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Things you need to know about Fixed-term Employment Contract.

1. What is an Employment Contract? 

An Employment Contract (the “Contract”) is a written agreement between the employer and employee stating the terms of the latter’s employment.  The Contract contains stipulations regarding the employee’s (a) salary; (b) benefits & allowances; (c) job title; and (d) job responsibilities.

The Contract may also contain stipulations intended to protect the employer during and after the employment relationship such as (a) confidentiality of the employer’s proprietary information and trade secrets; (b) non-solicitation of the employer’s clients and employees; and (c) the employer’s ownership of intellectual property rights over the employee’s work.  

With Legal Tree you can easily create an Employment Contract with all the essential terms of the employment relationship. You may also add stipulations to further protect the employer (i.e. non-competition, non-solicitation) as discussed above. 

2. What does it mean when the employee is fixed-term?

A fixed-term employee is hired for a specific duration only with the start and end dates of the employment already agreed upon even before the employment begins. Fixed-term employment is highly restricted and subject to the requirements that (a) it was knowingly and voluntarily agreed upon by the parties with no improper pressure used on the employee and no circumstances vitiating his consent; and (b) the parties dealt with each other on more or less equal terms.  

Fixed-term employment is different from regular employment which is permanent and for an indefinite period.

3. When do you need an Employment Contract?

An Employment Contract is used when you are hiring another person as your employee and you want to clearly outline the terms of employment.

4. How can an Employment Contract protect you?

An Employment Contract protects both the employer and employee because it puts in writing their respective rights and obligations.

For the employee the Contract clearly states the salary and any benefits he is entitled to.  At the same time the Contract describes his job title & responsibilities and informs him exactly what kind of work product is expected from him.

On the other hand, the Contract gives the employer flexibility to hire employees only as needed for a specific period without necessarily having to make them regular.  For example, the employee may need to hire an employee only to fill in a temporary vacancy caused by an employee on maternity leave. In this case, a fixed-term Employment Contract is useful because the employer can hire the employee only for the period during which his existing employee is on maternity leave.  Once the existing employee returns from maternity leave, the fixed-term Employment Contract is deemed terminated.

The Contract may also contain stipulations to further protect his interest.  These include stipulations granting the employer ownership of the intellectual property rights over the employee’s work product.  Other stipulations require the employee to keep confidential the employer’s proprietary information & trade secrets and prohibits the employee from having any conflict of interest with the employer’s business.

5. What information do you need to create the Employment Contract?

To create your Employment Contract you’ll need the following minimum information:

  1. The name, address and nationality of the employee
  2. The type of employer (i.e. individual or business) as well as name.
  3. The start and end dates of the employment period
  4. Basic terms of the employment namely: (a) salary & benefits; (b) job title & duties; (c) place of work; and (d) working hours.

Related Documents.

Activities that involve a Fixed-term Employment Contract sometimes use the following documents. You may be interested in them:

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