Recruitment agencies are seeing a rise in the number of legal claims from temporary and permanent workers, clients and contractors.

Frances Lewis, partner and head of recruitment sector group at Blake Lapthorn solicitors, said she believed that it was a gradual rather than a massive upturn in claims — but added that she only gets cases that recruiters are going to defend. Many are paid off quickly to avoid costs, she added.

Dawn Marriott-Sims, managing director, Capita Resourcing, has also seen an increase in the number of claims. “Yes, there is a rise in claims from workers, but it’s across the board — not just from temporary workers, but also permanent employees.

“There have been more cases against us as a recruitment agency in the past two years than over the previous five years; not just discrimination claims — all types.”

Lewis said that a number of factors accounted for the rise. Clients looking to save costs is just one factor. “Particularly in the financial sector at the moment, if the end client is looking to make cuts it is often the contractor who loses out. The contractor could then look around for a reason that he is being discriminated against.”

“Because discrimination cases are less than straightforward, they can go on and on,” she explained, “costing huge sums in legal fees and a divergence of management time, so invariably recruiters settle.”

Marriott-Sims agreed with Lewis that staffing firms, even more fearful of protecting their reputation in today’s climate, prefer to settle out of court.
“Discrimination cases, in particular, are never clear cut, as you’re often relying on hearsay evidence from both parties.”

Clive Lewis, managing director at workplace mediation provider Globis and board member of the Civil Mediation Council (CMC), told Recruiter that although the CMC didn’t have specific data, he “wasn’t at all surprised” in the rise in claims against agencies.

“With legislation moving more in favour of agency workers, bringing their rights in line with permanent employees, there would seem to be
more cases,” he said.

However, provisional figures from the Employment Tribunals Service (see below) show that the number of claims — not just in the recruitment sector — for the past financial year could be down.

When it comes to tribunals, though, the full effects of therecession might not be known for some time. The recession may not have had an impact in all businesses, so people may not yet have been made redundant; others may be going through their corporate appeals procedure; or
some may have submitted their initial claim form (ET1) but may be successful with mediation services.

Jim Allison, managing director of insurance services firm Allison & Partners, which specialises in the insurance needs of recruitment agencies, told Recruiter: “Five years ago, none of this would’ve been happening, but with employee rights coming to the fore and the increase in ‘no win, no fee’ companies, the number of claims has erupted. People know their rights — there’s more awareness. The possibility of getting more
money is the real driver.”

Lewis agreed: “In the current climate, claimants have little to lose if their contract is terminated.”