you're reading...

Career Advice

Examining the Different Types of Employment Contracts

There are two things that affect the responsibilities an employer has to an employee. The first factor is employment status of a particular employee. Workers and employees have different rights, and the employers have different responsibilities to them as well. The same can be said for contractors and office holders.

The second factor is the type of contract an employee is under. Even a full-time employee can be under contract and the employer will follow a different set of rules based on the type of contract that is in force. There are generally five types of employment contracts an employer can offer. We are going to review them in this article.

Full-Time and Part-Time Contracts

Whether a person is employed on a full-time or part-time basis, an employment contract is mandatory. The employer is basically providing a written statement of employment as required by law. As a part-time or full-time employee, you are entitled to a number of rights that must also be included in the contract.

For starters, you must receive a payslip with detailed information about deductions. The payslip must also show that the employer is paying you at least the minimum wage, along with benefits and other rewards.

A full-time or part-time contract also gives you the ability to take paid holiday of a certain amount. It grants you Statutory Sick Pay or SSP as well, plus you are entitled to maternity or paternity leave and pay. These too are required by law, so a well-written full-time and part-time contract always include details about these matters.

Fixed-Term Contracts

A fixed-term contract gives you, the employee, all of the rights of permanent employees and those under full-time contracts. According to business law experts at Harper James Solicitors, businesses and start-ups are starting to use fixed-term contracts to recruit employees for specific projects.

As the name suggests, the fixed-term contract will have a specific start and end dates – or a term of employment – that can be adjusted accordingly. This gives employers the ability to fine-tune the hiring of employees to minimise overhead costs during downtime. This type of employment contract is also flexible, since employers can choose to renew or end the fixed-term contract at the end of (or prior to) the end date of the contract.

It is not uncommon for companies to use temporary employees under a fixed-term contract to cover for key employees who are taking their maternity or paternity leave. What’s important is that you understand the employment contract you are getting into before accepting the job.

Agency Staff

Another increasingly popular way for businesses to recruit workers is through agencies. Hiring agency staff is seen as a more efficient way of acquiring skilled workers, since the employer now has more flexibility in terms of the employment status of the workers.

As the name suggests, you are actually under a contract with the agency rather than the employer directly. One of the most important things to understand about being under agency staff contract is that you are entitled to the same benefits and terms as permanent employees if you work for the same company continuously for more than 12 weeks.

Employment agencies operate as commercial entities, so you should also pay attention to the employment contract and status you have with the agency. If you don’t know your way around employment contracts, you can always consult with solicitors at any point.


Contractors are different than the previous types of employees under contract. When you work as a freelancer or a contractor for a client, you are seen by law as a separate entity. Even when you are freelancing as an individual professional, your status remains a self-employed service provider.

The only responsibility an employer has to its contractors is regarding taxation, but most freelancers today take care of paying taxes on their projects themselves rather than asking the client to do it. The same can be said for the National Insurance Contributions or NICs.

Despite the lack of employment-related responsibilities, contractors are still covered in terms of health and safety. It is the employers’ responsibility to provide a safe working environment and to cover expenses related to work injuries.

Zero-Hour Contracts

Last but certainly not least, we have the zero-hour contract. This is a rather unique type of employment contract, since it gives you – the employee – as well as the employer, freedom as far as work goes.

Zero-hour contracts are meant for on-call workers. The company doesn’t have to pay a monthly salary but rather calculate the employee’s wage based on the work that employee does at certain times. The employer doesn’t have to give you the work, and you also have the option to refuse work when offered.

Now that you know the different types of employment contract recognised by law, you can agree to the most suitable one the next time you are recruited by a business. The right type of contract and employment status help shape your entire employment.


No comments yet.

Post a Comment


Get every new post on this blog delivered to your Inbox.

Join other followers: