Fixed-term and open-ended contracts: an introduction
Before we discuss the benefits, differences and termination of the fixed-term employment contract and the open-ended employment contract, we will explain what these terms mean. A fixed-term employment contract is, as the name indicates, entered into for a fixed period of time. For example, one year. An employment contract for an indefinite period of time is entered into for an indefinite period of time. In other words: there is no end date attached to this contract. The employment contract for an indefinite period of time is therefore often referred to as a 'permanent contract'.
A fixed-term employment contract: the benefits
A fixed-term employment contract has several advantages. First of all, the fixed-term employment contract ends by operation of law. This means that many rules regarding the termination of a fixed-term employment contract do not apply. For example, the employer does not have to apply for a dismissal permit and does not have to take into account certain notice periods and notice prohibitions (unless premature termination is involved). The fixed-term employment contract expires automatically when the term specified in the employment contract has expired. However, the obligation to give notice must be taken into account. Moreover, a fixed-term employment contract can be used as a kind of trial contract. The trial period for indefinite contracts is a maximum of two months. Employers who do not find this period long enough usually choose to first enter into a fixed-term contract with the employee in question. This enables them to assess whether the employee is suitable for the longer term.