The Confederation of British industry (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.
Katja Hall, the CBI's chief policy director, said: "It is 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 is in everyone's interest for cases with merit to be heard quickly and settled, while weak claims are swiftly identified and weeded out. We would like to see more workplace disputes being resolved before they reach tribunal."
The CBI pointed out that claims had increased by 173% since 2005 and there was an "ever-increasing" backlog of cases.
TUC general secretary Brendan Barber added: "While it is in everyone's interest 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."
A Business Department spokesman responded. "We have heard loud and clear the concerns from businesses up and down the country that the system has become too costly, takes too much time and that it is too easy to make unmerited or vexatious claims," he said.
"That is why we are consulting on important reforms to the system and we would encourage all those with an interest to contribute. Requiring all potential claims to be sent to Acas first should reduce the number of claims that actually reach a tribunal - reducing stress and costs for both parties."
