Could it happen here? Would it be a good thing?
27.11.07 by Buffalo Bill
In the US, legislation has been introduced that could, if enacted, fundamentally change the relationship between courier companies and their operators. The legislation is entitled the Obama-Durbin Independent Contractor Proper Classification Act of 2007. Around 10 million people are estimated to be classified as ‘independent contractors’ rather than ‘employees’ in the US, and the legislation is being introduced to close what is perceived to be a loop-hole which allows employers to ‘misclassify’ as ICs operatives that would otherwise be considered employees, thus saving the employers the money they would normally be forced to spend on benefits such as statutory holiday pay, equipment and so forth.
The Messenger Courier Association of the Americas, self-styled Industry voice of the courier industry is not happy. Its position paper on the legislation says that dismantling the independent owner-operator business model has the potential to cripple the courier industry and severely impact the many thousands of companies the industry serves each day, as well as the independent owner-operators and their families, and the employees of courier companies alike who depend upon the flexibility, the service and the independence the current model provides.
Not content with claiming to speak for the entire courier industry, they go on to speak for the humble worker. Professional owner-operator contractors do not believe that they are employees nor are they fooled or tricked into accepting the independent contractor classification. These independent owner-operators make an excellent salary while retaining their freedom as a business owner.
I have to say that I don’t like the courier/messenger business being described as an ‘industry’. To my mind, an ‘industry’ is an economic activity concerned with the processing of raw materials and manufacture of goods in factories, at least according to my dictionary. The only raw material that the courier business processes is fuel and the principal output is smelly hot air.
The thrust of the argument comes down to the legislation’s determination to make sure that people who are treated in every way except contractually as employees receive the benefits thereof, against the employers representatives’ argument which boils down to: we can’t afford it, and anyway our ICs are perfectly happy as they are.
Could it happen here?
To answer this question we need first to ask: what is the difference between a self-employed sub-contractor and an employee in UK law? According to a test I did on Her Majesty’s Revenue & Customs’ Employment Status Indicator, couriers/messengers can be considered as self-employed. So at the moment it seems as though HMRC are happy to leave things as they are. Mind you, right now, most people wouldn’t trust HMRC to go to the toilet on its own.
On the other hand, most courier companies effectively prevent their riders from working for anyone else, determine the hours that the riders work, what equipment the riders use, including in many cases, uniforms, which sort of sounds like an employer/employee relationship. However, whilst I am not remotely conversant with UK employment law, it seems that one of the key tests is whether or not the worker supplies major equipment necessary for performing the task. As courier/messengers provide their own bikes, this box is ticked ‘self—employed’.
Of course, it’s always possible to introduce legislation or measures to change the status quo.
I can recall hearing from Tony, the old boss of Hornets, that he expected the Revenue to investigate the UK courier business with a view to changing the status of the workers to employees. That was in 1999. I can also recall being told the same thing by other people at various times. But it hasn’t happened.
Would it be a good thing?
I don’t know. If you look at the MCAA’s literature, you can see that they trumpet the fact that the courier business is flexible. What they mean by this is that they have lots of spare capacity sitting around just waiting for the chance to supply any excess in demand. What that means to you, the self-employed sub, is that you are sitting around on your backside, at no real cost to the company, just waiting for the phone to ring at the company’s office. If there were greater costs to the companies than a PDA and a radio of retaining a rider, would it make the companies less inclined to over-hire? Or would they simply go out of business? Would either result be bad for the riders?
Again, I don’t know.
There’s more on the issues (from a North American perspective) by Joe Hendry on Messmedia.
Also worth a read is Self-employed my arse, from The couriers are revolting – Despatch Industry Workers Union 1989 – 1992.