Making decisions on employment status for a growing business can be an overwhelming perspective. All the types of employment viz. full-time, part-time, fixed-tenure, freelancers, permanent and casual workers have a different purpose. Each type has its respective pros and cons. Brooding over all the available options can ultimately leave an employer disoriented and jumbled.
The following article explains the difference between Fixed term and Permanent contracts. This shall be of great use for the employees who are looking for job opportunities as well as the employers who are keen in hiring the right person for their firm.
Fixed Term Contracts
Fixed-term employees are the ones who have an employment contract with a company. This contract ends after a particular tenure, or on the completion of a specified task. They are not counted as fixed-term if they are a trainee or contracted through an agency. A fixed-term employee is preferred when a company requires a skilled person for the given project. Such contracts may also be offered to cover maternity or sick leave. If a fixed-term employee completes four years in the company, then the inpidual may automatically become a permanent employee.
If the fixed-term contract is taken up it can be beneficial for your career to become permanent. Sometimes an employer has a temporary period of job role for example if an employee needs to take maternity leave or there is a project which will last a few months. Fixed-term contracts are a way they can flexibly take on staff. There are many types of fixed-term contracts. The Fixed Term Employee Regulations are designed to prevent the unfavorable treatment of fixed-term employees as compared to permanent employees. But, the regulations have certain exceptions on agency workers, students or trainee. Fixed-term employees will be paid their salary and will also pay the full amount of income tax just as the permanent employees do.
Advantages of Fixed-Term Contracts
Following are some of the benefits of fixed-term contracts.
Disadvantages of Fixed-term Contracts:
A permanent employee is the one who is been hired specifically for a given position in an organisation. They do not have an expiry date on their employment.
Advantages of Permanent Contracts
Disadvantages of Permanent Contracts:
It is a commonly disbelieved that as compared to permanent employees, fixed-term employees have less employment protection and the belief persists that fixed-term contracts provide greater freedom over employment terms and termination. This misunderstanding can result in significant legal liabilities, including less favourable treatment of fixed-term employees, redundancy claims and unfair dismissal. We may see a growth in fixed-term contracts as employers continue to engage employees on what is perceived as a more flexible platform. So, when making this choice, always ask yourself: what is better for you - fixed-term contract or permanent?