Amazon is to settle a group claim from delivery drivers that it deprived them of thousands of pounds, the Guardian has learned, ending a suit that lawyers had said could cost the company £140m.
Drivers who deliver for the internet marketplace through its “delivery service partners” (DSPs) are classed as self-employed, meaning they are not entitled to benefits such as holiday pay and the minimum wage, while they also do not have an employment contract.
In 2021 the law firm Leigh Day brought a claim against Amazon and its DSPs arguing that at least 3,000 drivers were entitled to an average of £10,500 in compensation for each year they had worked for the online retailer.
It is not yet clear how many drivers have received settlement offers or how much the settlement will cost Amazon and its DSPs, the independent businesses that provide the drivers.
Leigh Day said when it launched the claim that more than 3,000 drivers could be owed a total of £140m.
The Guardian understands that drivers who were represented by the firm in an employment tribunal have now received settlement offers, paid for by Amazon and its DSPs.
Some payouts are worth tens of thousands of pounds, once Leigh Day’s fees have been paid, with drivers expected to receive their compensation soon after Christmas.
The claim was based on the argument that drivers’ working conditions are dictated by Amazon, which means they should have more rights.
Drivers described to the law firm how the app gives them estimated travel times between deliveries, which they have to meet. They are also not able to return parcels to the Amazon depot, so have to use extra fuel to redeliver them at the end of each day.
After paying vehicle rental and insurance, drivers say they are often left with meagre earnings.
Acceptance of the settlement offer was understood to bar drivers from making any further claims against the company.
Leigh Day declined to comment on details of the settlement offer on Tuesday.
The Guardian has approached Amazon for comment, including about whether it and its DSPs will change drivers’ employment conditions as a result of the settlement.
Leigh Day brought its claim against Amazon soon after drivers for the ride-hailing app Uber won a victory ruling that they should be classed as workers with access to the minimum wage and paid holidays.
The supreme court’s ruling was hailed as a landmark verdict that could lead to improved terms for millions of workers in the gig economy.
The court said any attempt by organisations to draft artificial contracts intended to side-step basic employment protections were void and unenforceable.
