What are Contract Workers

A worker who is temporarily employed for a limited period of time based on certain terms and conditions is called a contract employee. These employees may be employed directly by the employer or by private agencies. Agencies sometimes recruit, hire and train these temporary employees and hire them out to employers. These contract employees are also called a Fixed Term employee, which means that they are hired on certain fixed rates. This fixed term is agreed upon in advance.

The employment of such kind of employees ends or expires as per terms of the contract. Hence no notice is served to them. The agreement may also be for specific projects. Once the project ends the contract expires. Let us know see the legal implications of hiring a contract employee. The British employment does not differentiate between a contract employee and permanent employee. All that they look is if they have a continuous period of employment service.

Most temporary employees do have an insufficient employment service. But however some employment rights such as the right not to be discriminated against race, sex etc. have no minimum service requirement. Employees hired on contract basis have the same right to the rate to be paid as permanent employees. This means that they will also have the same rights to statutory redundancy payment and written reasons for dismissal.

Let us see the advantages of hiring contract employees:

  • These kinds of workers provide flexibility because the number of employees can vary as per demand.
  • Contract workers can provide cover to permanent employees who go on leave for maternity or sick leave.
  • These employees provide specific skills for specific projects.

There are also disadvantages of hiring such employees:

  • These kind of employees lack motivation and may not be committed.
  • When such kinds of employees are hired from agencies, there training methods may not be up to the mark.
  • Agency workers who receive higher pay may have to face the wrath of trade unions.

The success of contract employees depends on how the company uses them. The organization can make the following check list while hiring them.

  • Avoid hiring contract employees when the job is in real a permanent one.
  • Consider the cost of hiring a contract worker versus permanent employee.
  • Agree to proposals in hiring them with recognized trade union.
  • Compare different agencies when they are hired from them, their testing and screening methods.
  • Provide the contract employees or employment agency job description and other information like company benefits, rules and regulations.
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