Holding people in immigration removal centres for an undefined period of time is putting 'considerable stress on detainees as well as on their families' according to the Church.
The Mission and Public Affairs Council of the Archbishops' Council has made a submission to a parliamentary inquiry into immigration detention.
It's urged the government to consider an 'automatic bail hearing after seven and then 35 days - as provided for by law in 1999, but never brought into effect.'
It means the Church is now at odds with the two main political parties on immigrations.
Both Labour and the Conservatives have toughened their stance on the number of people being allowed into the UK.
According to the Guardian, Jonathan Clark, bishop of Croydon, who chairs the Churches Refugee Network, said: "The main political parties have taken a judgment that they cannot say anything on this issue because they feel it will lose them votes by the million.
"So it has been left to those who don't seek re-election to speak out."
In the submission the Church raises concerns about the impact holding asylum seekers in detention is having on immigration case reviews.
It said: "There is some evidence that the lack of a legal time limit means that there is little pressure on caseworkers to progress cases as quickly as possible.
"The monthly letters sent to each detainee about their continuing detention often seem to record little or no activity since the previous month.
"At least in prison most people are on determinate sentences and know when at the latest they will be released, while those on indeterminate sentences at least know what sort of things they should be doing in order to make it more likely that they will be released sooner.
"The level of distress is significantly higher in IRCs [immigration removal centres] just because of the constant uncertainty."
In a statement the Home Office said: "Detention is used as a last resort when people are found not to have a right to be in the UK and will not leave voluntarily, or when there is a serious risk they will abscond from bail.
"When we do detain people, it is for the minimum time possible, and the majority of detainees are held for less than two months.
"Detainees' welfare is extremely important and we are committed to treating all those in our care with dignity and respect."