Twenty-thousand couriers for Evri, the delivery company that rebranded itself this month from Hermes, will be automatically enrolled into a pension by the end of 2022 after it reached an agreement with the GMB union.
Since 2019, Evri couriers have had the option to choose a ‘self-employed plus’ status, which entitles them to benefits including holiday pay and individually negotiated pay rates providing at least £8.55 per hour over the year.
The pensions deal represents the latest step in moving gig economy workers into pensions. Self-employed workers do not currently fall under the scope of auto-enrolment.
“This breakthrough deal is a massive step forward and will make work better for GMB members,” said Steve Garelick, GMB’s London region organiser.
Preserving the flexibility of self-employment
Establishing the employment status of gig economy workers has been the subject of several high-profile legal battles over recent years.
Pensions have sat in the middle of disputes between companies that operate in the gig economy and their workers’ representatives, some of whom have demanded recognition as workers along with the benefits that this status provides.
In 2018, the High Court decided that Deliveroo riders were not entitled to a workplace pension, on the basis that they could turn down work and could therefore not be classed as staff.
But in September last year, ride-hailing company Uber picked Now Pensions as its provider after the High Court ruled in March 2021 that it had to classify its drivers as workers.
And in December 2021, campaign group Contractors for Justice announced legal action against online estate agent Purplebricks over its agents’ employment status.
Evri’s 20,000 self-employed plus couriers will now enter a scheme, with their employer contributing 3 per cent of earnings into a pension pot. The couriers will contribute a minimum of 5 per cent of their earnings and will be able to opt out of the scheme should they wish to do so.
The self-employed plus model works on an opt-in basis, meaning that Evri couriers have the choice to remain fully self-employed.
Evri chief executive Martijn de Lange said that the option “allows couriers to retain the flexibility of self-employment we know is so important to them and gives them the certainty of guaranteed levels of earning, the security of holiday pay and a strong voice”.
The self-employed plus model could offer a compromise solution to other companies that make use of gig economy workers.
When the concept was announced in 2019, then GMB general secretary Tim Roache said it showed that “that the gig economy doesn’t have to be an exploitative economy”.
“Other employers should take notice. This is how it’s done,” he added.
The pandemic pushed pensions down the pecking order
Long-term self-employed participation in pensions has been on the wane in recent years, falling to 16 per cent in 2019-20 from 21 per cent in 2009-10.
The coronavirus pandemic and the ongoing cost of living crisis have increased pressures on self-employed workers.
Freelance football journalist Will Magee told FTAdviser's sister publication Pensions Expert that his plans for retirement have mostly been on hold since the start of the pandemic.
“Having seen a drastic drop in my income during the first lockdown, I feel like I’ve been trying to catch up and achieve some form of day-to-day financial stability ever since,” he said.
“During that period of financial stress, my pension was pretty much bottom of my priorities.
“Like a lot of people who saw a drop-off in income during the pandemic, the needs of the present felt much more pressing than those of the future,” he added.
Magee has now spoken to a pensions adviser about consolidating his pension pots, which he described as hard to keep track of as a freelance worker.
“It’s something I’ve been meaning to get done and doing so will hopefully give me some peace of mind,” he said.
“That said, the squeeze from the increased cost of living and prevailing economic outlook for people under 30 make me feel fairly pessimistic about what my pension will look like in 35 or 40 years.”
Alex Janiaud is deputy editor at FTAdviser's sister publication Pensions Expert
