Business secretary John Hutton is to clamp down on unnecessary employment tribunals by throwing millions of pounds at conciliation service Acas.
The government has today awarded Acas £37m to help prevent workplace disputes unnecessarily going to employment tribunals.
The funding will allow the tribunals advice service to boost its helpline services and offer help at any stage of a dispute to encourage firms and employees towards an informal resolution.
Hutton said: "Our new system will strike a balance between ensuring workers can protect their rights through employment tribunals, while helping them to resolve disputes as early as possible."
The changes come as the new Employment Bill, currently before Parliament, gives tribunals the power to increase compensation by 25% if an employer 'unreasonably fails' to follow a statutory code of practice.
The new law will also scrap the statutory dismissal and grievance procedures, requiring companies to operate a fair procedure.
Over the next year, Acas will conduct pilot programmes to conciliate disputes that look set to become a claim to the tribunals. If successful, it will look to make this service available throughout the UK in 2009.
Acas chairman Ed Sweeney said: "This new investment will enable us to increase our effectiveness and spread the benefits more widely."
The investment is part of package designed to simplify the dispute resolution system, saving business and employees more than £175m a year, according to the Department for Business, Enterprise and Regulatory Reform.