Business leaders have called for changes to help speed up employment tribunals, claiming that the system was “failing” both employers and workers.

The CBI said weak claims should be “weeded out”, early settlements should be encouraged and claims should be dealt with more efficiently when they reach the tribunal stage.

In its submission to the government’s consultation on resolving workplace disputes, the CBI said a “proportionate” fee should be introduced for every tribunal claim.

The CBI’s chief policy director Katja Hall said: “It’s always regrettable when the relationship between employer and employee breaks down to the point where a tribunal claim is made.

“But when this happens, both sides deserve a system that is consistent, quick and keeps legal costs to a minimum. Instead, we are saddled with a tribunal system that is expensive, stressful and time-consuming for all parties.

“Surely it’s in everyone’s interests for cases with merit to be heard quickly and settled, while weak claims are swiftly identified and weeded out. We’d like to see more workplace disputes being resolved before they reach tribunal.”

The CBI pointed out that claims had increased by 173 per cent since 2005, and there was an “ever-increasing” backlog of cases.

TUC general secretary Brendan Barber said: “While it’s in everyone’s interests to have quick and efficient tribunals the CBI conveniently forgets that bad employers make life hard for staff, not the employment tribunals system.

“These proposals will strengthen the hand of unscrupulous employers by pricing low-paid workers out of the system.

“The government, egged on by business lobbyists, is boosting bad employment practices rather than economic growth.”