A Fixed-term contract is a type of employment in which an employer hires an employee for a fixed term. The period of employment is defined at the start of the agreement, so when a specific date arrives, this contract ends automatically. You might wonder why an employer offers a fixed-term contract when he can permanently hire an employee. So, let's find out some reason behind this offer.

Why does an Employer offer a Fixed Term Contract?

Here are some reasons.

Temporary Replacement - Employer needs a replacement for his permanent employee who might be on leave or maternity leave. Therefore, they are looking for a person who can join the team and handle that particular employee's task.

Short-Term Project- Another reason for offering a fixed-term contract is that employers have a short-term project that will end after a few months. Therefore, he needs an experienced person who can work on this project.

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Probation - Some employers don't want to sign a permanent contract until they know all about an employee's capabilities and expertise. Therefore, they offer a fixed term to an employee, and it's like a probation and performance evaluation period for him. If he performs well, the company might offer a permanent contract during or after this contract.

Specialist Knowledge - Many employers need specialist services for a specific project, and they ask experts to sign a contract for a fixed term. They don't hire experts permanently, as they require them only for a temporary basis.

Fixed Term Employee Rights 

A job seeker always wants to know the meaning of a fixed-term contract in the UK.  It's time to learn about different aspects of this type of employment in the UK.

What about Salary?

An employee who signs a fixed-term contract is entitled to the same employee benefits and salary as a permanent employee. In some cases, when a company hires an outstanding expert, he might get paid more than a permanent one. This salary increase is solely based on the expertise and skill level of the experienced employee.

What About Employee Benefits?

If you are interested to know what kind of benefits you will get with a contract fixed term, you should know that your employer needs to provide the same pay and conditions to you as he offers to his permanent contract employee. He can't treat you less favorably than his permanent employee. He should provide news of permanent job vacancies like breaking this news to his other part-time and full-time employees. 

An employee should understand objective justification when he gets hired for a contract of fixed-term. For example, if you get hired for only three months, you will not be entitled to the same benefits available for a long-term employee.

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When an employee has been working with this contract for almost two years, he gets the same employment rights as a permanent employee, such as rights to not be dismissed (wrongly, unfairly, or with a discriminatory reason).

What about Contract Renewal or Ending?

The concept of a fixed-term contract is quite confusing, especially when it comes to its renewal and ending. However, you should know that your contract expires when a specific date reaches. The question is whether you will get a notice or not. If there is no notice provision in your agreement, your employer won't send you one week notice before the contract expiry date. However, many employees are entitled to this notice in general cases. 

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In case you provide service for two years, then after two years, you get full right not to be unfairly dismissed from your job.  If a company dismisses you, it must provide you with a written statement highlighting the dismissal's main reasons.

When an employer doesn't renew a contract after two years, and the reason for this non-renewal is redundancy, an employee automatically qualifies for a statutory redundancy payment- which an employee with a permanent contract also gets.

In case an employer ends a contract before the expiry date of the agreement, an employee has full right of the notice period, which is one week when you work continuously for one month.

What if you keep working while your end date of the contract has been passed? It's an implied agreement between you and your employer, who needs to notice that your end date for the contract has been changed.

When will a Fixed Term Contract become a Permanent One?

If you are working on a fixed-term contract for more than four years, you automatically become a permanent-contract employee unless your employer comes up with a good reason not to make this change.

What if You want to End your Fixed Term Contract Early?

Sometimes, you find a great opportunity while working on a fixed-term contract, so you decide not to proceed with your employment anymore. if that's what you are going through, you should give one week notice to your employee
 

Advantages and Disadvantages of Fixed Term Contract

 It's advisable to look at both negative and positive aspects of this contract to get a 360 view of this contract so that you would know whether it's the right choice for you or not.

Advantages of fixed-term contracts?

Let’s explore the good side of this contract.

Look Good on a CV - If you are looking for a permanent position, but you don't find one, then certainly it's better to join a fixed-term job as you can show your work experience on your CV. 

Fair Pay - You will get paid precisely like a permanent employee. In some cases, when you have special knowledge and experience, you can expect a better salary.

Interesting Projects -  This kind of contract brings many valuable and exciting projects that you can't find otherwise.

Less Stressful Job- A permanent employee always has pressure to do better so he can get a promotion; however, you won't have to face this much pressure from your fixed-term. Thereby, you enjoy and focus more on the project.

No Commitment - Some people don't like to stick with a company for an extended period, so if you are that person, this job certainly works for you.

Disadvantages of Fixed-Term Contract

Here are some points which make a job-seeker decline a job offer with this agreement.

Less-Secure Job -  It's a contract that comes with an expiry date, and therefore, it's not a very secure job option. You enjoy financial stability for only a specific period.

Recruiter's Perspective - When a recruiter will look at your profile and see that you stayed on a job for the short-term, you might search for the same employment type in the UK. In that case, you should mention in your cover letter that you did a short-term job to gain experience, and now you are on the hunt for permanent employment.

It would be best to understand that not every hiring manager will look at your contract with a positive mind-set. He might think that you are a person who can't commit to a job for a long-time.

No Career Development - You can't get promoted with this contract, even when working for four years. In case you want to progress and move up on your career ladder, then don't sign up for it.
 

Fixed-Term Contract Vs. Permanent Contract

Now it's time to make some difference between permanent contract and fixed-term contract.

• End Date - There is no expiry and end date of a permanent contract. However, when an employer hires you for a fixed term, he defines a specific date as an expiry or end data of contractual agreement between you and your employer.
• Benefits - A permanent employee enjoys all employment benefits. In contrast, a fixed-term contract employee is entitled to equal employment benefits, but some benefits are exclusive for a long-term permanent job employee.
• Security - A permanent contract offers more job security. Therefore it's regarded as the best job opportunity in the UK as it provides financial stability more than other kinds of deals. 
• Promotion - You don't enjoy promotion with a fixed-term contract; however, permanent employees always get promoted to higher positions based on their performance level.
• Career Prospects - When it comes to fixed-term contract vs. permanent contract, career prospects vary from one employment to another. A person with a permanent agreement can enjoy more career prospects than a fixed-term contract employee because the former shows more work commitment and dedication than the latter; recruiters are interested in hiring employees who can stay in a company for the long term.

Conclusion

Finally, you have got a detailed answer to the question What is a Fixed Term Contract. If you are wondering whether to go for this job offer or not, then you should check the pros and cons of this employment type. Try to consider both plus and negative aspects of this job, and this evaluation will help you make the best career decision. Besides, read the fixed-term contract vs.permanent contract, so you know the difference between job offers and what would work best for you.