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Amazon could be hit with £140m bill in employment status case

Self-employed delivery drivers are demanding employment rights from Amazon

Amazon could owe as much as £140 million in compensation to thousands of self-employed drivers delivering its parcels, it has been reported. 

Law firm Leigh Day, who brought and won the landmark case for Uber drivers in February 2021, has launched a group claim stating it believes at least 3,000 drivers could be affected.

Currently, drivers making deliveries for the online giant do so through its ‘delivery service partners’ and are classed as self-employed. This means they are not entitled to employment rights such as holiday pay and minimum wage.

However, Leigh Day is arguing that the work carried out by the drivers and how they fit into the business is dictated by Amazon and therefore these workers should have rights.

Drivers could be entitled to £10,500 per year they’ve worked

According to the law firm, drivers use an app that gives them estimated travel times between deliveries that they have to meet.

They are also unable to return undelivered parcels to the Amazon depot and must redeliver these – paying for the additional fuel – at the end of the day.

Drivers say after paying for the vehicle rental and insurance, they are often left with very little income.

Leigh Day believes the drivers could be entitled to an average of £10,500 in compensation for each year they have worked for the retailer. It means Amazon could face a bill of around £140 million, according to the Guardian.

Amazon is ‘short-changing’ drivers who have to work shifts

The firm has launched a group claim on behalf of two drivers and are looking for more to join the legal action.

Kate Robinson, a solicitor in the employment team at Leigh Day, said: “Amazon is short-changing drivers making deliveries on their behalf. This is disgraceful behaviour from a company that makes billions of pounds a year.

“Drivers delivering for Amazon have to work set shifts and book time off, yet Amazon claims they are self-employed.

“For drivers, earning at least national minimum wage, getting holiday pay and being under a proper employment contract could be life changing.”

Seb Maley, Qdos CEO, said this is the latest high-profile case to highlight the “confusing nature of employment law” that can leave businesses “engaging these workers unsure of their obligations.”

Government urged to define self-employment in law

He added: “It’s a stark reminder of the financial and reputational damage that engaging workers under the wrong employment status can cause. Needless to say, it’s crucial that employment status is assessed rigorously from the outset.” 

Andy Chamberlain, director of policy at the trade association for self-employed workers, IPSE, is urging the government to create a statutory definition of self-employment to “clear the confusion about employment status in the UK.”

He explained: “As with Uber, Hermes and other gig economy cases, this has emerged because there is a grey area between worker and self-employed status in the UK. This is because while the law clearly defines worker and employee status, there is currently no statutory definition of self-employed status. 

“At the moment, we are in the chaotic and untenable situation of only being able to define who is self-employed through seismic court cases like this. 

“We urge government to put an end to this and clear the confusion in the gig economy by creating a statutory definition of self-employment: to not only secure worker rights for those who should have them, but also to protect the freedom of true freelancers.”

By Contractor Weekly

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7 thoughts on “Amazon could be hit with £140m bill in employment status case”

  1. Gary Andrews

    Both clients and workers have given up looking for sanity in the flexible workspace. Amazon have taken advantage of the doublespeak we call a tax code in many ways.

    They are but a billionaire run multinational corporation exploiting a situation, but why is there this situation in the first place?

    In years gone by when hubristic governments described our flexible workforce as “the best in the world” they weren’t far wrong. It was the skills, flexibility and accessibility that made it worthwhile setting up a tech company in the UK. Now that’s all gone.

    From chip manufacturers to vacuum salesman none are staying without large government subsidies, the unsustainable economy has been laid bare for all to see.

    Don’t report it on the news, but we can see it from our windows. Everyday we loose a little more.

    • Paul

      The situation was honed by years of anti-competitive government funded by opaic lobby firms. The self-employed have been robbed of their body fat by cats so obese they buy whole countries and their easily swayed governments.
      Sunak is uniquely powerful as both fat-cat and chancellor.

    • Soprano

      TBH I think it’s daft that the courts are upholding these claims but employment law is archaic. Much as the government has borked up the contractor market, these clueless dimwits will only end up driving these firms to look into alternatives like automation.

  2. Sarah Murphy

    You can’t just say stuff like Brexit is done or that you’re levelling up or we’re global Britain or that you have a high wage, high productivity ‘plan’.
    In the end, you have to actually do something. You have to deliver.
    And you, Tory govt, are delivering jack shit.. just misery.

  3. RS

    Right. So truly self employed business owners like IT consultants servicing multiple clients to flexible performance based contracts *aren’t* self employed, they are employed and should have their rights to paid travel and accommodation expenses that make their Jobs tennable, removed. OK.
    …and Amazon delivery drivers who have full-time employment contracts with set shifts and regulations *aren’t* employees they are self employed. They do not get the business rights of full time employees and they can’t be taxed as such wither. OK.

    OH… and neither group in either scenario is entitled to holiday pay, sickness pay, bonus, health, or any form of career progression or pension.

    That sounds brilliant Rishi. Good job son. All perfectly understandable, you should get a bonus.

  4. XY

    As usual, the PCG/IPSE get involved an immediately start making things worse.

    Did it occur to these pests that if the government do define self-employment in law, that it wil lbe a rubbish definition AND somehow or other, it will exclude their members?

    IPSE are the twits who said contractors want “certainty” – and despite being warned that they would be given the certainty of being inside IR35… they kept on banging that drum and that’s exactly what happened. Most contractors are now inside IR35.

    I suspect they want to keep the IR35 saga going forever, since it’s the reason most of the mugs who are members actually join.

    Smell the coffee guys: IR35 “experts” and “services” no longer have an income if IR35 is resolved satisfactorily.

    • Soprano

      Agree, it’s certainty of a kind with “death and taxes”. The old regime wasn’t consistent, logical or certain but at least that meant there was less financial abuse of independent contractors… now you’re basically taxed more than a permie with none of the rights while inside IR35… smart.

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