In April, 39 postmasters wrongly prosecuted by the Post Office over alleged fraud, had their criminal convictions overturned and a compensation claim has been launched. Now, the Post Office is being taken to an Employment Tribunal by more than 100 postmasters and sub-postmasters who want to be recognised as ‘workers’ rather than self-employed, and receive the associated benefits such as holiday pay and sick pay.

The case, Baker and Others v. Post Office Ltd, will be heard at the London Central Employment Tribunal later this month, when the claimants will argue that the Post Office has control over the work they do, which means they are dependent on the Post Office and so their status is incompatible with self-employment.

As well as potentially changing the status of those involved in the claim, the outcome could affect thousands of sub-postmasters across the UK. An individual doing paid work in the UK is either a worker, an employee, or self-employed. The differences in status determine pay and benefits, the type of contract they receive for completing the work, as well as the employment rights they are entitled to.

Lead claimant Mark Baker, who runs a Post Office in Wiltshire, told the Financial Times that many postmasters receive less than the National Minimum Wage. “A postmaster earns nothing unless he sells something, he said. “You could stand there all day and not sell anything and commission rates are very low,” said Baker.

A spokesperson for the Post Office said:

“We take the issues to be discussed at a forthcoming Employment Tribunal very seriously. We want to resolve them and are working hard to find potential solutions that are relevant to today’s Post Office and can satisfy the interests of all our postmasters.

“As part of the overall group reset, we’re giving a bigger voice to postmasters, which will help us meet their needs, and two current postmasters have been appointed non-executive board directors, enabling them to directly influence strategy.

“Post Office’s new management is focused on resetting our relationship with postmasters and addressing the past issues relating to remuneration. To date this has included increasing annual postmaster remuneration by £27m over the past year and average remuneration across our network of 11,500 branches is up 7% against last year.

“We recognised the impact COVID-19 was having on postmasters’ ability to stay open and serve their communities, which is why last year we guaranteed all independent postmasters received 100% of their remuneration in April, 90% of their remuneration in May, topped up variable remuneration in June and set up a hardship payment for those that needed immediate relief.”

In its annual report, the Post Office flagged up the outcome of the Employment Tribunal as a potential concern.