Third of delivery drivers paid less than the National Minimum Wage

More than one in three self employed delivery drivers are paid below the minimum wage, a shocking new report shows.

The University of Sheffield paper – Work and Employment in UK Last Mile Parcel Delivery – spoke to couriers of a two year period. Of those, 35% of self employed drivers estimated they earn less than the National Minimum Wage – as well as facing significant costs, including fuel, insurance, vehicle maintenance and mobile phones.

The report was launched at an event in Parliament on 20^th October where Kate Dearden, Minister of State for the Future of Work, expressed support for its findings and recommendations on tackling insecure work and unfair competition in the parcel delivery sector.

The CWU also joined the panel of speakers, along with representatives from the TUC who are helping to push for the introduction of sectoral collective bargaining in parcel delivery, and the GMB who represent self-employed drivers in Evri.

Sheffield University Centre for Decent Work’s report is based on almost 1500 survey responses and 85 interviews with workers, union officials and union representatives in two major operators in the sector: Company A and Company B. T

The operators and the trade unions are not named in the report to avoid the risk of litigation against the university from companies like Evri, which is suing the BBC over claims its couriers earn under the minimum wage.

In Company A drivers are mostly direct employees and there are established union structures, whereas Company B utilises a self-employed model, including “Self Employed Plus”.

Key findings

The report finds that Company A is better than Company B for:

• Pay
• Working time
• Employment protections e.g minimum wage and sick pay entitlement
• Maintaining health and safety standards through collective bargaining

However Company A workers face similar challenges to Company B workers from:

• Extensive surveillance
• Demanding performance expectations and targets
• Stress
• Work related bullying

Pay – While drivers at both companies reported average earnings of £13 an hour, this hides sharp differences in take home pay. In particular:

• • 35% of self-employed driversestimated that they earn less than the National Minimum Wage vs 6% at Company A.[2]
  • Self-employed drivers described significant costs, including fuel, insurance, vehicle maintenance and mobile phones, and successive rate reductions that cut their earnings.
  • Working time – Most Company A drivers worked a conventional five-day week, whereas 80% of Company B drivers reported working six days a week.
  • Sick pay – 81% of Company A drivers received sick pay, while 99% of Company B drivers did not receive sick pay.
  • Holiday pay – 99% of Company A drivers received holiday pay against 85% of Company B drivers, but Company B drivers holiday pay was financed through rate reductions associated with “Self Employed Plus” status.

Breaks – More than half (56%) of self-employed drivers said they take no breaks during the working day, compared with 13% of directly employed drivers.

Surveillance – Electronic monitoring was almost universal, affecting 99% of directly employed and 89% of self-employed drivers.

Delivery targets – Around two thirds of directly employed drivers (65%) and more than half of self-employed drivers (58%) reported “very high” or “a lot of” pressure to meet delivery targets.

Bullying and harassment – Nearly half (47%) of all respondents said they had experienced bullying or harassment at work. This was higher for self-employed drivers at Company B (53%) compared with directly employed drivers at Company A (43%).

The CWU has strongly welcomed the report, which finds that parcel delivery drivers face significant challenges in the workplace on a range of issues from pay and working time, to surveillance, demanding performance targets and health and safety concerns.

Communication Workers Union (CWU) General Secretary Dave Ward said:

Bogus self-employment is a scourge for workers in the parcels and logistics sector.

From worse pay and conditions to less control over working hours, these workers face huge disadvantages in their lives from legal loopholes that help multinational corporations avoid paying their fair share to workers and the government.

The report is right to highlight these issues, and its findings should assist the efforts of trade unions and the Labour government to crack down on bogus self-employment and put an end to the race to the bottom in the workplace.

Nicola Savage, GMB National Officer, said:

GMB Union and progressive companies have made massive strides in improving pay, terms and conditions in the delivery sector. Yet despite this, last mile deliveries remain a wild west, with many contractors locked in a race to the bottom. We call on all delivery companies to work with GMB to improve standards for couriers across the UK.

Download ‘Work and Employment in UK Last Mile Parcel Delivery’ here.