Advantages and disadvantages of a fixed-term employment contract

Definition

Any labor relations are regulated by Article 58 of the Labor Code. A fixed-term employment contract is one of the types of agreements between an employee and an employer, which is concluded for a specific period of time.

The maximum term of the contract is no more than five years. Otherwise, it becomes indefinite.

The conditions and nature of work under a fixed-term contract are stipulated by Art. 58 and part 1 of Art. 59 Labor Code of the Russian Federation.

Features of a fixed-term contract

One of the most common types of employment contracts provided for by domestic legislation. The provisions of such a contract are regulated by the Labor Code of the Russian Federation. The main reason why a fixed-term contract is drawn up is the inability to establish a long-term, open-ended relationship between the employer and the employee. A temporary written agreement has its own subtleties of design and existence.

The basis for concluding such a contract is:

1. Temporary absence of an official performing assigned duties. If a permanent employee is on annual or maternity leave, on a business trip, or on sick leave, the employer has the right to hire another specialist and enter into a similar agreement with him.
2. Carrying out temporary, seasonal work.
3. The document can be signed if an employee is sent abroad. Outside the domestic territory, a specialist of a particular enterprise can continue to work or undergo an internship.
4. Alternative civil service.
5. In case of temporary increase in production volume.
6. When enrolling in a specific position in a temporarily formed organization.
7. To perform specific functions that do not fit into the format of the company’s main activities. This includes reconstruction of premises, installation or commissioning work.
8. Election to a position on a competitive basis.
9. When carrying out urgent work to prevent a disaster.
10. The employee of the company is a pensioner.

There are unconditional contracts and by agreement of the parties . The strength of a written agreement depends on the duration of its validity.

According to the law, an urgent written agreement can be concluded with an applicant for a certain position, a full-time student, as well as a representative of an individual enterprise. In this case, the company's staff should not exceed 35 people . Signing such an agreement is possible with a retired citizen, a theater employee or a person representing the media. Often one of the persons involved in an employment contract is the chief accountant or the head of the enterprise. Each of the parties participating in the preparation and signing of such a document undertakes to fulfill the specified requirements in good faith.

The employee must perform the necessary work while complying with internal regulations. The employer, in turn, creates decent working conditions and provides wages on time. The maximum duration of such a contract is 5 years . A person wishing to become a party to an employment contract must meet certain requirements.

Conditions of registration

Perhaps the most important condition for drawing up a fixed-term contract is determining the time frame and indicating the exact date of termination of the agreement.

But there are situations when it is impossible to determine the exact date. For example, an employee went on maternity leave and exactly when she will return is unknown. Here, the expiration date of the agreement will be associated with the day the employee returns from vacation.

If temporary work is related to the performance of a specific amount of work or for the period of operation of the organization, then the conclusion of the contract will be regulated by Part 1 of Art. 59 Labor Code of the Russian Federation.

Arbitrage practice

Let us present a case from judicial practice to show how controversial situations are resolved. Disagreements between the parties to labor relations were resolved by the Moscow City Court. Determination No. 4g/8-12759 is dated December 2013.

The crux of the matter. The specialist was assigned to a division of the company under a fixed-term contract. The term of cooperation expired and the person was fired. But the employee was not satisfied with this situation, so he sent a statement of claim to the court.

Conclusions made by the court:

1. It is possible to sign a contract limited to a certain period of time with the management personnel of the company.
2. There are no grounds for hiring heads of a structural unit for a temporary position.
3. Since the contract was concluded with violations, the dismissal is illegal.

Comments

This legal dispute shows that violations of the procedure established by law are interpreted in favor of the employee. Infringement of labor rights is not allowed. There is one important nuance. A manager can be hired for a limited period. But only when it comes to managing the company itself. Another issue is filling management positions in a structural unit. It is impossible to temporarily hire a branch manager, since such an organization is not an independent legal entity. However, such mistakes are often made in practice.

The second definition is given from the practice of the Irkutsk Regional Court. Case No. 33-4481/13 is dated June 2013.

The essence of the dispute. The person was hired temporarily. The duration of cooperation is limited to the duration of the government contract. The specialist was unhappy that he was fired. I sought justice through the courts.

Conclusions on the case:

1. There is no basis for signing a temporary contract. The employee's responsibilities do not go beyond the normal activities of the enterprise.
2. There is no evidence that additional services were actually required. The company's references to the expiration of the agreement have no legal significance.

Comments

The result of the consideration of the case turned out to be pleasant for the plaintiff, because the contract was recognized as unlimited. Indeed, Art. 59 of the Labor Code of the Russian Federation clearly defines the cases that constitute the basis for urgent work. In this situation we are talking about work that goes beyond the normal work of the enterprise. For example, a company receives an order and is forced to hire new specialists. When the work does not go beyond the scope of normal activities, it means that the person should be registered under an open-ended contract.

Deadlines

The maximum contract term is five years. But the minimum period is not established by law. Therefore, the contract can be concluded for at least one day. Although this raises the question: “Is it necessary to conclude a fixed-term contract?” Its advantages and disadvantages are clearly inferior in this case to a civil law agreement. Therefore, for a one-day interaction, it is better to sign a contract or paid services.

If none of the parties at the end of the employment agreement expressed a desire to terminate it, then it automatically becomes indefinite.

A fixed-term contract can be extended only in one case: if the employee, before the end of its term, presents a certificate of real pregnancy and writes a corresponding statement.

If a fixed-term contract is renegotiated many times to perform the same work, then it is advisable to sign an open-ended contract with the employee.

But in the case when the replaced employee returns to work, you can terminate the old contract with the conscript and enter into a new agreement. In this case, the term of the fixed-term contract may be different, as well as the job responsibilities.

Minimum and maximum period

The legislation provides that:

• minimum period – any, even 1 day;
• maximum – 5 years.

In practice, an employment contract is not concluded for several days, since this is, first of all, unprofitable for the employer: compensation will have to be paid for unused vacation days, even if it is just one such day. In addition, there is a risk that the employee will go on sick leave or it turns out that the employee is pregnant, etc.

Therefore, in the case of work that will take several days or weeks, you can draw up one of the types of civil contracts:

• paid provision of services;
• contract

Thus, from the employee’s point of view, there are virtually no disadvantages or features of a fixed-term contract, and its advantages are no different from a regular agreement. And from the employer’s point of view, the only significant risk is associated only with hiring pregnant employees, who, by law, cannot be denied the right to extend the contract even after the expiration of the initial period.

Video commentary on the legal features of the agreement:

Form. Basic documents

The agreement is drawn up in writing and sealed with the signatures of both parties, as well as the seal of the organization. The text of a fixed-term agreement consists of the same sections as a regular open-ended agreement. These include:

• subject of the agreement;
• validity;
• rights and obligations of both parties;
• compensation and guarantees;
• work schedule and the right to rest.

A fixed-term employment contract (a sample is presented below) must contain all the necessary clauses of a standard agreement so that controversial issues do not arise in the future.

To conclude a fixed-term contract, even for a minimum period, the applicant must submit a package of documents:

• Russian passport;
• work book form;
• SNILS;
• military ID (only for those liable for military service);
• diploma or certificate;
• other documents that the employer may request.

You don’t have to write an application to work under a fixed-term contract.

After the agreement is completed, an order for employment, form T-1, is signed. Within 3 days, the employee must read it and sign. If you wish, you can make a copy of the order certified by the HR department. The column where the terms of employment are stated must indicate the period until which the agreement is valid. And in the line “Base” the details of the employment agreement and the probationary period are indicated. The order must also contain information about the employee’s salary.

Sample contract 2021 - 2019

The document can be drawn up in any form. An essential requirement is to reflect all important conditions:

• names of the parties;
• subject of the agreement;
• term;
• place of work;
• the rights and obligations of each party;
• description of working conditions;
• salary size;
• description of types of social insurance;
• working hours.

You can use this example as a basis:

Payment

The salary amount is agreed upon in advance, and this information must be included in the fixed-term contract. The advantages and disadvantages of such an agreement can only be identified during work, and before that you just need to follow all the rules established by law.

The salary of a conscript cannot be less than that of other employees of the organization. Depending on what position the employee occupies, he is entitled to allowances, bonus payments and additional payments. But the total payment of remuneration for the performance of duties may be less than that of the replaced employee.

Sick leave, vacation pay and other compensation to fixed-term employees are paid on the same basis as to employees signed up under an open-ended agreement.

Summary

So, temporary work has its own characteristics. There are cases when you can accept a person for a set period of time. A fixed-term employment contract has pros and cons for the employee. The document concluded by the parties defines the basic conditions of the activity.

1. A fixed-term employment contract has its own characteristics. Social guarantees remain in any case. However, it is important to take signing documents seriously. An employee may file an application incorrectly and lose entitlement to benefits.
2. No one has abolished the right to judicial protection. If labor rights have been violated, you should go to court.
3. If possible, it is better to collect evidence in advance: recordings of conversations, email correspondence. As they say: words cannot be tied to deeds. You will need serious arguments to prove the correctness of your position.
4. When labor rights are violated, you can use alternative methods of protection: contact labor inspectors or the prosecutor's office.

Termination

Termination of a fixed-term contract is formalized using an order of form T-8. The employee must notify the employer three days in advance that the employment relationship is being terminated.

If the work was related to the fulfillment of specific obligations or seasonal work, then the contract is automatically terminated when all work is completed.

First, you need to notify the employee, and only after that sign an order to terminate the employment relationship.

If the employee is not notified in advance of the termination of the contract, he may go to court to challenge this fact.

Differences from unlimited

A fixed-term contract is drawn up if a permanent one cannot be concluded according to the nature of the planned work. Traditionally, an unlimited time contract is drawn up, and a limited one is a rare exception. The main difference between a fixed-term employment contract and an open-ended one can be traced already in the name - a fixed-term contract is limited by its validity period, while an open-ended one is not limited to it. But there are several more features :

Employers often use temporary contracts to their advantage, for example, so as not to look for reasons in the future to fire an employee. Such actions are prohibited and may lead to negative consequences.

Advantages and disadvantages

So, if you need to replace a temporarily unemployed employee or organize work in a company that was created for a certain period of time, a fixed-term contract will come to the rescue. Its advantages and disadvantages can be clearly seen from all of the above. Let us summarize the positive aspects of a fixed-term contract:

• the presence of, albeit temporary, fully secure employment. A fixed-term agreement includes all guarantees, payments and compensation, sick leave and vacations that are available to employees with an open-ended contract;
• the employer may not expand its staff (which subsequently threatens compensation payments if staff are reduced).

The main negative aspects include:

• inevitable expiration of the contract;
• If the contract is drawn up incorrectly, the employee’s opportunity to prove that he is right increases (which is inconvenient for the employer), that is, the fixed-term contract becomes indefinite.

Design nuances

If you are not offered a permanent job, you need to clarify why the employer is doing this.
The law prohibits the conclusion of temporary contracts for the purpose of evading the provision of social guarantees. Therefore, you can save email correspondence or record conversations. This evidence will help the specialist defend his rights. The evidence will be useful for appealing to labor inspectors and the court.

If, after the expiration of the contract, cooperation continues, the contract is considered unlimited. Therefore, if the employer does not remind about the dismissal, then the person is considered accepted for a permanent position.

Disadvantages of working under an employment contract

1. A white salary reduced by the amount of income tax is transferred to the worker’s account. Therefore, an unofficial worker has a chance to receive a larger amount of money.
2. The terms of the contract bind the parties to the labor relationship with reciprocal obligations. This means that the employee is required to comply with internal labor regulations and follow job or work instructions. In contrast, non-contractual relationships make it impossible to enter a reprimand or a record of dismissal in the work book at the initiative of the employer. In this case, there is also no financial liability for damage or loss caused to the enterprise.
3. If an employee wants to change his job, he will have to work for two weeks from the date of signing the resignation letter.
4. Deduction of alimony from wages if it is prescribed by a court decision.
5. It is not profitable to be the recipient of a white salary in a situation where unfulfilled financial obligations arise, for example, an unpaid bank loan. In this case, the credit institution can, through the court, recover money from the debtor by seizing the salary card.
6. Officially confirmed income, the level of which is above the subsistence level, excludes the owner from the category of low-income families. Whereas a citizen who has not been registered anywhere and has no income is considered low-income and can exercise the right to receive social benefits and subsidies. Low-income families are entitled to child benefits, utility and housing subsidies, provision of places in kindergartens without waiting lists and other government assistance. If employed illegally, a citizen remains unemployed, which gives him grounds for applying for unemployment benefits.