The Government is being urged by MPs to slash the fees charged for bringing cases to industrial tribunals amid concerns that employees are being denied access to justice.
The Commons Justice Committee said there had been a "precipitate drop" of almost 70% in the number of cases being brought after new fees were introduced in July 2013.
While it was too early to judge whether they were deterring "vexatious" claims as the Government intended, the committee said there was clear evidence they were acting as a disincentive to the early resolution of disputes if an employer thought a claimant was struggling to raise the fee.
"In many cases the existence of fees erects a disincentive for employers to resolve disputes at an early stage," it said.
"The arguments presented to us by the Government in this inquiry ... have not swayed us from our conclusion, on the evidence, that the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims.
"We recommend that the overall quantum of fees charged for bringing cases to employment tribunals should be substantially reduced ... and further special consideration should be given to the position of women alleging maternity or pregnancy discrimination."
The committee also condemned an "unjustified" increase in the fee for bringing a divorce petition from £410 to £550 - taking it to roughly double the cost to the courts of providing the service.
"It cannot be right that a person bringing a divorce petition, in most cases a woman, is subject to what has been characterised in evidence to us as effectively a divorce tax," it said.
The MPs also expressed concern at proposals for an increase in the fees in the Immigration and Asylum Chamber of up to six-fold so that all the costs could be recovered.
"If these proposals are proceeded with, there is a danger that they will deny vulnerable people the means to challenge the lawfulness of decisions taken by the state about their immigration and asylum status," the committee said.
A Ministry of Justice spokesman said: "We welcome this report and will consider the findings carefully.
"The cost of our courts and tribunal system to the taxpayer is unsustainably high, and it is only right that those who use the system pay more to relieve this burden.
"Every pound we collect from fee increases will be spent on providing a leaner and more effective system of courts and tribunals.
"At the same time, we've made sure that the most vulnerable and those who cannot afford to pay won't have to."