Takeaway delivery firm Deliveroo has settled a legal claim by 50 of its couriers for a reported six-figure sum, in another legal battle involving employment rights in the gig economy.
The claim revolved around the alleged failure of Deliveroo to give its couriers legal employment rights, such as the minimum wage and paid holiday.
Multiple gig economy firms are currently struggling with legal actions which test the legal definition of a self-employed contractor. Firms such as Deliveroo insist workers are contractors with fewer of the rights afforded to salaried employees.
However, that contractor status has come under threat, with claimants alleging they do not have the independence of a true external contractor.
Annie Powell, a solicitor in Leigh Day’s employment department who represented the riders, said: “Deliveroo has paid out a material sum to settle these claims. In our view, this shows that Deliveroo knew that they were very likely to lose at the employment tribunal."
The firm agreed to a six-figure payout because it would cost less than defending the case in court, according to a source cited by Sky News.
Powell added: “At the moment, a company like Deliveroo can falsely label their employees as independent contractors, deny them employment rights and protections, pay them below the minimum wage, and then force those workers to take legal action to obtain what they were entitled to from the beginning."
The Deliveroo payment is only the latest setback for firms using contractors, after Pimlico Plumbers lost a case in the Supreme Court in which one of its workers who had been solely employed by the firm for six years. The plumber, Gary Smith, successfully argued he was an employee entitled to holiday pay.
Deliveroo did not immediately respond to a request for comment.