Information & Communication Technology

The Gig Economy Doesn’t Have to be an Exploitative Economy

Commentary, 16 April 2019

By Mick Rix, National Officer, GMB Union

On the 4th February 2019 the UK Union GMB and international courier company Hermes announced a ground-breaking deal. Their collective-bargaining agreement – the first ever recognition deal of its type – has potentially enormous implications for gig economy workers in the UK and possibly further afield.

 

Ensuring Workers' Rights Are Central in the Future of Work

As a result of engagement between the two organisations, Hermes’ 15,000 courier drivers, previously categorised as self-employed, can now choose to become ‘self-employed plus’.  This provides benefits such as holiday pay and individually negotiated pay rates that allow couriers to earn at least £8.55 per hour over the year.  In addition, those self-employed plus couriers that join the GMB Union will benefit from full GMB representation.

GMB has been calling attention to companies classifying their workers as self-employed in order to avoid certain employer responsibilities and costs. 

GMB has been calling attention to companies classifying their workers as self-employed in order to avoid certain employer responsibilities and costs.

GMB’s case against Uber, for example, made international headlines when the company that has come to be known as the poster child for the gig economy was told by the UK Court of appeal its business model undermined employment rights in the UK, and that its drivers had to be classed as ‘workers’ within the meaning of the UK law. Uber is now appealing to the UK Supreme Court in a persistent and prolongud attempt to resist employer status over its workers.

GMB had backed a case against Hermes at an employment tribunal on behalf of 194 drivers who were fighting to be recognised as workers rather than self-employed. In June 2018 the employment tribunal ruled the couriers were wrongly classified as self-employed and were in fact workers. However, the UK legal system does not recognise class actions - so the court’s ruling does not automatically apply to all Hermes couriers.

In a choice all too rare in the business world, Hermes decided to engage with GMB in a series of confidential negotiations – rather than pursue an appeal against the ruling.

Despite this, in a choice all too rare in the business world, Hermes decided to engage with GMB in a series of confidential negotiations – rather than pursue an appeal against the ruling.

After a series of meetings, and a fair bit of to-ing and fro-ing, GMB and Hermes arrived at a resolution. We negotiated a collective agreement, covering all couriers, offering an opt-in model to give enhanced conditions to the couriers who wanted them.

 

Self-Employed Plus

The so-called ‘self-employed plus’ model gives drivers the right to paid holidays, with an arrangement for cover to be provided by Hermes. It also includes enhanced payments, protection of earnings so they don't fall below the minimum wage, fair treatment if couriers go on emergency leave or need medical treatment, and a union recognition agreement, which allows for collective bargaining and representation.

Whether drivers opt in or not, all will have the right to GMB representation.

GMB and Hermes are still in the early stages of finalising the agreement, and the self-employed plus model is still to be rolled out to the wider workforce. But the model illustrates the choices all companies engaging in the gig economy must face up to. You can either wait until Government ensures there is legal framework – which could be some time. Or good employers and good trade unions can do what has shaped industrial relations for more than 130 years; sit down, talk, and reach an agreement.

Full credit to Hermes. They’re showing that the gig economy doesn’t have to be an exploitative economy. 

The gig economy presents important dilemmas for workers, businesses, and unions.

Workers get flexibility and autonomy, but fewer rights, freedoms, and benefits. Companies get a flexible workforce it can deploy as it chooses, but may not get worker loyalty. Unions find it harder to organise or collectively support workers who are not formally recognised as such by employers. It also poses challenges within organisations where part of the workforce is unionised, as it does with competing firms or business models that must reckon with existing laws covering labour-management relationships.

Finding the sweet spot is not easy; the GMB-Hermes agreement shows a possible way forward.

As James Moore of the UK Independent said, “It is to the credit of all those involved, and an example of what can be achieved outside of a broken political system if people put their minds to it. And it has the potential to serve as a way forward for other companies operating on a similar model to Hermes which have come under sustained, and largely justified, attack in recent years.” 

Full credit to Hermes. They’re showing that the gig economy doesn’t have to be an exploitative economy. Other employers both in the UK and worldwide should take notice that this is how it’s done.

Other employers both in the UK and worldwide should take notice that this is how it’s done.

 

 

Image: Maarten van den Heuvel

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