When employers are hiring candidates for a new position, they often have to decide whether the person will be hired for a short or fixed period of time. The person may be hired on a contract basis, for a new project, or to take care of a new task at hand. Whatever the terms of employment, they have to be clearly highlighted in the employment contract, based on the employee’s employment arrangement. Read on to find out about fixed-term employment contracts and maximum-term contracts.
In case of a fixed-term contract, the employment will continue to an agreed date. A start and end date of the term is fixed beforehand and is mentioned in the employment contract. Despite the length of the contract, the employer still has the right to terminate the contract on certain grounds, such as if the employee fails to perform as expected. This is perhaps the main characteristic of a fixed-term contract.
Both the employer and the employee have the right to terminate the contract as long as there is proper cause or grounds to do so. Both parties have to continue the employment arrangement for the entire term of the agreement, unless any of the grounds of termination are met.
Employees that are employed under contracts with fixed terms are typically excluded from the National Employment Standards entitlements. In case an employer wishes to terminate an employee or employees before the fixed date, they will have to do so in accordance with the early termination provisions. This will ensure that they do not breach the employment contract.
Although the name may sound different, a maximum-term contract is similar to a fixed-term employment contract. This contract also has an end-date when the employment will end. The only distinction between the two is that both parties in a maximum-term contract can terminate the agreement with proper notice, so the full employment term may not have to be endured by both parties.
Based on past experiences with the employer, if an employee has reason to believe that the employer may not extend the fixed-term contract, then that may initiate termination.
Permanent Employees Should Avoid Fixed Term Contracts
Many employees may attempt to employ fixed-term employees instead of permanent employees for positions that actually require a long term, permanent employee. They do this to save costs as fixed term employees do not have the same entitlements that permanent employees have. The employer will staff a series of consecutive fixed term contracts instead of signing one permanent contract. If this happens quite often, the Fair Work Commission may deem the relationship permanent instead of a temporary or short-term one.
Whatever the case, you must seek help and guidance from an experienced attorney or litigator to work out a realistic solution for any legal problems that may arise at the workplace. The attorney will help go over the commercial contract with you in order to make sure that your rights as an employee are not violated.
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