The professional body has called for the introduction of a 'single jurisdiction' system, through which all cases would be allocated to one of four 'levels' following an attempt to resolve the dispute through early conciliation. Alternative dispute resolution 'exit points' would be available throughout the new structure, and all appeals heard by the Employment Appeal Tribunal (EAT), it said.
It has also suggested that appeals in the most complex cases could be referred directly to the Court of Appeal, rather than to the EAT.
The Law Society said that its proposals would cut the "complexity and cost" of the current system, resulting in "significant savings" for the Ministry of Justice (MoJ). This would enable the government to scrap the current system of employment tribunal fees, which the body said had "widened the gap in the 'two-nation' justice system identified by the lord chancellor".
It is submitting its report to the MoJ as part of its review of the effectiveness of last year's tribunal reforms, which included the introduction of fees.
The current fee regime was introduced on 29 July 2013, partly to transfer some of the costs of operating the tribunals from the taxpayer to those that use the service. Parties now have to pay an upfront fee to raise a claim, followed by a further 'hearing fee' once the case is referred to a tribunal. Claims are subdivided into the administratively simple 'Type A' claims, with fees of £160 and £230 respectively; and 'Type B' unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to EAT cases.
Although a remission system operates to exempt people on low incomes from having to pay the full fees, the introduction of tribunal fees has coincided with a dramatic decrease in the number of cases brought to the employment tribunals. The latest statistics show that the number of disputes proceeding to the tribunal has fallen by over 60% since the introduction of the fee regime, although this also coincided with the introduction of mandatory conciliation via the government-backed Acas service before a case can proceed.
The Law Society's report proposes the introduction of an easy to use system with a single entry point, at which cases would be assigned to the most appropriate 'level'. These would range from simple, straightforward Level 1 cases, resolved through document-based decision-making, to Level 4 cases to which the full civil litigation principles and costs orders would apply. Most cases currently heard by the tribunal system would enter at 'Level 3', and be given the option of neutral evaluation and alternative dispute resolution at an early stage.
Law Society president Jonathan Smithers said that the idea behind the new regime would "make sure that cases are dealt with in the most appropriate way".
"The single jurisdiction would increase awareness of different types of alternative dispute resolution methods, including the benefits of solving the dispute before the hearing," he said.
"Employment tribunals must work for employers and employees. People should not be discouraged from bringing legitimate claims or from opposing them because of the cost or complexity associated with the process," he said.
Last week, the Scottish Government announced that it would abolish tribunal fees once it is "clear on how the transfer of powers and responsibilities" from Westminster to the Scottish Government under the Smith Commission agreement will work. It also intends to consult on how it can "best support people's access to employment justice", according to its 'programme for government' for 2015/16.