How Many Types of Employment Contracts Are There?
When starting a new job, many people tend to focus on salary or benefits. However, one crucial element that should not be overlooked is the “employment contract”, as it clearly defines the rights, obligations, and various terms and conditions between the employer and the employee.
How Many Types of Employment Contracts Are There, and Why Does Each Type Matter?
1.Indefinite-Term Employment Contract (Indefinite Contract)
Type: Commonly used for full-time employees
- Characteristics: No specified end date. Employment continues indefinitely until the employee resigns or the employer terminates the contract
- Termination: If the employer terminates the employee without cause, they must provide advance notice and pay severance compensation in accordance with the law
- Key Advantage: Offers high job security and employees are entitled to full benefits under company policies
2.Fixed-Term Employment Contract
Type: A contract that clearly specifies both a start date and an end date
- Characteristics: Commonly used for project-based work, temporary assignments, or seasonal operations with a definite timeframe
- Key Legal Conditions: Under labor law, this type of contract is permitted for three main categories of work:
- Specific projects that are not part of the employer’s regular business
- Temporary or occasional work with a clear beginning and end
- Seasonal work
- Termination: The contract automatically ends on the specified date. The employer is not required to provide advance notice or severance pay, unless certain legal conditions are violated
3.Probationary Employment Contract
Type: A form of indefinite-term contract that includes a probation period for evaluation
- Characteristics: Typically lasts 90 to 119 days (since if employment reaches 120 days and the employee is terminated, the employer is required to pay severance under the law)
- Key Consideration: Even during the probation period, employees are still entitled to basic benefits and protections under labor law, just like regular employees
4.Part-time / Casual Employment Contract
Type: A contract with clearly specified start and end dates, such as 3 months, 6 months, or 1 year
- Characteristics: Employment is based on an hourly or daily rate, commonly used for service roles or jobs that do not require full-time staff on a continuous basis
- Key Consideration: Even for daily or part-time workers, employees are still protected under labor law, including entitlement to the minimum wage and overtime pay (OT)
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Onusa Jaemmuak
HR Support Specialist
“Aon” is an HR consultant who coordinates and support the Support team as well as helping in developing the EzyHR system to meet the customer needs and work more in line of the system usage. She is an easy going, spiritual person who loves traveling and follows food reviews. A foodie by heart.
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