Human cloud food courier firm Deliveroo will pay a group of 50 of its riders a six-figure payout in a settlement over employment rights.

The claim, brought forth by law firm Leigh Day, argued that the Deliveroo riders had been unlawfully denied rights, including the legal minimum wage and paid holiday, after being categorised as self-employed contractors.

The Deliveroo proceedings follows recent cases involving the gig economy such as Hermes, Pimlico Plumbers,  Addison Lee, and Uber which all ruled that its workers should be considered as employees rather than as self-employed, independent contractors.

Annie Powell, a solicitor at Leigh Day's employment department, 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.”

“We are calling on Deliveroo to change their practices now, to ensure that riders are paid at least the minimum wage and receive holiday pay,” Powell said. “We also believe that Deliveroo should implement a compensation scheme for all riders who worked under the contract in question in this case, and all previous contracts. This scheme should compensate riders for Deliveroo’s failure to pay the National Minimum Wage as well as paid holiday.”

Powell added that if Deliveroo fails to compensate riders voluntarily, then current and former riders can bring further claims

A spokesperson for the London-based firm 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 settlement of the case was set to be heard in mid-July. In November 2017, the Central Arbitration Committee ruled that Deliveroo’s riders were self-employed contractors and not employees.

The Committee announced that because Deliveroo riders have the right to assign a substitute to do their work, they were self-employed contractors. However, the Independent Workers Union of Great Britain, which had first brought the case to the Committee was given permission by the high court to launch a full judicial review.

Earlier this month it was announced that Deliveroo would face an inquiry by the Work and Pensions Committee over the pay and conditions of its riders.