Amazon has reached a settlement with thousands of UK delivery drivers, it emerged on Wednesday, who claimed the company deprived them of fair compensation by misclassifying them as self-employed.
According to an exclusive report from the Guardian, the settlement - which resolved a legal battle that started in 2021 - could cost Amazon and its delivery service partners (DSPs) millions of pounds.
The claim, brought by law firm Leigh Day, argued that over 3,000 drivers delivering for Amazon through DSPs were entitled to an average of £10,500 per year in compensation.
The drivers were classified as self-employed contractors, which excluded them from employment benefits such as holiday pay and the minimum wage.
Leigh Day asserted that Amazon's control over drivers' working conditions effectively made them employees under UK law.
Settlement offers had been extended to affected drivers, the Guardian said, with some receiving payouts in the tens of thousands of pounds after legal fees.
The payments were expected to be distributed shortly after Christmas.
However, the total cost of the settlement and the exact number of drivers compensated remained undisclosed.
The dispute centered on claims that Amazon's app dictated drivers' routes and delivery times, leaving them with little autonomy.
Drivers also cited additional costs such as vehicle rental, insurance, and fuel for reattempting undelivered parcels, which significantly reduced their earnings.
The settlement required drivers to forgo any future claims against Amazon.
Neither Amazon nor Leigh Day commented on whether the settlement would lead to changes in the company’s employment practices for drivers, the Guardian added.
The case followed a landmark 2021 Supreme Court ruling that ride-hailing app Uber was required to classify its drivers as workers, granting them access to basic employment rights.
That decision was seen as a significant step toward improving conditions for workers in the gig economy.