Contact Us

Use the form on the right to contact us.

You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. 

Pod 6, The Engine Rooms, Station Road
Chepstow
Monmouthshire

01633 730907

For more than 10 years we have provided companies of all sizes and in a variety of sectors with uncomplicated, innovative and affordable human resources advice and on-site support ensuring that your people are an asset to your company and not a liability.

News

With the National Minimum Wage (NMW) now almost fifteen years old, and with another increase pending on 1st April 2017 HMRC have issued a list of the most elaborate excuses they've been given by employers for not paying the appropriate rates:

Six Months and Counting: The Unfair Dismissal Shake-up Temporary Contracts Can't Ignore

Alan Kitto

From 1 January 2027, the qualifying period for unfair dismissal drops from two years to just six months. For employers who lean on fixed-term or temporary contracts to cover short-term needs, this is a change worth planning for now, not in December 2026.

What's Changing

Under the Employment Rights Act 2025, the qualifying period an employee needs before they can bring an "ordinary" unfair dismissal claim is being reduced from 24 months to 6 months. The government has confirmed this applies to dismissals taking effect on or after 1 January 2027. At the same time, the cap on compensatory awards for unfair dismissal is being removed, so the financial exposure for getting a dismissal wrong is rising as well.

Day-one protections, for example, claims based on discrimination or whistleblowing, are unaffected by this change. They already apply regardless of length of service. What's changing is access to the general right not to be unfairly dismissed, which up to now has been out of reach for most short-service and temporary staff.

Why This Matters for Temporary and Fixed-Term Contracts

Letting a fixed-term contract come to an end without renewing it is treated in law as a dismissal, just like any other. Historically, most temporary workers haven't had the two years' service needed to challenge that decision on unfair dismissal grounds. From 1 January 2027, that changes: anyone who has been employed for 6 months or more will be able to bring a claim if their contract isn't renewed and no fair reason and process can be shown.

For any temporary contract that starts, or is extended, so that it ends on or after 1 January 2027, this means the end of the contract needs to be treated with the same care as dismissing a permanent employee. It will need to be justified by one of five potentially fair reasons: capability, conduct, redundancy, a statutory restriction (illegality), or "some other substantial reason", commonly how a genuine, time-limited business need is framed. A fair process will need to sit behind that reason too.

What Employers Should Do Now

A few practical steps are worth taking before the change lands:

Audit contracts that run into 2027. Identify any fixed-term or temporary arrangements that will still be live, or could be extended past, 1 January 2027, and flag the ones where the employee will have 6 months' service or more by then.

Document the genuine business reason from the outset. If a role exists to cover a specific project, secondment, or temporary spike in demand, record that clearly when the contract is agreed and revisit it if the contract is extended.

Build in a review point before any extension. Treat each extension decision as an opportunity to check whether the original reason for the fixed-term arrangement still holds, and keep a written record of that thinking.

Plan the ending, don't just let it lapse. Where a contract is genuinely coming to an end, follow a fair process, explain the reason, give appropriate notice, and consider whether the employee should be told about this at the point of any extension so nothing comes as a surprise.

Brief line managers. Managers extending temporary contracts need to understand that "it's only temporary" is no longer, on its own, protection from an unfair dismissal claim once the six-month threshold is reached.

The Bottom Line

The reduction to a 6-month qualifying period closes a gap that many employers have relied on when using temporary and fixed-term contracts. With uncapped compensation also on the horizon, the cost of getting this wrong is going up too. Contracts that run past 1 January 2027 need the same rigour as any other dismissal decision, starting with a genuine, well-evidenced reason and a fair process to match.

This article reflects the government's published implementation timetable as at July 2026 and is provided for general information. It isn't a substitute for tailored legal or HR advice on your specific arrangements.; please contact us if you have a specific question or situation that you need help with.