A business lobby group says changes to personal grievance laws are needed, to put more focus on the substance of disputes and less on the process followed.
The Government is examining potential changes to the system and whether the law is fair to employers and employees.
The Council of Trade Unions (CTU) says the law is working well but Business New Zealand says employers are scared of a nitpicking court process.
Business New Zealand chief executive of Phil O'Reilly says vexatious claims also put companies off hiring new employees, especially unskilled or unqualified workers.
"What we need to be careful about is that we don't exclude people from the workforce unnecessarily because of fears that if things go wrong they're going to get an ambulance-chasing lawyer or representative after them," he says.
CTU president Helen Kelly says the Government may extend exclusions that cover the first 90 days of employment in small businesses to 200 days, introduce the exclusions to larger businesses or change the requirements for fair process - all of which she says would about more injustice for workers.
Labour Minister Kate Wilkinson says she is not ruling anything out in a review of personal grievance laws. She says she has anecdotal evidence that the law might not be working.