The number of people taking companies to employment tribunals has collapsed by 70 per cent since the Government moved last year to charge employees for bringing cases, pricing many out of the system.

After intense lobbying by businesses, the Government imposed charges of up to £1,250 for employees to use the tribunal system last July. Figures out yesterday showed that the number bringing cases fell to 3,792 in the three months to June, 8,848 fewer compared to the same period a year ago. Lawyers said sex discrimination cases were down by two-thirds.

Unions said the figures proved the Government had given employers far too much power over their workers.

But the justice minister Shailesh Vara welcomed the news, saying: “Hardworking taxpayers should not be picking up the bill for employment disputes in tribunals and it is reasonable to expect people to contribute towards the £74m bill for the service ... The Government is on the side of people who want to work hard and get on.”

The data was also seen as adding weight to Labour’s new campaign to demand the rules be changed. The shadow Business Secretary Chuka Umunna said: “These new statistics show definitively that the system of employment tribunal fees put in place by the Government last year has erected a barrier to justice, locking out low-paid workers and preventing them from defending their rights at work.”

Mr Umunna pledged earlier this week to overhaul the tribunal system, making it free again but also quicker than the old system.

He added that the figures had fallen sharply because of the introduction in May of a new system meaning that anyone seeking to go to an employment tribunal must first go through an Acas early-resolution hearing to try and settle their dispute without going to court.

Lawyers said the hearings appear to be working well, although yesterday’s figures marked the third success quarter of massive falls in tribunal cases.

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While welcoming the reduction in cases, the dramatic extent of the fall-off demonstrated yesterday appeared to make even business lobby groups uncomfortable.

Rob Wall, the CBI’s head of employment policy, said: “The introduction of fees has deterred vexatious claims and those who seek to game the system. It’s a win for employers and employees. But we have never called for the level of fees the Government has introduced.”

He said he wanted fees to be set “well below current levels” and called for control of tribunals to be returned to the Department for Business.

John Allan, chairman of the Federation of Small Businesses, welcomed the fall in claims but said “Nobody wants to see excessively high fees prevent a worker from obtaining redress for a genuine grievance.”