Its proposals include strengthening the role of judges to shorten hearings by discounting irrelevant evidence, and giving the department for business responsibility for administering the system instead of the ministry of justice.
With Government figures showing a relentless rise in the backlog of claims waiting to be heard despite lower volumes overall, and the average claim taking around 18 months to process, the UK's leading business group says delays caused by the system are leading to poor justice for employees with valid claims, and soaring costs for businesses.
In The Right Balance - Delivering effective employment tribunals report, the CBI says the Government has set in motion a series of valuable but piecemeal reforms, some of which have become bogged-down in the system.
Tribunals need to be re-focussed on speedy and informal dispute resolution by tackling the root of the problem – that tribunals have become too much like courts, which was never their role.
Katja Hall, CBI chief policy director, said: "The processes of the High Court do not belong in an employment tribunal, but the current system prioritises legal formalities over speedy and effective dispute resolution.
"Despite a falling number of claims, the system is still taking too long to process them, as it has been for years. This is why tribunal reform is businesses' main priority for change in employment law.
"We need wholesale culture change throughout the system, and that needs to start at the top with judges playing a greater role in questioning, discounting irrelevant evidence, and focussing on the facts at the heart of disputes."
Hall added: "Bringing responsibility for the tribunal system under one roof in the Department for Business will make the system more coherent, user-focussed and less adversarial. It will mean that the system refocuses on serving its customers - employers and employees."