Theresa May agrees to Hermes HMRC investigation

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Hermes may face an HMRC investigation into allegations of low pay and poor working practices made by self-employed couriers working for the delivery company

Frank Field, chairman of the Commons Work and Pensions Select Committee, said Theresa May has agreed with his calls for an HMRC inquiry into employment practices at Britain’s second largest courier firm, following complaints that some self-employed couriers were not being paid the minimum wage.

Field wrote to May calling for an HMRC investigation into self-employment in the gig economy based on working practices described by Hermes couriers and urged the prime minister to fulfil her promise to make the economy work for everyone.

According to Field, May has responded by asking the business minister, Margot James, to invite HMRC to begin inquiries.

“This is the first practical move the prime minister has made to begin implementing the promise she made on entering Downing Street – that there will be no-one left behind in this country. Woe betide those employers who think they can beat government moves to guarantee a decent minimum for everyone,” Field said.

The chairman of the Commons Work and Pensions Select Committee published a report based on 78 testimonies, which details some of the most appalling working practices at Hermes including reports that couriers were treated “like dirt” by the delivery firm and warned they risked losing shifts if they took time off.

Field highlighted that Hermes's practice of employing its drivers as self-employed workers means many of them are "paid an hourly rate that is much lower than the National Living Wage".

He said the increasing use of freelancers and contractors had created a "wild west workplace" in which workers lose out on employment rights while carrying higher risks. He also called on HMRC to investigate companies’ use of self employment including "whether this mode of employment is an accurate reflection of the reality of their working practices".

Field made a series of recommendations for a decent minimum standard to be applied at Hermes and across the courier industry.

“The gig economy is transforming the way millions of us buy and sell goods,” Field said.

“A further transformation is now required to ensure the sizeable rewards being generated are shared fairly with the armies of people helping to deliver this rising prosperity.”

Hermes has not yet responded to our request for comment.

HMRC said it could not confirm whether it will launch an inquiry as it does not comment on individual cases.

However, a spokesperson said, “HMRC follows up every complaint of minimum wage abuse. When the wrong tax is paid, or the National Minimum Wage (NMW) should have been paid, but hasn't, we intervene to ensure businesses play by the rules.”

The tax authority highlighted that all businesses – irrespective of their size or business sector – are responsible for paying the correct minimum wage to their staff and employers cannot simply opt out of the NMW/NLW by defining their staff as self-employed, even if the worker signs a contract to that effect.

Punishment for not complying with the NWM/NLW can include fines of up to 200% of the arrears owed, naming in the national press, and, for the worst offences, criminal prosecution.