Delivery companies such as Hermes that use self-employed drivers need to change their business models, according to a select committee.

The Work and Pensions Committee’s abridged report into the so called gig economy calls for self-employed workers to be re-classed as “workers” to ensure their rights to basic employment benefits such as holiday and sick pay.

The committee’s report is based on findings from its inquiry into the gig economy, which was curtailed due to the snap general election.

It has heard from companies including Uber, Amazon, Hermes - which has been drawn into the debate - and Deliveroo, as well as the drivers who work with them.

The report condemns “the apparent freedom companies enjoy to deny workers the rights that come with employee or worker status”.

It calls for a change in employment law to give self-employed gig economy workers greater protection.

It states: “An assumption of the employment status of “worker” by default, rather than “self-employed” by default, would protect both those workers and the public purse, and would put the onus on companies to provide basic safety net standards of rights and benefits to their workers.”

The report also dismisses the argument that flexible employment can only be delivered via self-employment as “a fiction”.

It adds: “People on employment contracts can and do work flexibly; flexibility is not the preserve of poorly paid, unstable contractors.

“Profit, not flexibility, is the motive for using self-employed labour in these cases.”

The report calls for the next government to “close loopholes that incentivise exploitative behaviour by a minority of companies, not least because bogus self-employment passes the burden of safety net support to the welfare state at the same time as reducing tax revenue”.

Committee chairman Frank Field MP said: “This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option.

“This status would be a much fairer reflection of the work they undertake, which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.”

It came as the GMB launched legal action against DX Group over the employment status of some of its workers.

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