What Is the Difference between Fixed Term Contract and Permanent One

When it comes to employment, there are two main types of contracts: fixed term and permanent. Both have distinct differences that can affect both employers and employees. Here`s a closer look at the difference between a fixed term contract and a permanent one.

Fixed Term Contract:

A fixed term contract is a type of employment agreement that is set for a specific duration of time. This means that the contract of employment is pre-determined and has a fixed end date. Generally, this type of contract is used in a situation where a company needs an employee for a specific project or task, or to cover a temporary absence of an employee.

Fixed term contracts provide both the employee and employer with flexibility. For the employer, this type of contract allows them to quickly get the resources they need to complete a project without having to worry about long-term costs. For the employee, they can gain experience in a specific field and can plan their work around a fixed schedule.

Permanent Contract:

A permanent contract, on the other hand, is an open-ended employment agreement that has no fixed end date. Once an employee is hired under a permanent contract, they are expected to work with the company indefinitely. They are entitled to all statutory benefits such as paid vacation, sick days, and maternity or paternity leave, among others.

Permanent contracts offer employees job security and provide the employer with a stable, long-term employee. The employee is typically better compensated than an employee under a fixed term contract and often receives additional benefits such as health insurance and retirement savings.

The Main Differences:

The main difference between fixed term and permanent contracts is how long the contract lasts. With a fixed term contract, the employee works until the contract`s end date, while a permanent contract is indefinite. Additionally, employees under a fixed term contract are less likely to receive the same benefits and perks as employees under permanent contracts.

Which Contract is Right for You?

Choosing between a fixed term and permanent contract depends largely on your own goals and priorities. Fixed term contracts offer flexibility and the opportunity to gain experience in a particular field, while permanent contracts offer job security and long-term benefits. Ultimately, the decision depends on your career goals and what you hope to achieve with your employment.

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