According to figures obtained last week from the Tribunals Service, there were 530,400 outstanding employment cases at the end of 2011, which represents a 17 per cent rise on the same period last year and an increase of 23,600 cases on the previous quarter.

And reflecting the views of venture capitalist Adrian Beecroft, who said that the fear of being sued by employees put employers off creating jobs, law firm EMW, which obtained the figures, said that the backlog was causing companies to devote time and money to tribunals instead of concentrating on business growth.

But in an online debate on the subject held by the Telegraph, TUC General Secretary Brendan Barber said that the number of new tribunal cases, around 60,000 per year, was relatively low compared to the size of the workforce in the UK.

He said: “All of this debate is based on a degree of mythology, The idea that employers are being taken for thousands and thousands of pounds, that there are armies of people lining up to take vexatious, frivolous tribunal claims, that is simply not a reality.”

However, Mr Beecroft’s reply was that myth or not, it was a real fear for employers. “The fact that it’s a myth doesn’t matter. The fact is, the people who we want to hire more people and grow their businesses believe that this is a huge problem,” he said.

And Louise Holder, employment principal at EMW said: “The tribunal system is completely overstretched. Cases are continuing to pile up, leaving both employees and employers in limbo. Longer case lead times mean more resources and time are used up that a business could spend on something else.”