At the beginning of November 2010, Lord Young confirmed that the Government is to consider increasing the period of qualifying service required for 'ordinary' unfair dismissal claims from one year to two years.

The current position is that generally only employees with one year's continuous employment at the effective date of termination can bring a claim for unfair dismissal. Increasing this to two years will inevitably reduce the number of 'ordinary' unfair dismissal claims brought against employers.

The idea is that this is one of the steps that the Government could take to help support small businesses. The Government's 'Backing Small Business' document explains that Lord Young will investigate various changes which could be implemented to make the Government more small and medium-sized business friendly. Lord Young is due to report back in this regard by Spring 2011.

Employers should, however, note that in line with the existing qualifying period of one year, the new extended qualifying period would not apply to certain forms of 'automatically' unfair dismissal. These include, but are not limited to situations where the dismissal is for a reason connected with statutory maternity, paternity, adoption, parental or dependent care leave; for a health and safety reason; for a reason connected with rights under the Working Time Regulations; and/or for making a protected disclosure.