George Osbourne has vowed to change employment law to make it tougher for workers to claim unfair dismissal against their employers, ending what he calls the “one-way bet against small businesses”.

The Chancellor has revealed that the qualification period, which determines how long an employee must have been working for an organisation before they can claim unfair dismissal, will be raised from twelve months to two years from next April.

It is claimed that these changes will give businesses more confidence to expand their workforce, whilst saving almost £6million a year.

Another change to the legislation that Osbourne has announced is the introduction of a tribunal fee, which employees will have to pay in order to launch an unfair dismissal claim and will only get back if they win.

Speaking to the Conservative Party conference currently being held in Manchester, Osbourne said: “I know it’s important to respect employment rights. But we also respect the right of those who spent their whole lives building up a business not to see that achievement destroyed by a vexatious appeal to an unemployment tribunal.

“So we are now going to make it much less risky for businesses to hire people.”

The move has been welcomed by the Confederation of British Industry (CBI), with director general John Cridland calling increase of the unfair dismissal qualification period a “very positive step”.

Cridland said: “We have been urging the Government to do everything it can to make it easier for firms to grow and create jobs, and this will give employers, especially smaller ones, more confidence to hire.”