THREE-QUARTERS of South East employers worry about the financial implications of being taken to an employment tribunal and seven in ten are concerned about the damage it could do to their business reputation, according to new research carried out for the Department of Trade and Industry.

Figures from the Employment Tribunal Service show that last year tribunals dealt with 98,000 claims based on work disputes, ranging from problems over pay and conditions, to racial and sexual harassment.

But research shows that in more than a third of those cases the individual and the manager had not discussed the problem before approaching an employment tribunal.

The survey, carried out among 500 small and medium sized UK businesses comes ahead of a new employment law, which comes into force in October, making it mandatory for all employers to have minimum dismissal, disciplinary and grievance procedures in the workplace.

The regulations will place new responsibilities on employers and employees to discuss workplace disputes when and where they happen in a bid to resolve them before going to an employment tribunal, thereby avoiding unnecessary litigation. Employees will usually be required to raise those problems with their employers before they can take a claim to an employment tribunal.

Employment Relations Minister Gerry Sutcliffe said: "We are introducing these new regulations to provide a framework for employers and employees to handle disputes in the workplace, ensuring that employment tribunals take their proper place as the backstop for individual employment rights rather than the first port of call.”