Deliveroo will pay a six-figure sum to 50 couriers after losing an employment rights claim.
The couriers took the takeaway delivery firm to court after claiming they had been unlawfully denied holiday pay and minimum wage.
The workers were represented by the law firm Leigh Day. Solicitor Annie Powell from the law firm 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.”
“This settlement will make a real difference to our clients’ lives. Some of the riders we represented were on the breadline, earning hundreds and in some cases thousands of pounds below the national minimum wage over the time that they worked for Deliveroo,” she added.
A spokesperson for the group said: “This settlement has no impact on Deliveroo riders or our model; and allows us to continue to focus on creating the well-paid, flexible work that our riders value. Courts have repeatedly considered Deliveroo’s model and judged that riders working with us are self-employed.”
The foot delivery app is currently valued at over £1.5 billion. Bankers have suggested that the firm’s public offering will not occur for at least another 18 months.
The group’s rivals including UberEats and Just Eat (LON: JE) have seen their London-listed shares perform strongly.
This case is the latest success in a string of legal cases for gig economy workers. Earlier this month, the Supreme Court ruled that workers at Pimlico Plumbers were entitled to benefits including holiday pay.
Charlie Mullins, the group’s boss, called the judges’ decision “terrible”.