The Forum of Private Business (FPB) is calling for a review of proposed changes to the dispute resolution process, claiming the reforms could "make a bad situation worse" for small employers.
Replacing the current mediation process with a new code of practice from the employment relations service Acas will simply add to the regulatory burden already placed on small firms, it claims.
The organisation insists the code, which is designed to simplify statutory dispute resolution procedures, is aimed at medium to large businesses and does nothing to support small employers.
It is therefore urging the government to rewrite the code to ensure that the procedures for businesses are clear and grey areas are eliminated.
"The revised code is shorter than the current code but it is the phraseology that needs to be simplified so that smaller organisations, which may not have human resources input, can more easily understand what is being proposed," said Ross Meadows, the FPB’s legal adviser.
The changes are being introduced in an employment bill which is currently being read in parliament and is scheduled to become law in April 2009.
Meanwhile, Acas has revealed that the number of employment cases passed onto it for conciliation has risen by 25 per cent in the last 12 months.