Employment tribunals are "too costly and complex" and make "inconsistent decisions", according to a government report.
Commissioned by Secretary of State Alistair Darling in December 2006, Michael Gibbons' review of the employment dispute resolution system highlighted a number of problems.
He noted that more should be done to help employers and employees resolve more disputes in the workplace, and recommends making the employment tribunal system simpler and cheaper "for users and government".
Chair of the Employment Lawyers Association Richard Fox welcomed the review, pointing specifically to the recommendation that fixed periods for conciliation be abolished altogether, arguing that a "less rigid, more flexible approach" was needed in the sector.
Fox noted that the current system was "defective in so many ways” and that “drastic change was always going to have to be introduced at some stage".
He added that greater use of the Advisory, Conciliation and Arbitration Service (Acas) would "produce the results the Government were hoping for two years ago".
"I feel the review is helpful," he said. "I don't think we can criticise it. He met a challenge that had to be faced".
Acas chair Rita Donaghy was encouraged that issues surrounding dispute resolution were being taken seriously, although was quick to point out that "the key is to prevent disputes happening in the first place through good employment relations".
Gibbons noted that the 2004 regulations were a "classic case of good policy, but [was an] inappropriately inflexible and prescriptive regulation".
Jane Moorman, head of employment at Howard Kennedy, welcomed the dismissal procedures and was glad that the proposals contained a focus on mediation.