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.
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.
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.”
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.”