The coalition government has revealed it is embarking on reform of the employment law system.

Business secretary Vince Cable announced a raft of proposals designed to retain protection for employees, while "fundamentally" improving the way companies manage their staff levels.

He explained that although Britain has one of the most flexible labour markets in the world, businesses are still claiming there are barriers to growth.

Some 159 pieces of employment law were examined by the coalition and it is merging, scrapping or simplifying 40 per cent of these in the reform of the system.

Mr Cable added he wants tribunals to be a last resort for disputes in the workplace, due to the fact they are costly and time consuming for companies.

Reacting to the news, chief policy director of the Confederation of British Industry Katja Hall said: "We particularly welcome the changes to tribunals, including a rapid resolution scheme, which will allow faster justice for legitimate disputes."