Fixed-Term vs Permanent Jobs: How Do Benefits and Job Security Stack Up for You?

Fixed-Term Employment vs. Permanent Job: Pros & Cons in Gratuity, Bonus, Other Statutory Benefits, and Other Considerations

In most organizations, employees are hired either on a fixed-term basis or for a permanent position. Each type of employment has its own set of advantages and disadvantages, particularly concerning benefits like gratuity, bonuses, and other statutory entitlements.

Fixed-term employment

Fixed-term employment offers flexibility for both the employer and the employee. It allows companies to hire staff for specific projects or seasonal work without a long-term commitment. However, fixed-term employees may not receive the same level of job security or benefits as permanent staff. Gratuity and bonuses may be prorated based on the duration of the contract, and certain statutory benefits could be limited.

Permanent jobs

On the other hand, permanent jobs provide stability and long-term career prospects. Permanent employees typically enjoy more comprehensive benefits, including full gratuity entitlements, annual bonuses, health insurance, and other perks. They also have stronger job security compared to fixed-term workers.

When choosing between fixed-term employment and a permanent job, individuals should consider their career goals, financial needs, and personal circumstances. It's essential to weigh the pros and cons of each type of employment arrangement to make an informed decision that aligns with one's priorities.

Tenure of Employment

In permanent employment, the employee can normally remain in service until reaching the age of superannuation as fixed in the contract of employment or the applicable service regulations. On the contrary, the tenure of employment is predetermined in a fixed-term contract, and the employee cannot remain in service beyond the fixed term unless it is mutually extended.

Notice of Termination

In the case of termination of employment upon the expiry of the fixed tenure, no notice of termination is required from either side in fixed-term contract employment.

Statutory Gratuity

In permanent employment, statutory gratuity is payable only upon the completion of the minimum qualifying service. In contrast, it is payable proportionately based on the years of continuous service actually rendered under the fixed-term contract, i.e., without the minimum qualifying service.

Promotion

In permanent employment, promotion or hierarchical career advancement is available, whereas it is not in fixed-term contract employment.