Employment Status: Employment tribunal finds Hermes couriers were workers

Employment Status: Employment Tribunal find Hermes couriers were workers's Tags

Tags related to this article

Employment Status: Employment Tribunal find Hermes couriers were workers

Published 6 August 2018

The facts

Several couriers working for Hermes Parcelnet Ltd claimed that they were entitled to be paid the national minimum wage, receive paid annual leave, and that they had suffered unlawful deductions from wages. To be able to bring these claims, they had to show, at a preliminary hearing in the employment tribunal, that they were “workers”, as defined by the relevant legislation. An individual is a “worker” if they work under an employment contract or (as was relevant in this case) they work under any other contract whereby they undertake to perform personally any work or services for another party to the contract who is not by virtue of the contract that of the client or customer of any profession or business carried on by the individual. The main area of dispute in this case was whether the claimants were contracted to undertake to perform the work “personally”.

The starting point in determining whether an individual is a worker (where the individual is not working under an employment contract) is looking at the express and implied terms in the contract between the two parties. Case law shows that a written contract may contain clauses that are not part of the true agreement –i.e. the clauses do not reflect what the parties actually agreed. To decide if this is the case, a tribunal will look at the written term itself, read in the context of the whole agreement, and at evidence of how the parties conducted themselves in practice. If the written term does not reflect what the parties agreed, the tribunal will disregard it.

In this case, the written contract provided that;

  • “it is expressly intended that there is no mutuality of obligation between the parties”
  • “The Courier…agrees that he/she provides the services to the Company as a self-employed person…This agreement is a contract for Services….”
  • “You are not under an obligation to provide the service personally. Accordingly, you have the unconditional right to nominate a substitute to provide the service on your behalf, at any time for any reason. However, it is your responsibility to ensure that your nominated substitute carries out the service in line with the standards to which you would be subject if you were providing the service. Should you wish to exercise your right to provide a substitute, you should advise us of your substitution….”

These clauses outline key factors of self-employment – lack of mutuality of obligation, and that the contract is not to provide services “personally”. However, looking at all the evidence, the tribunal judge commented that “I find that the written contract was not a true or full reflection of the contractual agreement between Hermes and the couriers….I consider that the whole written agreement has the hallmarks of being designed with the principal purpose of presenting the couriers as falling outside [the definition of “worker”] rather than its principal purpose being to set out fully and accurately the contractual agreement between them and Hermes.”

The tribunal considered whether there was any mutuality of obligation between the couriers and Hermes, the judge commenting that (contrary to the wording in the contract) “I have no hesitation in finding that there is”. The couriers are assigned “rounds” by Hermes. Once the round has been assigned, Hermes is expected to send parcels on that round to that courier for delivery on every day of the week for which the courier is responsible. The courier is responsible for ensuring that the parcels are delivered (by themselves or by finding someone else to do so) and for dealing with any collections. There is therefore mutuality of obligation.

The judge then considered whether there was an unfettered right to substitute, as set out in the contract, and held that there was not.

The judge also looked at whether under the contract Hermes is a client or customer of business undertakings carried on by the couriers, and decided (again, with no hesitation) that it is not.

The couriers are therefore workers, and can bring claims in relation to national minimum wage, annual leave, and unlawful deductions from wages.

What does this mean for employers?

Cases on worker status will turn on the facts of that particular situation. As with previous cases on worker status, this case demonstrates how tribunals are fully prepared to look at how the contract actually works, and where this is inconsistent with the written terms of the contract, deem the contract to be a sham.

Leyland v Hermes Parcelnet Ltd

Authors

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

Key Contacts

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

< Back to articles