Four out of 10 managers report that the number of unfair dismissal cases has grown over the past year, according to a survey of 2,000 employers.
The Future of Work Programme report also finds that more than half the organisations surveyed report that the amount of time managers spend on employment-related issues has risen in the past 12 months.
Funded by the Economic and Social Research Council, the study finds that one in six firms have reported an increased wage bill for legal advice about employment-related issues.
Stephen Hill, one of the report's co-authors, believes one of the reasons for the increase in the number of unfair dismissal cases is the growing compensation culture in the UK.
"There is an increase today of people in all areas of life who are taking legal recourse," he said.
He also highlighted the increasing complexity of employment legislation affecting the workplace as a reason why managers are spending more of their time tackling issues in this area.
The research reveals that most organisations are doing no more than the legal minimum required to meet the family needs of women employees.