How use of Fixed Term Contracts will change in 2027

Given that the Government will be introducing a 6 month qualifying service for unfair dismissal from 1st January 2027 we expect to see a decline in fixed term contracts offered after 1st June 2026.

Currently and this unchanged by the Employment Rights Act 2025, non renewal of a fixed term contract is a dismissal. We expect to see less employers using fixed term contracts of six months plus and more employers using 5 month fixed term contracts.

Employers who have employed their employee on a fixed term contract of 6 months or longer can expect to see more employees decide to pursue them in the tribunals once the length of service to qualify for unfair dismissal changes.

Going forward we recommend two considerations:

1. A shorter probationary period for your apprentices hired on a fixed term contract, if they are not right for the organisation then the probationary period is not completed and they leave before they have 6 months service.
2. A trial period of employment before they commence an apprenticeship. Giving someone 3 months of fixed term contract to try working in the Early Years sector before they or you commit to a level 2 or 3 apprenticeship.

When it comes to the usefulness of fixed term contracts, we still feel they have their place however once the law changes the employer is going to need to demonstrate that the dismissal of someone on a fixed term contract is fair.

For any further information on our contracts, you can see the different types of contracts we offer over on our Shop.

If you need any assistance getting ready for the Employment Rights Act 2025, do contact the team on 01527 909436.