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Temporary Employment vs Fixed Term Contracts

Temporary Employment vs Fixed Term Contracts
25 Apr 2023

Temporary and fixed term contracts are often used by employers as a way of filling short term positions. However, it is important to understand the difference between the two. 

 

What is temporary employment?

Temporary employment is a type of employment in which employees are contracted to do a job for a limited period of time. Temporary employees are generally sourced by recruitment agencies and are on their payroll. 

Businesses will typically advertise temporary employment positions when they are experiencing periods of increased business.

 

What is a fixed term contract?

A fixed term contract is a short term employment contract that lasts for a specific period of time. 

Fixed term employment is ideal for seasonal work, maternity cover and project work if a specific skill is required. 

 

Is a fixed-term contract the same as temporary employment?

No, fixed term contracts are not the same as temporary employment. While fixed term contracts have a determined end date, temporary employment doesn’t usually have a specified end date.

Temporary employees can typically be found at a moment's notice and the contract can be ended equally as quickly, whereas fixed term contracts tend to be subject to at least a week's notice, so it does offer all parties involved a bit more security. 

 

How are fixed-term and temporary employees recruited?

With temporary employment, any candidates that are employed by the recruitment agency that you have sourced them through and are placed on their payroll.

The candidate is usually paid by the hour and will receive a salary weekly. They will complete a timesheet each week, confirming their work and break hours. At Four, we look after all this administrative work on behalf of you as the client for all temporary employees.

Candidates working on a fixed-term contract are employed and paid by your business. Fixed-term contracts are classed as employment contracts, in which candidates may receive typically permanent employee benefits. 

 

Rights of fixed-term and temporary employees

If you are working on a fixed-term contract, you will have all the same comprehensive rights as permanent employees. Your employer must not treat you less favourably than their permanent employees.

Employers must ensure fixed term contract employees get:

  • The same pay as permanent employees
  • The same benefits packages
  • Information about permanent positions within the organisation
  • Protection from redundancy or unfair dismissal

Temporary employees are also entitled to the same rights as permanent employees, including sick pay, holidays and any other benefits that the company has. 

 

How do extensions of temporary contracts work?

Employees on a temporary contract can have their contract extended by another 90 days if the employer can prove it is necessary. Many temporary employees also have the opportunity to become permanent team members if the employer believes it is in the best interest of the business.

 

Can you get an extension on a fixed term contract?

Yes, you can get an extension on a fixed term contract on the same terms as the original contract. If nothing is said about how long the contract will be extended for, it is implied that you are a permanent employee. 

If your fixed term contract surpasses four years at the company, this will also change your employment status from fixed term to permanent. 

 

Benefits of temporary contracts

There are many reasons why an individual may choose to take up temporary employment. Some of the main benefits include:

  • There is a huge amount of flexibility 
  • You learn new skills and gain experience
  • It can fill gaps in your CV
  • It’s a great way to get your foot in the door
  • You are protected with access to rights. 

 

Benefits of fixed-term contracts

Fixed term contracts do differ slightly from temporary contracts although they do offer similar contracts, including: 

  • It offers invaluable experience 
  • You can avoid long term commitment 
  • You may be kept on permanently if you wish
  • It gives you flexibility to focus on the roles you’re good at
  • You may earn more than if you were on a singular permanent contract
     

Is a fixed term contract or a temporary contract better?

Whether you choose to apply for a fixed term or temporary contract is completely up to your own personal circumstances, so there is no easy way to say which is better than the other. Both have their own advantages and disadvantages that you will have to weigh up before you decide which route to take. 

If you’re looking for short term employment, then a fixed term or temporary contract may be the perfect choice for you.

If you’re currently looking for fixed term or temporary work and would like to explore the options you have available to you, get in touch with us today to find out how we can help you.

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