In our June article The AI assisted Applicant we explored the growing use of AI within recruitment and the need for employers to prepare for upcoming employment law changes. As the legislative landscape continues to evolve, employers are increasingly reviewing how they recruit, onboard and manage new employees.

One area that is often overlooked is whether the contract being issued accurately reflects the nature of the role, particularly where a fixed-term arrangement may be more appropriate.

From 1 January 2027, employees who commence employment on or after 1 July 2026 are expected to gain protection from unfair dismissal after six months’ service, rather than the current two-year qualifying period. While the final legislation is still being developed, the proposed changes are prompting many employers to take a closer look at their recruitment and employment practices.

What Is a Fixed-Term Contract?

A fixed-term contract is an employment contract that ends on a specified date or when a particular project, task or event has been completed.

Common examples include:

• Covering a period of maternity leave.
• Providing additional support during a busy seasonal period.
• Working on a specific project with a defined end date.
• Providing temporary resource while a recruitment exercise is being undertaken.

Why Does the Contract Matter?

We have seen situations where an individual is recruited to meet a temporary need, but is issued with a standard permanent employment contract.

Whilst this may appear to be a minor administrative issue at the outset, it can create difficulties later if the employer’s intention was always for the role to be temporary. The contract should accurately reflect the reality of the employment relationship from day one.

A well-drafted fixed-term contract should clearly set out:

• The business reason for the fixed-term arrangement.
• The anticipated end date, or the event that will bring the contract to an end.
• Any notice provisions that apply.
• The employee’s rights and benefits during the period of employment.

Without this clarity, employers may find it more difficult to demonstrate that the role was genuinely intended to be temporary.

Planning Ahead

Where there is a genuine short-term business requirement, employers should consider from the outset whether a fixed-term appointment is more appropriate than a permanent hire.

Once in place, these arrangements should be actively managed. Keeping track of end dates and reviewing the ongoing need for the role well in advance can help avoid uncertainty and support better workforce planning.

Don’t Leave Decisions Until the Last Minute

Whether employing someone on a permanent or fixed-term basis, proactive workforce planning is becoming increasingly important.

As a fixed-term contract approaches its end date, employers should consider:

• Whether the original reason for the contract still exists.
• Whether the arrangement should end as planned.
• Whether there is a genuine business need to extend the role.
• Whether a permanent position is now more appropriate.

Looking Ahead to the New Unfair Dismissal Qualifying Period

Whilst we await the final details of the legislation, it is currently anticipated that employees who commence employment on or after 1 July 2026 will acquire unfair dismissal protection after six months’ service.

As currently proposed, employers should not assume that employees engaged on fixed-term contracts will be excluded from these protections. The expiry of a fixed-term contract is treated as a dismissal in law and, depending on the circumstances, may give rise to unfair dismissal considerations once the relevant qualifying service has been met.

Employers should therefore carefully monitor the duration of fixed-term contracts and ensure that decisions regarding extensions, renewals or expiry are considered in good time. Where there is a genuine business need for a fixed-term arrangement to come to an end, attention should be given to timing and any contractual notice requirements that may apply.

As further details emerge, employers should keep their recruitment and contractual arrangements under review to ensure they remain aligned with legal requirements and business needs.

Article written by Michelle McHugh, Advo HR Consultant