Does Hermes’ Union Deal Predict the Future of Gig Economy Workers’ Rights in the UK?

Does Hermes’ Union Deal Predict the Future of Gig Economy Workers’ Rights in the UK?

In a deal reached earlier this month with one of the UK’s largest trade unions, the courier company Hermes is offering its self-employed drivers the option to obtain some of the rights enjoyed by regular employees, including a guaranteed minimum wage and holiday pay, the Guardian reported:

Under the agreement with the GMB union, Hermes’ 15,000 drivers will continue to be self-employed but can opt into contracts with better rights. The deal comes after almost 200 Hermes couriers won the right to be recognised as “workers” at an employment tribunal last summer in a case backed by the GMB. Under employment law, “workers” are guaranteed rights including holiday pay, the legal minimum wage, minimum rest breaks and protection against unlawful discrimination.

The GMB has been active in advocating for the rights of British workers in the gig economy, also backing similar labor tribunal cases against other companies operating on an independent contractor model, including Uber, which lost a landmark case in 2016. Other British unions and union federations have also supported claims regarding the rights of gig economy workers, with tribunals ruling in favor of the workers in most of these cases. The settlement reached this month means that Hermes will drop its planned appeal against the ruling last year, while the GMB will refrain from pursuing further litigation against the company.

The “worker” classification in UK employment law defines a space between employees and the self-employed, but the tests for classifying workers as such are primarily defined by case law and increasingly unclear as technological shifts have brought about changes in the way people work. The Taylor Review of modern working practices recommended in its 2017 report that the government relabel “workers” as “dependent contractors,” write a clearer definition of this category into law, and make it the default status for companies that have a self-employed workforce above a certain size. The government said last year that it would adopt most of the review’s recommendations, but did not commit to writing this “worker by default” model into law.

Yvonne Gallagher, A partner at the London-based law firm Harbottle and Lewis, commented to Personnel Today that the Hermes deal would raise some questions about these drivers’ tax and national insurance obligations:

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Deliveroo Returns to the Spotlight in UK Gig Economy Debate

Deliveroo Returns to the Spotlight in UK Gig Economy Debate

Deliveroo, an Uber-like platform that connects restaurants with delivery workers, is one of several UK companies whose employment practices have been the subjects of public scrutiny and litigation over the past two years as the country wrestle with the contradictions between its existing labor laws and the rise of the “gig economy.” Deliveroo was sued last year by the Independent Workers Union of Great Britain (IWGB), which argued that delivery couriers working through its platform were not self-employed independent contractors as the company contended. While plaintiffs in other gig economy classification suits have succeeded in the British court system, Deliveroo prevailed last November, when the Central Arbitration Committee found that its delivery workers were indeed self-employed, because they had a contractual right to allocate a substitute to do the work for them.

The IWGB appealed to the High Court of Justice, however, from which the union secured a ruling last week that it could pursue a partial judicial review of the CAC’s decision as a human rights issue, TechCrunch’s Natasha Lomas reported on Thursday:

[T]he judge only gave permission for a judicial review on “limited grounds”, relating to whether certain categories of self-employed individuals should have the ability to unionize. “We have been given permission to argue that Deliveroo is breaching the human rights of our members. This is no longer an employment rights matter, this is a human rights matter,” a union rep said outside court after the ruling. …

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Supreme Court Expected to Kill Agency Fees for Public Sector Unions

Supreme Court Expected to Kill Agency Fees for Public Sector Unions

The US Supreme Court heard arguments on Monday in the case of Janus v. American Federation of State, County and Municipal Employees, in which the court appears poised to strike a blow to organized labor by cutting off a major source of revenue for unions representing public sector employees. The plaintiff, Illinois state employee Mark Janus, is not an AFSCME member but pays “agency fees” to the union in return for benefiting from its collective bargaining activities—a practice allowed by the court in the 1977 case Abood v. Detroit Board of Education. Janus, represented by the anti-union National Right to Work Committee, contends that these fees violate his First Amendment rights by forcing him to fund an organization that engages in political activities with which he may disagree.

The Supreme Court came close to striking down Abood in a separate case in 2016, but deadlocked 4–4 after the untimely death of Justice Antonin Scalia that February left its conservative wing without a fifth vote. Now, with the conservative Justice Neil Gorsuch filling its ninth seat, the court is widely expected to rule in Janus’s favor, NPR’s Nina Totenberg explains:

To get a feel for the court’s thinking, take a glance back to the argument in 2016. The teachers union, joined by the state of California, contended that fair-share arrangements prevent strikes and internal strife by providing a single elected union for the state, acting as employer, to deal with, as opposed to competing unions and groups of employees.

In many close controversies, Justice Kennedy is the justice most likely to be open to persuasion, but he is something of a purist on First Amendment free speech questions. Two years ago, he disputed the characterization of those who didn’t want to pay partial union fees as “free riders.” Rather, he said, the union was making them into “compelled riders.”

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Profit Sharing, Pensions to Dominate Airlines’ Next Round of Labor Talks

Profit Sharing, Pensions to Dominate Airlines’ Next Round of Labor Talks

Earlier this month, Delta Air Lines announced that it was paying out over $1.1 billion in profit sharing to its more than 80,000 employees, which Fortune reported was the second-largest payout in its history after the $1.5 billion it shared last year. Over the past five years, Delta said it had paid out nearly $5 billion through its profit sharing program, which returns 20 percent of its annual pre-tax profits to the employees if they exceed $2.5 billion and 10 percent if not.

Profit sharing has become an increasingly common feature of progressive employers in recent years, in sectors from manufacturing to tech and show business. Advocates have touted it as a potential remedy to the problem of wage stagnation at a time when many corporations are posting record profits.

The good news for Delta’s employees was somewhat less welcome to its competitors, however. At American Airlines, which introduced profit sharing in 2016 at a rate of 5 percent, and whose profits for 2017 were smaller than Delta’s, employees are “concerned because their profit sharing rate is less than at either Delta or United,” Ted Reed observed at Forbes:

A Delta captain will get a payout of $29,000 to $59,000, according to the Allied Pilots Association, which represents 15,000 American pilots, while a United captain gets between $9,300 and $20,500 and an American captain gets $3,600 to $7,500. … The union wants to discuss higher profit sharing with management, APA spokesman Dennis Tajer said Wednesday.

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New Union Agreement Gives Some of Volkswagen’s German Employees Extra Time Off

New Union Agreement Gives Some of Volkswagen’s German Employees Extra Time Off

A new union deal in Germany covering some 120,000 Volkswagen workers will give some of them the option of swapping some of their pay for additional time off, CNN Money reports:

Volkswagen said the workers will get a 4.3% pay rise starting in May, and from 2019 an extra 2.3% bonus and more pension benefits. Night shift workers, and those caring for children and elderly relatives, can swap the new bonus for six extra days off. If they do, they’ll be entitled to about 45 paid days off each year, including public holidays.

Volkswagen Group — which also owns the Audi and Porsche brands — employs about 286,000 workers in Germany and 350,000 in other countries. German workers are taking advantage of low unemployment and strong economic growth to flex their muscles at the negotiating table.

The deal between Volkswagen and the IG Metall labor union comes after the first strikes the company had seen since 2004, Reuters adds, and represents a compromise between the union’s demands for a 6 percent raise and the company’s initial offer of 3.5 percent initially and a further 2 percent over 30 months. It also includes a significant boost in the amount of money Volkswagen contributes to employees’ pensions, from 27 euros a month to 90, and then to 98 euros starting in 2020. In exchange for these concessions, Volkswagen secured the right to ask five to ten percent of the workers covered in the agreement to temporarily increase their working hours from 35 to 40 a week.

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German Metalworkers Win Right to 28-Hour Workweek in Union Deal

German Metalworkers Win Right to 28-Hour Workweek in Union Deal

After a series of strikes last week, the influential German union IG Metall sealed a deal with employers in which its members gained both an increase in pay and the right to a substantially shorter workweek, the Local reported on Tuesday:

Both the union and employers said in overnight statements they had reached a “tolerable compromise” with some “painful elements” covering 900,000 workers in key industrial state Baden-Wuerttemberg, which could be extended to the 3.9 million workers in the sector across the country. The key concession is the right for more senior employees to cut their working week to 28 hours for a limited period of six to 24 months.

The union had pushed for staff to have a right to more flexible working conditions around key life moments such as the birth of a child, looking after a relative or ill health — with the right to return to full-time hours afterwards. But bosses rejected unions’ demand that they continue paying full-time salaries to some of those who choose a limited period of reduced working hours. Meanwhile, employers also gained more flexibility, to increase willing workers’ weeks to 40 hours from the standard 35.

The agreement will also see the metalworkers’ pay increase by 4.3 percent, in addition to some one-off payments, in a compromise from their original demand of a 6 percent raise. Stefan Wolf, head of regional employers’ federation Südwestmetall, said that the compromise was “reasonably balanced” but said the deal would be “difficult to bear” for some firms.

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Teamsters Seek Protection Against Automation in UPS Contract

Teamsters Seek Protection Against Automation in UPS Contract

In the round of contract negotiations that began last week between the Teamsters Union and UPS, one of the union’s key demands is a pledge by the parcel delivery company not to use drones, driverless cars, or other automated technologies to do their jobs, Paul Ziobro reported at the Wall Street Journal. Negotiations over the collective bargaining agreement, which covers some 260,000 UPS employees, come at a time when e-commerce has drastically increased demand for more, better, faster delivery services, and UPS and its competitors are trying to keep pace.

In their 83-page draft of the updated contract, the Teamsters are also demanding a ban on deliveries after 9:00 p.m. and a commitment to hire another 10,000 workers, as well as safeguards allowing employees to refuse to work in unsafe conditions or overloaded trucks. The union is driving a hard bargain, as the labor market is tight and delivery companies are already having a hard time finding the workers they need.

Indeed, even as technology drives up demand for new roles in high-tech fields like software engineering and data science, the explosion of online retail is also expanding the market for warehouse and logistics workers to fulfill all those orders. Our research at CEB, now Gartner, bears out this trend: Our 2017 State of the Labor Market report, which CEB Recruiting Leadership Council members can access here, found that tractor-trailer driver was among the fastest-growing jobs in the US between 2016 and 2017, even as the scramble for tech talent captured the headlines.

Given the widespread concern that new technologies will displace millions of workers in routine jobs like transportation, it’s not surprising to see this issue come up in a union contract negotiation—and this won’t be the only time it does.

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