Types of Employment Contracts and Their Advantages and Disadvantages

This article discusses the different types of employment contracts, such as permanent full-time, permanent part-time, zero hours casual, and fixed-term temporary contracts. It analyzes the advantages and disadvantages of each contract for both employees and employers. The article also explores the practices of companies like Tesco and why they adopt specific contractual methods.

Coursework
Table of Contents
INTRODUCTION...........................................................................................................................4
Main Body.......................................................................................................................................5
Analyse different types of contracts of employment along with their advantages and
disadvantage for both employees and employers........................................................................5
Demonstrate the practices of firm, how and why they adopt various contractual methods with
specific example........................................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................14
INTRODUCTION

Human resources are crucial part of an organisation who put their efforts for the growth
and success for organisation (Balaraman, 2020). There are several strategies are used by
managers in order to manage human resources within company. In current report, there are two
companies are taken into consideration that are TESCO and Sainsbury. TESCO is a
multinational company based on UK. It provides a range of groceries and general items to
customers across the globe. Whereas Sainsbury is the second largest chain of supermarkets based
of UK. It owns several outlets in different countries to provide quality goods to consumers. The
report consider different contracts such as part time, full time, zero and more that are used by
managers in order to manage human resources within company. It demonstrates application of
these contracts in regards of above stated organisations. Moreover, it provides an overall
prospective about various employment contracts followed by managers in an efficient manner.
Main Body
Analyse different types of contracts of employment along with their advantages and
disadvantage for both employees and employers
Permanent full time contract:
It is a contract between employer and employees in which employees get payment
directly from employer. Here no predefined time on which employment will be end. It provides
several other benefits to human resources such as health and medical insurance and many more.
Most of the big companies use this kind of employment contract (Bombiak, 2019). Here prior
notice is given to employees before lay off and firing. In permanent contract no end of date for
which employment is done and it generally based on permanent position of employees within
organisation. In this, subordinates can work in company for the time period they wish to
associate with entity. Under this contract several other benefits like paid and sick leaves are
provided to human resources so that they stay with company for a longer period of time.
Advantages for employer-It is a contract in which a formal agreement is done between
both the parties employees and employer. Here, all the necessary information that need to be
follow by both parties are written in the contract and employment is governed by predefined
guidelines. It is also comprises some laws related to minimum payment, working conditions,
safety wand security of employees that is essential to perform better at work place. It is analysed

that it also helps to improve productivity and outcomes of subordinates. It provides security to
human resources as they get associated with company for a longer period of time and managers
can not fire them without any prior notice. Here, employees has the opportunity for future
development and growth as they associated with company for longer period of time. During
these years, they got exponential opportunities to explore in career and get success. In this case,
subordinates also become an essential part of entity as they remain associated with it for several
years that is helpful to do networking.
Disadvantages for employees:
Here, individuals get fewer opportunities to explore as they get associated with a
particular organisation for longer run due to contract they are not able to leave the job. They are
bound with legal aspects mentioned in job contract and can not leave the job before predefined
period of time. They have to follow all the necessary rules, regulations mentioned in agreement
whether they are willing or not. Employees do not have the option to deny to employers for work
as they are bound with predefined terms and conditions. Here, subordinates have limited
opportunities to grow and prosper which may create higher frustration and chaos at work place.
Advantage for employer:
Under this, employer can maintain lower retention level of employees within company by
rendering various additional benefits along with salary such as paid leaves, insurance and many
more. In addition, it also reduce down the additional expenses of recruitment and selection as
existing employees get associated with entity for longer period. In addition, with this,
organization can maintain higher brand image of entity at market place. It also helps to reduce
down unnecessary expenses over training and development of new employees. It is analysed that
permanent employees are tend to be more loyal and stay connect with entity for longer duration.
Disadvantage for employer:
From employers prospective they are not able to hire new and efficient talent for the
future growth and success of entity. It also generate higher expenses as they are bound to provide
some additional benefits to employees to retain them with entity for longer duration. This may
increase overall cost and expenses of company.
Permanent part time contract is an agreement between managers and employees in
which employees get associated with company for less time of period. This provides enormous

flexibilities to both employees as well as employees ((Muratbekova-Touron, 2018). Here, it is
suitable for students who are pursing their studies and wish to get earn money and get practical
exposure while studying. Under this, employees get salary on hourly basis rather on monthly
basis. Roles and responsibilities of work force are limited in this contract as they are not bound
with any kind of contract and free to leave the entity at any point of time. In part time,
individuals work for predefined period of time and get payment accordingly.
Advantages for employees-
It is beneficial for employees as it provide flexibility to them to work as per their
feasibility. In addition, this also provides an opportunity to individuals to earn extra amount
according to their convenience. Here, employees have option to schedule their work as per their
feasibility. Here, employees can gain experience and simultaneously also continue with their
passion and interest.
Disadvantages for employees-
Here is no security in part time contract as human resources can fire by them at any point
of time. While working on part time basis, they also need to follow some predefined guidelines,
terms and conditions of contract which may create great hassles in their personal and
professional life. In this, employees work with limited or no job security which may lead higher
frustration.
Advantage for employer:
It is used by managers to get employees on lower cost. In this, employers are not bound
to provide additional benefits to employees which may save cost and extra expenses. Here,
managers only need to pay workers on hourly basis for the work done by them (Sarode, 2017).
Higher authorities of company has an great opportunity to hire highly skilled and potential
candidates under their budget. In addition, it also helps to minimize the burden of other
employees who are working on full time basis that is essential to maintain positive and healthy
environment at work place which is essential to achieve long term growth and success of
company.
Disadvantages for employer:

It is also less secure from the perspective of managers as employees can leave the
company at any time. Here managers are not able to get loyal employees as they work for partt
time basis with organisation. Sometimes it may also increase the overall cost and expenses to
hire potential candidates. In this, employees work as per their convenience and flexibilities that
may create mismanagement within entity. Here, subordinates are not able to pay proper
attraction to work as they are already indulge with some other work with job. In addition, it is
also difficult to maintain better relationship between managers and subordinates as thy work for
a limited period of time. In addition, here organisation need to recruit new employees after a
particular period of time which may increase overall cost and minimize profit. Here, managers
need to arrange training and development programs for part time workers so that they get to
know with organisational policies, rules and regulations.
Zero hours casual contract
It refers casual working arrangement without guaranteed hours. It also have other term
bank contract, adhoc contract. zero hour casual contract have some basic features like not accept
the work offer,work for more than one employer,annual leave and living wages,minimum
number of hours. Through focusing on this contract makes it easy for for both parties to satisfy
their needs & wants at wider scale. These are suitable to those where uncertain situations are
bound to be occur & there is high presence of workload. It is responsibility of HR manager to
make assure that informations are being properly collected for person who is attached with
contract. Furthermore, it is also seen that when projects are to be completed with in a time period
these are considered as most suitable options freelancers are hired for a particular project
depending upon their skills & knowledge. Furthermore,there are several types of things which
are included in this contract such as
Job title & position, duties & responsibilities, working day & hours. Also, it involves
salary or wages, termination of employment, confidentiality & non-disclosure and general terms
as well as conditions (Balaraman, 2020).
Depending upon work, time & situations such type of contracts are being chosen by both
parties on agreed conditions.
Thus, it has been examined that this contract is beneficial & has drawbacks too which
are needed to be considered with proper considerations. It is responsibility of HR manager to
assure that when using this one level of understanding has to be maintained properly.

Advantages For employees:
Zero hours casual contract flexibility appoint more staff during some events, growth,
simplicity and affordability mean without work employer do not pay , not get additional rights
like maternity benefits and other benefits, productivity increase, choice to do work,inexperienced
workers get good knowledge about industry , help retired person to generate extra income.
Disadvantage for employees:
There are some disadvantage such as no control over the worker and more. These types
of agreement can be either virtually or physically depending upon requirements of both
employee & employers. It is necessary for both employer as well as subordinates to be aware
about these drawbacks & limitation of this contract so that it is easier for them to make decision
& reduce problem or issue in future period of time
Advantages for employers:
Zero hours contracts are beneficial for both employees & organisations as it helps them
in developing casual relationship between each other. These are mostly used by companies with
aim of getting work done in most effective by hiring casual working people for a fixed period of
time. It comprises of employment status, place of work, compensation etc. It too includes rules
& regulations of relationship such as non disclosure of information, rights of employer &
employee etc.
Disadvantage for employers:
There are several disadvantages of zero hours contract like it creats mismanagement at
work environment. It creates huge chaos at work environment
Fixed term temporary contracts
It refers to temporary contracts mean in which an organisation appoint an employee for a
fix time period and renewed after term expires . In this contract payment is fixed and not change
until the term expires. It depends upon both parties for which factor they are focuses on. When
entering into this one, time period is to be determined at priority level so that decision of work
are made accordingly. Moreover, market is wider & there are many type of individual who
search for this type of employment. Also, it is stated that correct market research is required so
that appropriate organisation is chosen for such contracts (Cvetkovski, 2017).
The Fixed Term Employee Regulations apply to certain fixed term contracts, designed to
prevent the less favourable treatment of fixed-term employees as compared to permanent

employees. Besides this, those Regulations have certain exclusions, including agency workers,
students doing work experience, or an apprenticeship contract. Whereas, a temporary contract is
to manage short term gaps in staffing (Ferraris, 2018). Normally issued on an open basis with a
set notice period. It should be noted that after a year an employee’s rights change and become
fundamentally the same as someone working on an established contract.
Advantages for employees:
In fixed term temporary contract experience count into job application. Fixed term
temporary work. This contract give only for temporary job. This type contracts signed for
specific time period and specific project. These type of contracts are being adopted on two
factors which are fixed or temporary.
Disadvantage for employees:
Here, sick pay less compare to permanent work,unsecure employment etc. In this,
employees are bond with company for uncertain period of time.
Advantages for employer:
These both are different as in fixed term work is given on regular interval for fixed
period. Whereas in temporary, work is assigned on temporary basis. With this rise of
competition in corporate sector many HR of firm are likely to be using these contracts in proper
manner.
Disadvantage for employer:
Individuals may not find any perks of short term over attraction of permanent option.
Manager will not be able to hires those people who wants flexibilities in working condition.
Fixed term contract offers less job security through which some of competent and talented
people will not get opportunity to work under reputed organization.
Demonstrate the practices of firm, how and why they adopt various contractual methods with
specific example.
Employment contract holds various kinds of information pertaining to rights, obligations,
employment conditions, ethics, duties and the working hours at workplace. It is important legal
agreements that decline down the ambiguity and builds effective relationship among employees
and employer. In relevance to Tesco company their managers adopt fixed firm and permanent
contract laws in which the permanent aids them for building healthy relationship with

employees and provides them necessary opportunity for the development of career. Additionally
it aids in rendering the roles and responsibility to employees for increasing engagements. On the
other hand the employees who works for regular hours they use fixed term contract for them. In
which they get fair ideas about the working conditions as well as receives job opportunity. As
per the new demonstrate the practices of firm, how and why they adopt various contractual
methods with specific example.
Employment contract holds various kinds of information pertaining to rights, obligations,
employment conditions, ethics, duties and the working hours at workplace. It is important legal
agreements that decline down the ambiguity and builds effective relationship among employees
and employ (Social, 2019). In relevance to Tesco company their managers adopt fixed firm and
permanent contract laws in which the permanent aids them for building healthy relationship with
employees and provides them necessary opportunity for the development of career. Additionally
it aids in rendering the roles and responsibility to employees for increasing engagements. On the
other hand the employees who works for regular hours they use fixed term contract for them. In
which they get fair ideas about the working conditions as well as receives job opportunity. As
per the new demonstrate the practices of firm, how and why they adopt various contractual
methods with specific example.
proposal they includes hourly paid human resources. In that they increases the wages and pay at
hourly basis. For they they recommand their staff to become flexible for getting higher pay. For
providing motivation they offers many benefits and breaks to them. It enhances the engagement
along with productivity. By which they will able to get more job applicants which aid them to
select best and suitable candidate for company. Hence all these contracts will assist company to
creates positive environment where all workers will get job satisfaction by receiving justified
amount for their performance.oposal they includes hourly paid human resources. In that they
increases the wages and pay at hourly basis. For they they recommand their staff to become
flexible for getting higher pay. For providing motivation they offers many benefits and breaks to
them. It enhances the engagement along with productivity. By which they will able to get more
job applicants which aid them to select best and suitable candidate for company. Hence all these
contracts will assist company to creates positive environment where all workers will get job
satisfaction by receiving justified amount for their performance.
Why company use contractual approach:

The term contract mean an agreement between two parties that abide them with law. In
relevance to this numerous number of contract has been generated by senior executives for
increasing productivity and profitability of firm. Company adopt many kinds of contracts foe
forming bond between executives and subordinates. This offers a fair prospective to workers
about laws, rules, pay, working conditions etc. additionally it reduces the conflicts and disputes
among employee and provides equal right to everyone. This help in maintaining the workplace
environment of human resource, trade relationships and values. Permanent contract provides
many benefits to both employee and employer. The most significant benefit is retirement.
During this entity will get huge amount of money that are secured for old age. It decrease the
expenses of training and development as it reduces the turnover ratio of company. Health
benefits is also given to employee in permanent contract. Stability, predefined income, employee
condition all are presented in this contract. Along with this the job security, healthcare,
retirement and guarantee income are the benefits of permanent contract. By this employee are
willing to adhere this practices and it decreases the additional cost, conflicts at workplace as well
as provides more suitable and qualified candidates for job.
For example: The Sainsbury company follow so many legislations towards employee for
maintaining positive workforce. They pay employee according to the national minimum ways
act. Pension scheme of Sainsbury company is not effective but they adapted provision refer to
insurance for the benefits of employee. This ensures a better and efficient working condition to
human resources. For this, the agreements related to rest rooms, breaks purify waters are provide
to employees. The stability in job is there according to condition and terms of contracts. This
comprises the methods of training and development that will be adopted by company for
increasing the potential and capabilities of employees. For reducing legal disputes that may be
arises in future, the manger of Sainsbury adopt all practices that aids them to accomplish the
objective related to conflicts. This provides clarity about employment conditions and minimizes
disputes along with confusion at workplace. The main motive of adopting the contractual
agreement are Business functioning. This comprises higher productivity from human resources.
For this it is vital to defines roles and obligation clearly along with working conditions. Contact
management help manger of Sainsbury company to motivate employee by job security and
stability (van der Togt, 2017). So they conducted many business operations in effective manner
for accomplishment of organisational goal. Dispute management, in a company there are chances

of arising of disputes and conflicts among employees. In which the contract mangers will aid HR
manger to clearly defines the laws and regulations by minimizing the ambiguity within company.
It supplies appropriate ideas to workforce related to roles and responsibility. As well as reporting
obligation at workplace. Therefore, it helps executives to combat with legal problems in effectual
manners. Enforce compliances, the effective contract manager aids Sainsbury company to
identify the term and conditions of employment in an organisation. It creates legal procedures,
compliances more clear in order to handle the conflicts and disputes among employee and
employer in effective manner within the firm. So all these are the reason of using contractual
approach within firm as company will able to accomplish its goal with in the given time
framework.
CONCLUSION
After a brief analysis of above report, it has been include that it is essential to manage
human resource so that organisational goals & objectives are accomplished. This report gives
brief information about managing of human resource in business sector. So, discussions has
been made about different types of contracts & comparison of different organisations on basis of

these discussed contracts. Therefore, it has been examined that it is necessary to have
appropriate knowledge about these contracts which are obtained by human resource within
enterprise. Entering to a contract requires proper information regarding process as well as
procedures. Thus, decisions making are needed to be undertaken when coming or using
contracts.

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