Parcel delivery company DPD is to give 6000 self-employed drivers access to benefits such as paid annual leave, sick pay and pension entitlement through a new self-employed worker contract.
The courier company DPD is to offer all of its drivers sick and holiday pay and will abolish its controversial £150 daily fines for missing work, as part of wholesale reforms to its gig-working model sparked by the death of a driver it charged for attending a medical appointment to treat his diabetes and who later collapsed.
The announcement came six weeks after the Guardian exposed the case of Don Lane, who was delivering parcels for the company on a daily basis.
The company is now to offer its 6,000 couriers – more than 5,000 of whom are self-employed piece workers with no employment rights – the right to be classed as workers, with paid holiday, sick pay and access to a pension scheme.
It also plans to scrap the £150 daily charge for self-employed drivers who fail to provide service and replace it with a points-based service failure system, which it said would be more consistent and transparent.
DPD announced the new status would give self-employed couriers some of the protections usually enjoyed by employed staff, while being able to continue to work flexibly.
It plans to introduce the new status later this year and all workers will be given the opportunity every year to choose whether they want to be classed as employed, as a worker or as a self-employed franchisee.
In statement, the firm said:
“Drivers on this contract will receive some of the protections of being employed, including paid annual leave, pension entitlement and sick pay, but will also be able to realise the benefits of being self-employed, by having a higher earning potential and greater flexibility and choice over how they work.”
The company laid out its plans for the status following the death of self-employed courier Don Lane earlier this year.
In January, 53 year-old driver Don Lane, from Dorset, died after failing to attend three hospital appointments for his kidney damage caused by diabetes. His widow told the Guardian that he felt under pressure to cover his round and faced DPD’s £150 daily penalties.
He collapsed at the wheel of his van while on deliveries a few months before he died in January.
Months earlier, DPD had fined him £150 for taking time off when he had a hospital appointment. His widow, Ruth, said her husband had missed numerous hospital appointments because of work pressures.
Dwain MacDonald, the chief executive of the company, which made £100m in profits last year, said:
We recognise that we need to improve the way we work with our drivers. While the self-employed franchise scheme has benefitted thousands of drivers over the past 20 years, it hasn’t moved with the times and needs updating. Our plan is to completely transform our overall driver offer, as well as the day-to-day working relationship we have with our drivers. I’ve been visiting our depots and talking to our drivers and the package of measures we are developing will be a direct result of those conversations.
The company is the first within the growing “gig” economy, to propose such fundamental reforms amid growing concern at the instability caused by the spread of the gig economy model in the UK, under which an estimated 1.1 million people are employed.
DPD appointed David Watts, the former chair of the parliamentary Labour party, and Iain Wright, the former chair of the House of Commons business, energy and industrial strategy select committee, as external advisers on the reforms.
The changes are expected to be introduced in July as part of a new driver code.