Anew disability act is needed to protect disabled people who are failed by the law, according to the first annual report from the Disability Rights Commission.

The report says a change in the law is needed to bring all employers under the Disability Discrimination Act. Currently, employers who have less than 15 staff - 80 per cent of British employers - are not covered by the legislation.

DRC chairperson Bert Massie said: "The government is introducing new protection rights for disabled people in 2004. But a new disability act is needed to plug the loopholes in current legislation."

The report reveals that in its first year the DRC took 65,000 calls on its helpline, 20,000 more than it originally anticipated, and it helped 2,200 people through its casework service. It also directly supported 41 key legal cases, which is expected to increase to around 75 in 2001-2.

One such case involved a local authority that dismissed an accountant with a history of depression and resulted in a £120,000 settlement.

The report says that the commission has also raised concerns with government over its plans to charge severely disabled people up to 55 per cent of their income to cover the cost of their personal assistants. It says: "Such a move would make it impossible for many of those affected to take up paid employment."

- Disability Rights Commission first annual report 2000-2001 from 020 7211 4059.