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Fixed Term Contract: meaning and benefits

2 Aug 2019
Rachel Robertson

Fixed Term Contracts


Recently, across the Business Support Temporary desk, there has been an increase in the number of organisations choosing to employ candidates on fixed term contracts rather than on a temporary basis. When it comes to choosing which basis to employ your candidates on there is no ‘right answer’; it all depends on your organisation and your particular business needs.

What is Fixed Term Employment?

A fixed term contract is used by organisations when they have a specific end date for the work required. This may be seasonal work, maternity cover, long term sickness cover or where funding has been provided for a specific project. To be a fixed term employee, the candidate will have a contract of employment or other contractual relationship with the company rather than an agency.

The nature of permanent roles is self-explanatory, but the difference between contract and temporary positions can be ambiguous. A fixed term contract comes with a termination date. The contract may contain a provision that a notice can be given to terminate the employment earlier than the original termination date, but if no such provision is included then a fixed-term contract will automatically expire at the end of its term.

On the other hand, the purpose behind hiring employees on a temporary basis is to cover short term gaps in staffing. Temporary workers have the flexibility to take up and leave temporary work at short notice and the same flexibility is enjoyed by the hiring company to finish the temporary assignment at short notice. Also, in contrast to the fixed term employees, temps or agency workers have a contract of employment with the agency who finds them work which means that their wages are paid by the agency rather than directly by the employer.

Benefits of Fixed Term Contract

Fixed term employment can have a number of benefits to both employers and employees.

Benefits of Fixed Term Contract as an employer:

  • Your company will benefit from a candidate with specialist and expert knowledge for a particular project/period of time.
  • Fixed-term contracts can be a great way to increase labour when it is required and putting employees on a probationary period to evaluate their work before offering them a permanent contract within the organisation.
  • Secondments and maternity/paternity leave can be covered effectively and efficiently.
  • Effective forecasting of resources and budgets.
  • Higher commitment levels from candidates.
  • The candidate can be offered permanent employment at any time during their Fixed Term Contract.

Benefits of Fixed Term Contract as an employee:

  • As an employee hired on a fixed term basis, you have the same rights as a permanent employee and therefore are entitled to; the same pay and working conditions, an equivalent or similar benefits package, protection against redundancy or dismissal and to be informed of permanent roles within the company (objective justification applies).
  • In some cases, a fixed-term employee may be paid more than permanent staff, either because of their special skills, or to compensate for the temporary nature of the job.
  • If you have worked for one month or longer, you are entitled to receive a weeks’ notice period from the employer.
  • Your contract may be extended or you may be made permanent depending on the companies requirements and your performance.

If you or your company require interim staff cover on a fixed term basis to cover a new project, long term sickness or maternity leave, please get in touch with us here.

Alternatively, if you yourself are looking for a contract or temporary role, please do not hesitate to contact us or get started by browsing our latest contract and temporary jobs.

Let’s Talk! Our friendly and dedicated consultants will take the time to understand your requirements and communicate with you throughout the entire recruitment process.


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