A fixed term contract is an employment contract that has a definite commencement date and an end date.
Specifying an end date makes it very clear that the employment will run for a definite period.
A fixed term employment ends on the date specified in the agreement. Other terms and conditions are agreed between you as the employee and the employer or employing organization. (Note: You may choose not to accept the appointment if you are not happy with the terms and conditions.)
The contract can also end on the non-occurrence of a specified event such as failure to achieve the stated financial target.
This is a strategy in recruitment.
It is intended to give effective control over your relationship with your employer.
The contract may contain a term that the employer can terminate the employment if you fail to perform, misbehave or commit a serious misconduct while at work.
Having a criminal conviction will also have the effect of terminating the contract. A jailed employee cannot perform his or her part of the contract. The employment ends due to frustration of the contract.
It may also contain a term stating that the employer can take action for misconducts outside working hours. It is usual to state that the misconduct must have a negative effect on the good image of the employer.
Appointment of Chief Executive Officers and Senior Executives
Chief executive officers are usually appointed on fixed-term contracts.
Other senior executives may also have appointment under similar arrangement.
However, some junior staff may also have fixed term contract of appointment. This is especially true where the work is seasonal. However, in such cases, it is preferable to hire temps.
A fixed-term contract may provide that it is renewable, that is, there is an option for renewal.
In such a case, you can apply for extension. There is no guarantee that your employer will extend your employment.
Sometimes organizations require that a new contract is to commence on a date not less than one day from the end date of the previous contract.
This is intended to let the first employment contract run its full term. The break may range from one day to three days to a week.
These organizations believe that by doing so, there is a break in the employment contract. Thus, the service will not acquire permanent status. So they think.
Some people including legal experts counter-argue that this clause does NOT break the contract at all. They argue that it does not matter whether the break is one day or one month. The employment acquires permanency if it is renewed.
But the argument is not over. This is one important issue that affects you if you are appointed on a fixed term contract.
Advantages and Disadvantages of Fixed-Term Contracts
One of the advantages is that you are free to go at any time or after the contract has run its course. And of course, being an employee, you are entitled to all the benefits normally enjoyable by permanent employees.
Your employer can also terminate your employment at any time by giving the required notice. But you have the safeguard in that the employer can only terminate your service for cause.
This is despite the existence of the clause that your employer can give notice of termination at any time.
Some legislation have a bearing on fixed term contract of employment.
These laws are intended to offer protection for workers. However, these may also specify that organizations are permitted to do certain things within the confine of the law.
Inquire from the HR Manager or an employment law expert if you have any doubt.
Get to know some of the misconceptions about fixed term contracts.