possibly Amazon will continue to fight through the courts, blocking serious change at every turn. And with the GMB agreeing not to fight any cases on similar terms, this will be an uphill struggle.
This is not to mention the HMRC, who’s position is unclear at the minute, but they could become interested in this new hybrid model if the question over national insurance contributions arise. If they do decide that the new model leans more towards an employed status, then NIC contributions could be demanded.
But all these changes shouldn’t threaten the gig economy too much in the short to medium term. It is a useful part of the workforce model and when done correctly can help rather than hinder employees and companies. And this is backed up in the numbers, with demand growing year on year for the last several years. So, whilst the Hermes result has opened the door for further discussion on the future of the industry, and possibly challenging the gig economy to grow up a little, the broader demand and challenges posed by some of the commercial giants will see it continue to flourish.