EMW found the number of outstanding Employment Tribunals Service cases almost quadrupled from 144,900 cases in 2007 to 530,400 at the end of 2011, with new cases continuing to outstrip completed ones.
Louise Holder, employment principal at EMW, said: "The tribunal system is completely over-stretched. Cases are continuing to pile up, leaving both employees and employers in limbo. Longer case lead times mean more resources and time are used up that a business could spend on something else. It can add to financial uncertainty too, as businesses may end up spending prolonged periods of time with the threat of a financial penalty hanging over them."
The Government has announced plans to reform the system, including proposals to require all potential tribunal claims to be submitted for conciliation to Acas (the Advisory, Conciliation and Arbitration Service) first. But EMW is concerned this would merely move the problem from one part of the system to another.
Holder added: "Moving where the caseload falls won't help matters: it just moves the bottleneck from one poorly-equipped part of the system to another. Acas already has a backlog of its own, which a wave of new cases will only add to."
"The Government has also said that it expects to find efficiency savings from the changes, but, going by previous experience of expected government efficiency savings, they should be ready for disappointment: these savings are always difficult to achieve. This isn't the type of change that the tribunals system needs."
"The Government should focus more on its proposals that might speed up the tribunal process, such as looking at alternatives to tribunals, or reviewing tribunal procedures. Thanks to the uncertain financial climate, the employment tribunal system is going through a busy period so being able to deal with the increased caseload is key."