In the world of employment, there are two main types of contracts: permanent and fixed term. While they both offer employment opportunities, the major difference between the two lies in their duration. Here’s all you need to know about the difference between permanent and fixed term contracts.
Permanent Contracts
A permanent contract is an ongoing employment arrangement between an employer and employee. It means that once a contract is signed, the employee is employed indefinitely. Permanent contracts offer job security, as the employee cannot be dismissed from their job unless there are legitimate reasons.
Permanent contracts come with a range of additional benefits, such as paid leave, training opportunities, and health and retirement benefits. Employees on permanent contracts also have more flexibility to choose projects and work hours that suit them.
Fixed Term Contracts
Fixed term contracts, on the other hand, are a temporary employment agreement that lasts for a specific period of time. The length of the contract is determined by the employer and is usually linked to a particular project or time frame.
Employees on fixed term contracts are often hired for a specific job, such as a short-term project or seasonal work. The contract usually specifies a start and end date, and the employee’s employment will automatically terminate once the contract expires.
While fixed term contracts offer less job security than permanent contracts, they can offer other benefits such as higher pay rates and better work-life balance. Additionally, fixed term contracts can provide valuable work experience, which can help employees gain new skills and improve their career prospects.
Key differences
The key difference between permanent and fixed term contracts is their duration. A permanent contract is an ongoing employment arrangement, while a fixed-term contract lasts only for a specified period of time.
Permanent contracts provide job security, whereas fixed-term contracts offer more flexibility and better pay rates.
The Bottom Line
Both permanent and fixed term contracts have their pros and cons but ultimately, the type of contract you choose will depend on your personal circumstances and needs. Permanent contracts offer job security, while fixed-term contracts offer greater flexibility and often higher pay rates. It’s important to weigh up all the options carefully before choosing the right type of contract for you.