A group of 50 Deliveroo couriers will share a six-figure payout from the takeaway delivery firm in a settlement of an employment rights claim.

The riders, who were represented by the law firm Leigh Day, argued that they had been unlawfully denied rights, including the legal minimum wage and paid holiday, after being labelled self-employed contractors.

The case was to be the latest in a string of similar employment rights claims, against Hermes, Uber, Addison Lee, City Sprint, Excel and eCourier, which have that ruled gig economy drivers and couriers have “worker” status with more rights than independent contractors.

Annie Powell, a solicitor in Leigh Day’s employment department who represented the riders, 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.”

Powell called on the company to change its practice and implement a compensation scheme for all riders on similar contracts.

Deliveroo said it was pleased to have reached the settlement, which was first reported by Sky News, without an admission of liability.

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, which was due to be heard by an employment tribunal in mid-July, comes after the high court backed a decision by the central arbitration committee, which considers union recognition cases, that Deliveroo riders were self-employed contractors.

The committee concluded that because riders were able to pass on a job to a substitute, they were not obliged to provide a “personal service” and therefore could not be classified as workers.

However, the high court gave the Independent Workers Union of Great Britain permission to launch a full judicial review of the workers’ rights to collective bargaining based on human rights grounds. Deliveroo’s hiring conditions are also to be scrutinised by MPs.