'Rogue' companies refuse to pay

Disreputable firms are cheating workers by refusing to pay up when they lose employment tribunal cases, a new report has revealed.

One in 10 workers who won their tribunal case did not receive their money, a study by the Citizens' Advice Bureau (CAB) said.

This is because the court had no right to enforce the awards it made.

"Rogue" firms had calculated that they could ignore employment tribunals with impunity, the charity claimed.

Most workers denied their awards were in low-paid , low-skill jobs such as catering and cleaning, and a "significant" minority were migrants, said the CAB.

'Undermines credibility'

In the report, entitled "Justice Denied", the CAB said the fact employment tribunals had no power to enforce their decisions was a loophole, and it urged the government to act to protect "vulnerable" workers.

The chief executive of the CAB, David Harker, said: "The ability of rogue employers to ignore tribunal judgement with impunity seriously undermines the credibility of the system with both workers and employers."

"The current system is grossly unfair, both to those claimants who don't receive compensation and to the vast majority of employers who pay the awards made against them", he said.

The CAB cited the case of one woman, "Nicola", who was sacked in August 2005 from her job as an accounts administrator because she was pregnant.

She was awarded £32,000 at a tribunal against her employer.

Legal action

But she did not receive any money as the company had ceased trading - even though its directors have continued to trade under a different company name.

Her only course of action would have been to sue the directors personally, but she had no money to pay for the action.

After the tribunal, she and her family of five, including a new-born baby, became homeless after their home was repossessed.

The CAB said that too often, to enforce an unpaid award, claimants had to enter into "bewilderingly" complex and costly legal action in the civil courts.

Many gave up the struggle because of frustration, anxiety or mounting expenses, said the charity.