Understanding different types of employee contracts

Types of employment contracts in the UK

Full-time contracts

This is the most common type of employment contract currently in use by businesses in the UK. It’s generally offered to those seeking permanent positions, outlining the employee’s hourly wage or salary.  It also applies to individuals who are employed and self-employed simultaneously. Also detailed in the contract are pension benefits, holiday entitlements, information on SSP (Statutory Sick Pay), and parental leave allowances.

There is no minimum requirement for the number of hours you’ll have to work with a full-time contract. Although, most employers recognise a full-time workweek as thirty-five or more hours.

Part-time contracts

Part-time employees work fewer hours than full-time employees but can still hold permanent positions. Plus, these two different contracts share many similar parameters.

The number of hours part-time employees are contracted to work each week must be clearly outlined in the agreement. However, the option of working overtime may be included if the employee wants it to.

One benefit afforded to part-time employees is a more flexible schedule. It allows them to fit their work program around any other commitments they may have. It also allows them to explore other opportunities without dedicating vast amounts of time away from their job.

Fixed-term contracts

Fixed-term contracts are set to last for a particular period, which both parties agree on in advance. In some cases, they may not include a precise time frame but will conclude when a specific project is finished.

Employees working under this type of contract enjoy the same rights and benefits as with a permanent contract. However, something like holiday entitlement will be dependent on the contract’s length.

Furthermore, fixed-term contracts can sometimes result in long-term positions depending on the assigned role and performance.

Temporary contracts

Like with a fixed-term contract, this sort of contract is offered when the position is not expected to be permanent. It will have a given end date in most cases, which might be subject to change. As such, temporary employees have their contracts extended based on demand and availability.

Even with their short-term status, temporary employees are still entitled to the same rights as with other contracts. Some of the benefits of such contracts are managing your work around your studies or other interests, increased flexibility, and the opportunity to gain experience in a specific sector.

Agency contracts

Agency contracts are drafted, agreed upon, and managed by an employment agency or recruitment consultancy firm. They usually have a short lifespan, and the length of the contract will depend on demand and availability.

It is the agency’s responsibility to ensure that their employees have rights and that they are protected. However, the employer pays statutory Sick Pay and NI contributions to the agency. Plus, cases of an employer sharing information with other employees would fall into the employer’s remit of responsibility.

It’s also important to note that after 12 weeks of continuous work in the same role, agency workers can be afforded the same rights as permanent employees of the business.

Conclusion

Employment contracts are not only a legal and necessary requirement, but they are also highly beneficial to both the employee and employer. The employer and employee should agree upon the contract to ensure that both parties are satisfied with the terms.