The arbitration and conciliation service Acas saves employers, employees and the taxpayer almost £800m a year, according to a new report.
A study by the National Institute of Economic and Social Research found that every pound of taxpayer money invested in the employment relations service creates more than £16 in return.
The report analysed the six principal service areas at Acas and found that its work in resolving individual and collective disputes at work produced immediate savings to the economy of £313m, while the advice and guidance provided to employers and employees contributed a further £475m.
Savings in management time, and reductions in recruitment, absence and other employment costs were among the benefits for businesses from working with Acas. Employees benefited particularly from better employment prospects and avoiding a loss in earnings.
Employment relations minister Pat McFadden said: "Employment disputes are stressful for employees and costly for business. It is in everyone's interest to resolve problems quickly and without involving employment tribunals wherever possible. Acas services help to promote solutions which benefit everyone involved."
Acas chair Ed Sweeney said: "In business terms, this level of return is impressive and testament to the expertise and diverse services being delivered by Acas."
The government is set to announce new measures for resolving workplace disputes, which is likely to see an increased role for Acas in the future.