Frank Field MP, chairman of the powerful House of Commons work and pensions select committee, said the government should review HMRC criteria that allow companies to contract work to self-employed individuals rather than hire them as employees.
The Guardian obtained information about the earnings, hours and expenses of couriers for Hermes, which delivers parcels for retailers including ASOS and John Lewis, that indicated some were earning below the national living wage of £7.20 per hour for people aged 25 and over. However, because the couriers are self-employed and not covered by the national living wage, the arrangement is legal.
The general secretary of the TUC, Frances O’Grady, has also called for reform.
“This isn’t just one company,” she said. “The rise of bogus self-employment is hitting people’s incomes and job security across the country.”
“Common sense would tell you that these people deserve the pay and security of regular employees. The law should be reformed to ensure that people working in these conditions get the rights they deserve. This is the kind of working practice we want to see shrinking, not growing.”
Hermes has said that it is “committed to ensuring that our couriers receive earnings that are equivalent to or higher than the national living wage”. It said it monitors estimated rates per hour and restructures rounds or increases rates if they fall below £7.20 per hour. It said that according to its calculations, none of its couriers earn below that level and on average earn £9.80 per hour after expenses. Hermes also says its couriers are free to plan their rounds around their personal circumstances and are free to negotiate their own rates, rounds and number of days they work.
Self-employed workers are used across the economy by delivery companies, largely serving the booming internet shopping market. They include the taxi app company Uber, which has 30,000 self-employed drivers in London alone. Self-employed workers do not receive sick pay, holiday pay or employer-funded pensions, but enjoy greater flexibility over when and how they work.