Stiffer penalties are to be imposed on workers who bring "spurious" cases to employment tribunals, the Gov-ernment has announced.

Costs awarded against employees for "un-reasonable or vexatious" behaviour are to be increased from £500 to £10,000.

Tribunals will also be given new powers to strike out "ill-founded" claims which have no real chance of success.

Workers with a weak case will have to lodge a deposit of £500 instead of the present £150.

A new arbitration scheme is also to be offered as an alternative to a tribunal hearing.

Trade and Industry Secretary Stephen Byers, who has faced business calls for action to curb the increase in tribunals, said the changes were aimed at improving the system.

"There will be tougher penalties on both sides if they are bringing an unreasonable case and there will be greater deterrents for those people looking to bring an action which has little or no chance of success.

"I am concerned there are too many weak cases in the system causing significant delays for those with genuine claims. They also place unacceptable burdens on businesses and the taxpayer."

Tribunal caseloads have been rising by ten per cent to 15 per cent over the past few years and totalled 104,000 last year.

The Government recently raised the maximum compensation for unfair dismissal from £12,500 to £50,000.

The TUC said it would monitor the impact of the reforms to make sure that no genuine cases were hit.

General Secretary John Monks said the increase in tribunal cases was mainly due to employers not treating workers fairly.