Afixed-term contract is a contractual relationship between an employee and an employer that lasts for a specified period that is determined in advance. These contracts are usually regulated by countries' labor laws, to ensure that employers still fulfill basic labour rights regardless of a contract's form, particularly unjust dismissal. Generally, fixed-term contracts will automatically be deemed to have created a permanent contract, subject to the employer's right to terminate employment on reasonable notice for a good reason. In the European Union the incidence of fixed-term contracts ranges from 6% in the UK to 23% in Spain, with Germany, Italy and France between 13% and 16%.[1]
Due to the potential job insecurity that multiple fixed-term contracts may cause, employment laws in many countries limit the circumstances and the way these contracts may be used. In countries where labour law is more restrictive (compensation/indemnity for dismissal), the differentiation between fixed-term and permanent contracts tends to be clearly set out in law. Where employment legislation is less protective for the employee there tends to be a lesser degree of differentiation between fixed and permanent contracts.
There are two possibilities to contract successive fixed-term contracts:
The maximum term is twenty four months and may be extended once only.[3]
Fixed-term contracts may not be extended more than three times with a maximum total period of two years.[4]
India allows fixed term employment since 2015. Fixed-term employees are entitled to wage and benefits on par with permanent employees.[5]
In Luxembourg, the standard maximum length of a contrat de travail à durée déterminée (CDD) is twenty-four months, with up to two renewals allowed. Researchers and students can employed for a maximum of sixty months on a CDD, with no restriction as to the number of renewals allowed. A waiting period of a minimum of one-third of the length of the contract is required for a CDD to be considered a new contract (and not a renewal) and to restart the maximum allowed duration of employment.[6]
Although both indefinite and fixed-term contracts exist in the country, foreign workers in Saudi Arabia must have a fixed-term contract; if the contract does not specify an end date, then the term automatically ends when the employee's work permit expires.[7]
Any employee on a fixed-term contract for four or more years will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so.[8]
