August 20, 2026

Employment Rights Act: Is the FTC Still the Right Solution for Temporary Leadership?

Written by Charlotte Whitehouse

For years, the fixed-term contract has offered organisations an attractive middle ground.

You don’t need to make a permanent hire, but you need someone experienced for a defined period. So, you bring them in for six, nine or 12 months, with a clear end date.

Simple, right?

From January 2027, That Calculation Becomes More Nuanced

The Employment Rights Act 2025 introduced a range of changes to employment law, with further measures coming into force during 2026 and 2027. One of the changes most relevant to organisations using fixed-term contracts is the reduction in the qualifying period for ordinary unfair dismissal protection from two years to six months.

For employees on fixed-term contracts of six months or more, this means employers may need to give greater consideration to the reasoning, decision-making and process behind ending or not renewing the contract.

These changes to employment rights and FTCs don’t mean fixed-term contracts are going away, but they do give organisations a reason to reconsider an assumption that has been around for years:

If we only need someone temporarily, an FTC must be the most flexible option.

Perhaps not…

There’s a Difference Between Temporary Employment and Temporary Expertise

And this is where the conversation becomes particularly interesting for senior leadership.

Consider an organisation going through a major transformation where they need an experienced Transformation Director for the next 9–12 months to lead the programme, establish the right governance, bring stakeholders together and get the organisation through a critical phase.

Historically, an FTC might have been the obvious answer but what does the organisation actually need? An employee for 12 months? Or access to someone with the expertise to deliver a specific outcome?

Those are two different requirements.

Interim leadership can provide experienced leadership during a defined period of change, turnaround or transition.

Fractional leadership can provide senior-level expertise where the organisation doesn’t need that capability five days a week.

A permanent appointment makes sense where the organisation needs that capability indefinitely.

And an FTC can still be absolutely the right choice where the organisation genuinely needs an employee for a defined period.

The point isn’t that one model is better than another, it’s that the model should follow the requirement.

What Does the Employment Rights Act Mean for FTCs?

The Employment Rights Act 2025 introduces a number of changes to employment law, but one of the most relevant for organisations using FTCs is the reduction in the unfair dismissal qualifying period.

From 1 January 2027, the qualifying period will reduce from two years to six months. This means employees who have reached the six-month point will generally have greater protection than they would under the current two-year qualifying period.

The important distinction is that this does not change the fact that the expiry of a fixed-term contract can amount to a dismissal in law. Instead, it means organisations may need to think more carefully about decisions to end an FTC early or not renew it where an employee has reached the relevant qualifying period.

That doesn’t mean employers can’t use FTCs or end them when the agreed term expires, but it does mean that organisations need to think carefully about why the contract is ending, whether there is a potentially fair reason, whether an appropriate process has been followed, and whether there is a clear audit trail supporting the decision.

For example, if a time-limited project finishes earlier than expected or the original need for the role changes, there may be a legitimate reason for the FTC to end. The question is whether the organisation has made and documented that decision appropriately.

And that potentially changes the risk calculation behind the traditional FTC.

Should Organisations Stop Using FTCs?

No. There are plenty of situations where an FTC remains a sensible and appropriate solution.

For example, where:

The question is less about whether FTCs are still viable and more about whether they are always the best fit for temporary leadership requirements, as that’s an important distinction.

The rise of the alternative: interim and fractional leadership.

As organisations become more comfortable with flexible leadership approaches to leadership, there are now more options available than simply:

Permanent or FTC?

Permanent is best suited to organisations with an ongoing need for the capability. You are building long-term leadership capacity and want someone fully embedded in the organisation.

Fixed-term contract isuseful where there is a genuine requirement to employ someone for a defined period.

The individual becomes part of the organisation as an employee, with the associated employment rights and responsibilities.

Interim is designed around a defined period of leadership or a specific business challenge.Interim executives can step into critical roles, lead transformation, manage change, stabilise an organisation or provide specialist expertise when it is needed most.

Fractional is particularly useful where an organisation needs senior expertise but doesn’t require a full-time appointment. Fractional executivescan provide access to experienced leadership, such as a CFO, CPO or COO, for a proportion of the working week where a full-time appointment isn’t required.

For example, a business might need a CFO two days a week, a CPO three days a week or a COO for a defined period while the organisation builds its longer-term capability.

The value isn’t simply that they’re working fewer days. It’s about accessing the right level of expertise without creating a full-time requirement where one doesn’t exist.

For organisations, this can create greater flexibility, while for experienced professionals it can create opportunities to bring their expertise into organisations where a permanent or full-time role isn’t the right fit.

The Question Businesses Should Be Asking

The Employment Rights Act 2025 isn’t going to make the FTC obsolete, but alongside wider changes to employment rights and the evolving expectations of the workforce, it could encourage organisations to ask a more fundamental question before making their next temporary appointment:

Are we looking for a temporary employee, or temporary access to expertise?

If the requirement is genuinely an employment role for a fixed period, an FTC may still be the right answer.

But if the organisation needs someone to deliver a transformation, navigate a period of change, provide specialist leadership or fill a capability gap, an interim or fractional leadership appointment could offer a more appropriate model.

The starting point shouldn’t be:

“We need someone for 12 months.”

It should be:

“What do we actually need this person to achieve?”

That shift in thinking could become increasingly important as organisations navigate the changing employment landscape.

Choosing the Right Model for the Work

There is no one-size-fits-all answer. The right approach will depend on the organisation, the individual requirement, the level of expertise needed and the outcome you’re trying to achieve.

But as further Employment Rights Act measures come into force, it’s worth looking beyond the traditional permanent vs FTC decision, because flexibility isn’t simply about how long someone stays.

It’s also about how you access the expertise you need, when you need it, and what you need that person to achieve.

The future of flexible leadership isn’t about finding ways around employment rights. It’s about making better decisions about the type of capability an organisation actually needs, and choosing a model that works for both the organisation and the individual.

Let’s Continue the Conversation!

At Practicus, we work with organisations across permanent, fixed-term, interim and fractional leadership appointments, helping them find the right approach for the challenge in front of them.

Whether you need help identifying and appointing the right leader, or you’re considering a fractional leadership appointment and need strategic advice from our Advisory network on what your organisation actually needs, our team can help you navigate the options.

From defining the role and choosing the right model to finding the right person, we’re here to help you make the right leadership decision for your organisation.

Get in touch!

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