Self-employed couriers working for the gig-economy delivery firm DPD will receive a guaranteed minimum wage of £8.75 an hour, as part of reforms following the death of a self-employed driver who missed hospital appointments because of the need to keep working or be charged.
The proposal is thought to be the first of its kind by a major firm using self-employed gig workers in a system which has previously transferred most of the risk of achieving steady earnings on to workers who have been paid per delivery. The minimum rate will be £10.20 an hour in London and each self-employed driver will have their earnings and hours assessed quarterly by independent auditors.
DPD has claimed it is setting “a benchmark for the industry”. Other courier and transport firms – including Hermes, Deliveroo and Uber – rely on self-employed workers whose take home pay depends on the number of jobs they do each day. Investigations have suggested that some people working in this way earn well below the national minimum wage – currently £7.83 an hour for over-25s.
DPD makes deliveries for Marks & Spencer and John Lewis, which had both voiced concern over its use of labour after Don Lane’s death was reported by the Guardian. It confirmed it is scrapping £150 per day charges to drivers who miss work without finding a replacement. Lane, 53, collapsed and died in January after he missed hospital appointments to treat his diabetes, having been fined £150 when he did go to hospital.
His death sparked anger in the Commons. Labour described it as “heartbreaking” and the business secretary, Greg Clark, called it “a terrible tragedy”.
DPD’s move came as the Resolution Foundation’s intergenerational commission reported that the growth in self-employed work has underpinned weak earnings growth, particularly among millennials. It found the proportion of young people without degrees in self-employment has risen sharply, accounting for 15% of working 35-year-olds.
There are an estimated 1.1 million people working in the gig economy in the UK and there has been a string of employment tribunal cases in which gig workers – including for Uber and City Sprint – have successfully claimed that they were in bogus self-employment and should in fact be treated as workers and given the minimum wage, holiday pay and other rights. The government is considering possible legislation to make it easier for both the workforce and businesses to understand whether someone is an employee or self-employed.
The move also comes as the government announced increased financial penalties for employers who break laws protecting low paid workers. It said it will hold leading brands jointly responsible for non-compliance in their supply chains by naming and shaming those which fail to correct non-compliance.
Dwain McDonald, CEO of DPD, claimed the new driver code was a “complete reappraisal of every aspect of our driver package”.
It will also give drivers the opportunity to have worker status, which means they will get a steady wage, sick pay, 28 days’ holiday and a pension. DPD said the average annual salary under those terms would be £28,800 and that drivers would not bear the costs of renting and insuring their vans as they currently do.
“Our aim is simple – to make DPD the carrier of choice for delivery drivers and for our drivers to be the best rewarded in the industry,” McDonald said.
But a trade union representing some of DPD’s 5,000 drivers voiced caution. Calne Waterson, regional organiser for GMB Scotland, said that after DPD first announced the £150 charge would be scrapped in March, it continued in some places with one of his members being charged £300 for two days’ missed work only last month.
“It sounds good, but the promise to scrap fines sounded good too,” he said. “We will believe it when we see it.”
He also criticised DPD for communicating the new deals through the press rather than directly with drivers or unions.
DPD declined to comment on whether it would be changing the amount it pays couriers per delivery in order to fund the changes. It said these were commercially sensitive.
