Hermes could face HMRC investigation over pay allegations

Hermes works with retailers such as the Co-operative, JD Williams, M&M Direct, New Look, Next Directory and River Island.

Nearly 80 current and former drivers contributed testimonies which form part of a report by MP Frank Field, who is also responsible for leading the select committee hearing on BHS.

Business minister Margot James responded to Field’s report by requesting that HMRC look into Hermes’ staffing arrangements.

Field’s report said that Hermes’ method of using self-employed drivers meant that many were “paid an hourly rate that is much lower than the national living wage”.

Some couriers said that, after petrol costs, they earned less than £6.80 an hour. The living wage, brought in by former chancellor George Osborne, came into force in April and ensures that employees 25 and over are paid a minimum of £7.20.

Bullying allegations

As well as alleging that some drivers are paid less than the living wage, the report contained allegations of bullying such as two parents threatened with loss of work while at their dying child’s bedside; an immediate loss of work when a driver attended an urgent hospital appointment and another driver who was allegedly sacked after their car broke down on the job.

That driver was told they should have had a spare car, it was claimed. 

Field added that these incidents involved “some of the middle-men and women who manage the operation for Hermes and who seem to be enforcing an employee contract under the cover of self-employment”.

A Hermes spokesperson said: “We do not believe that this report reflects the way our organisation operates.”

“The report is not independent and it has not been discussed with us. However, we are pleased that it does acknowledge some of the actions we have taken to further support our couriers.”

It added that they were “committed to ensuring that everyone at Hermes operates in a supportive and compassionate manner”, and that its code of conduct states couriers should be treated with “dignity and respect”.

It also said that of its 10,500 couriers, just 78 had contributed to the report and that its couriers were paid an average of £9.80 an hour after expenses.

HMRC reviewed Hermes’ staffing model in 2011 and found that it was legitimate.

An HMRC spokesperson told the BBC that, while it did not comment on specific investigations, any examination of a company would look at “the reality of the working relationship, not just what the employer calls the contract”.

It added that companies cannot opt out of the living wage by defining staff as self-employed, even if a worker signs a contract to that effect.