Amazon faces a significant legal challenge from delivery drivers over employment rights, potentially costing £140m.
- The drivers argue they are misclassified as self-employed, denying them benefits like minimum wage and holiday pay.
- The lawsuit, initiated by Leigh Day in 2021, involves 3,000 drivers seeking compensation for unfair treatment.
- Drivers claim Amazon controls their work through app-based timing and routing requirements.
- Settlement offers have been made, with some drivers expected to receive payments after Christmas.
Amazon is confronting a substantial legal issue as delivery drivers challenge their employment classification. The legal dispute, potentially amounting to £140m, arose from claims that drivers are improperly classified as self-employed. This classification results in their exclusion from essential benefits such as the minimum wage and holiday pay. The case was first brought forward by the solicitors Leigh Day in 2021, who contended that approximately 3,000 drivers are each entitled to an average compensation of £10,500 annually due to the conditions dictated by Amazon.
The crux of the drivers’ argument is centred on the degree of control Amazon allegedly exercises over them. Drivers report that the app’s guidance on delivery times and impossibility of returning parcels directly impact their operational costs, including additional fuel expenses. These constraints, coupled with costs such as vehicle rental and insurance, reportedly reduce the drivers’ net earnings significantly.
In recent developments, delivery drivers represented by Leigh Day have begun receiving settlement offers funded by Amazon and its delivery service partners (DSPs). These settlements are expected to be disbursed following the Christmas period, with some payouts reaching tens of thousands of pounds. Despite the absence of precise figures on the number of offers or total costs, it is acknowledged that the potential reaches up to £140m.
This legal action coincides with Amazon’s announcements highlighting a successful sales period during the recent Black Friday Week and Cyber Monday, marking a record-breaking event for the company. However, this legal scenario draws attention to ongoing dialogues regarding the gig economy and workers’ rights, underscoring significant challenges around employment law compliance.
The resolution of this legal dispute will likely have lasting implications for employment practices within the gig economy.
