Different Contract Types

types of employment contracts

An individual’s employment status determines their rights as an employee and their employers’ responsibility towards them. The types of employment contracts given to new recruits should make clear their employment status. An employer can benefit from utilising the different types of employment contracts available to ensure the business needs are met in the most efficient way.

Types of employment contracts

The outline below is the types of employment contracts and the key variations in terms and conditions.

 

Contract Type Notice Period Terms and Conditions Notes
 

Full Time

 

  • Employee terminating employment is stated in contract, usually 4 weeks.
  •  When The Company is terminating an employee this is as per Statutory requirement – 1 weeks’ notice until 2 years continuous service and thereafter, a weeks’ notice for every years’ service, capped at 12 weeks. ( Max Winthrop,  XpertHR)
  • Holiday Entitlement accrues, for each complete month worked, up to a maximum of 29 days.  (Gov UK. 2016 ).
  •  Statutory Sick Pay provided employee meets the qualifying conditions.
  • Employees are protected by the Employment Rights Act 1996.
  • This can be set as per the needs of the business when deciding on notice required by employee to the company when terminating.

 

 

Temporary/ Fixed Term

 

  • Employee terminating employment is stated in contract, usually 4 weeks however this can be as per the needs of the business.
  •  When The Company is terminating an employee this is as per Statutory requirement – a weeks’ notice until 2 years continuous service and thereafter, a weeks’ notice for every years’ service, capped at 12 weeks. ( Max Winthrop,  XpertHR)

 

 

 

 

 

 

  •  Holiday Entitlement is pro rata that of full time employees.
  •  Section 1 of contract should outline “Your employment shall commence on XXXXX and subject to the remaining terms of this agreement, shall be for an initial fixed term of X months expiring on XXXXX”
  •  Statutory Sick Pay, provided employee meets the qualifying conditions.
  • Employees are covered by the Employment Rights Act 1996.
  • This can be set as per the needs of the business when deciding on notice required by employee to the company when terminating.
  •  Holiday Entitlement is accrued on the basis of 1/12th of the annual entitlement for each month’s service in the holiday year.
  • Any employee on fixed-term contracts for 4 or more years will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so. (Gov UK. 2016 ).
Zero Hours
  •  Employee terminating employment is stated in contract, usually 4 weeks however this can be as per the needs of the business.
  •  When The Company is terminating an employee this is as per Statutory requirement – a weeks’ notice until 2 years continuous service and thereafter, a weeks’ notice for every years’ service, capped at 12 weeks. ( Max Winthrop,  XpertHR)
  • In the majority of cases a zero hour’s contract means that the business recruits a ‘worker’ rather than an employee. However this relationship may change and develop the ‘workers’ status to employee in which case there would be an increase in employment rights.
  •  Although notice period can be outlined in contract due to the nature of ‘zero hours’ the employee or worker is not obligated to accept work and so the business may find it difficult to enforce zero hours workers or employees to work their notice period.
 

Contractor

 

  • Terminated by either party giving to the other not less than one weeks’ written notice.

 

 

  • Contractor accepts engagement to provide their Services to the Company for a period of 12 months from specified commencement date and thereafter until terminated by either party.
  • The Contractor has the status of a self-employed person and so is not entitled to Sick Pay or Holiday Pay.
  • This can be set as per the needs of the business when deciding on notice required by contractor to the company when terminating. (RRADAR advice line).
  • Best practice for The Company giving notice to the contractor would be equal to the number of weeks’ notice required by the contractor.
  •  Contractors have none of the rights an employment contract gives an employee.
  • The Contractor can give reasonable notice to the Company of any time during the period of Contract for service Agreement where they are unable to provide the Services, in writing to The Company.

If we can help you with this or any other HR issue, please do not hesitate to contact a member of our HR Team at HR Services Scotland Ltd on 0800 652 2610.

For more information about the services that we provide at HR Services Scotland, please get in touch with us here.

 

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