IT and telecoms firms are more worried than any other sector about being taken to employment tribunals by their staff.

According to a Department of Trade and Industry (DTI) survey of over 500 small and medium-sized businesses conducted in April, nine out of 10 IT and telecoms employers are concerned about the damage a tribunal could do to their reputation, while 85 per cent fret about the financial implications.

More than three out of five of the survey's respondents had experienced a workplace dispute and, of these, almost 90 per cent had suffered more than five. The DTI said this illustrates that businesses in the sector are failing to learn from their past experiences.

The results come as the government unveils new dispute resolution legislation, which comes into force this October.

The legislation will require all businesses to put in place minimum dismissal, disciplinary and grievance procedures, in a bid to improve working relationships between employers and staff.

According to the DTI, around 800,000 firms currently either have inadequate or nonexistent procedures for dealing with disputes.

Last year the Employment Tribunals Service dealt with 98,000 work disputes ranging from arguments over pay and conditions to sexual and racial harassment cases. The government estimates the new legislation will bring this number down by about a third.

Employment relations minister Gerry Sutcliffe said in a statement: "Employment tribunals have a vital role to play ensuring individual employment rights are not abused.

"But it is clear that there are too many cases that could be resolved in the workplace, rather than ending up at tribunals. This costs time and money, creates unnecessary stress for both parties and slows down the tribunal system."