Employment Contracts: Advantages and Disadvantages for Employees and Employers

This article discusses the different types of employment contracts and compares the advantages and disadvantages for both employees and employers. It also provides examples of how organizations use different contractual methods.

Managing human resources

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Compare & contrast various employment contracts & the relative advantages & disadvantage
for both employees and employers.........................................................................................3
Examples of practices from organisation showing how & why they use various contractual
methods...................................................................................................................................7
CONCLUSION....................................................................................................................10
REFERENCE.................................................................................................................................11

INTRODUCTION
Staffing is a procedure that is related to iring of eligible Candidates in a organisation
according to specified positions and job roles. In management staffing is a element that is in
concern with the process of recruitment of employees with the timely evaluation of skills,
knowledge and competence according to the available job positions and job roles. The present
report is based on the discussion of various employment contracts that are part of staffing and the
way there can be hiring if right individual for right job roles (Golding, 2020). Employees have to
be hired in every organisation according to their level of skills, knowledge, aptitude and
specialisation. Every employment contract consist of pros and cons of employee and employer
according to a specific contract that is build up between a employee and employer,. According to
which there are some examples that have been drawn in order to hire employees according to the
job roles and vacancies in the organisation.
MAIN BODY
Compare & contrast various employment contracts & the relative advantages & disadvantage for
both employees and employers
Employment contact is the agreement that is present between a employer and the employees and
is nor limited to the expectation or the amount of compensation. It is a type of agreement that is
part of various employment contracts that are to be executed according to defined time period.
There is always a contract that is present between a employer & employee. Such type of contract
is offering the required obligations and rights that arise because of presence of formal
relationships among them in a organisation (Grozdanovski, 2020). These type of agreements are
part of employment contract that are to be executed according to the specific time period.
The type of contract that is present between a employer and employee is determining the specific
rights and obligations. All such right and obligations are part of the “contractual terms”.
Further all the provisions have to be according to the prevailing employment laws in a country.
Such as national minimum wages act 1948 is one such act where the provision related to
minimum wages have to be according to the legal laws that are mentioned in such act.

Permanent full-time contracts.
Full time contracts are the ones that are according to the employees that are holding permanent
position in a organisation. In such the contracts the employees are excepted to revive all the
benefits that are clearly mentioned as a part of contract it consist of provision related to paid
holidays. Benefits of pension (Rasmussen, Bray and Stewart, 2019). Contribution towards
provident fund and the statutory pay leaves. All the benefit of employees and provision of
employee leaves are varying according to each company and deepened on the management of a
organisation.
Advantages for employee: Employees may get benefit as permanent staff members. In this
employees are entitled to provide a one month proper motive before leaving the organisation.
But the positive aspect is that employees are getting full range of benefits in this contract that is
all the provision regarding working hours, responsibilities, roles, employment rights, payment
terms have to be clearly mentioned and further employee tenure has also to be clearly specified.
Disadvantage for employee: Employees are bounded by the contract as they have to agree to all
the contractual terms even if they are not willing, employers can pressurize employee if they are
not able to adhere to any such provision that is mentioned in their contract (Poesen, 2020).
Advantages for employer: Employers are bounded to be in the ingratiation for at least a time
period of 12 months that will lead to lower employee turnover in the organisation. The written
statement will consist of the aspects of employment contracts, minimum holidays and all the
statuary deductions.
Disadvantage for employer: Employers are required to provide all the benefits that may
sometimes lead to enhancement in the cost in organisations. It includes the annual laves,
minimum number of paid leaves, disability benefits and family coverage benefits that are to be
provided in case of accidental deaths. All such extra benefits any lead to higher cost in the
organisation as employer cannot deny such benefits.
Permanent Part time contracts:
The major difference between full time and part time contract is that the employment consist of
few hprs of working that is based on the number of hours mentioned in the employment contract
that is build up at the time of joining of employee. Similar to the full time employees the
position offer to the employees is permanent but the number of working hours is less and the
benefits & perks are offered to employees according to the number of hours which they are

contributing. Such contracts are beneficial for employees in case they are having other
commitments.
Advantages for employee: In such contract employees are entitle to same rights such as proper
holiday allowance and sick leaves. The employment type is highly flexible and it leads to high
interest of employee as they are getting benefits equivalent to a permanent employee (Lo Presti,
Amelia and Briscoe, 2019).
Disadvantage for employee: Employees have to compulsory work for required number of hours
that is generally a time period of 35 hours each week. Employees may be working for very less
number of hours but then also they have to follow all the regulations as a permanent employee.
Advantages for employer:Employers in such a case is not bound to provide all the benefit that
are offered to a permanent employee. There is presence of a pro rata situation in this case of
employment. There is higher cost effectiveness in such a situation as employers can save cost by
providing only the benefits
Disadvantage for employer: when employee is offered flexible working hours then it may lead
to difficulty in managing the overall working ours and changes have to be done in the working
pattern in the organisation. In case of part time employees may not be willing to make
contribution according to the required level of competence and it can lead to difficulty in
managing various functions and establishment of coordination among the full time and part time
employees in the organisation.
‘Zero-hours’ casual contracts.
The main notion behind the zero hours contract is that employers have to ask employees when
they can work. In this there is no obligation of employee that they will be contributing certain
specific minimum number of working hours instead they are free enough to decide their working
hours, zero hour contract is when employees may be receiving similar type of benefits juts like a
permanent employee in the organisation. There is presence of a casual working arrangement
between employer and employee bit the specific working hours are not guaranteed as the
contract is “casual working contract”.
Advantages for employee: In this employees are free enough to look for some other
opportunities and this is the reason they are known as zero working hours contracts. Employees
are also not bound to work according to employee specific requirements.

Disadvantage for employee: in this type of working contracts there is no job security that is
present and employers are also not entitled to offer the required minimum amount of benefits.
There can be a situation of high uncertainty in such contracts. Some times the minimum wages
that are offered to employees may be so low that they are not having any type of motivation to
contribute towards their job roles in a effective manner (Kot, Spanagel and Belozerova, 2020).
Advantages for employer: Employers can easily approach competent individuals because of
high amount of flexibility that they are offering to employees who are part of such working
arrangements. If in case employees are not working some day or they are not willing to do the
required allotted work then employers are free to nit to pay to employees as they can decided the
pay rates and compensation according to the contribution made by each employee.
Disadvantage for employer: In such type of contracts employers are under not any type of
obligation to force or to expect that they will be working for some specified minimum number of
working hours. So there is no such burden that can be put by employers that can lead towards
getting their work done according to organisational requirements but they have to necessarily
pay according to the provision of national minimum wages act that are governing the wage
policies of their organisation.
Fixed-term’ temporary contracts:
In this type of contracts, employees are work on the basis of fixed time within an
organisation. The fixed term contract consist of the start date and ending date of the specific
project performed by an individual. In addition to this, workers are said to be fixed time contract
that is a trainee, project members, agency contract and so on. For instance, in some organisation
if they have peak season then they hired some extra employees so that they can fulfil demand in
a proper manner. For this, they hire fixed time temporary employees and pay them as they give
to the present staff members.
Advantages for employers: It is determine that such fixed term temporary contracts help
company to meet the demand of market and make full utilisation of resources within a set
budget. It is analysed that due to economic uncertainties there are some of the changes within the
contract length. It is important for an organisation to make fixed term contracts without
commitments and rigidity of temporary employees as it help in raising performance and
profitability of company.

Disadvantages for employers: It is determine that it is difficult for employers to find temporary
employees who can fulfil the criteria and agree with the terms as well as conditions of company.
In addition to this, it is determined that fixed term contracts can dissuade person for applying for
temporary position in comparison with permanent jobs. Moreover, fixed term temporary
contracts are providing less job security that decline the motivation of individuals to work and
implement activities as well.
Advantages for employee: It is determined that in fixed term contracts, employees get high
salary as compare to permanent staff members. In some of the organisation, temporary
employees are being provided with training that help them to gain both personal as well as
professional development. Herein, employees posses an organisation to be treated well and
favourable in comparison to the permanent staff members. In addition to this, it is analysed that
less favourable treatment involves inability to review benefits of employee which are given to
permanent staff members excluding free membership and bonus. Moreover, it help permanent
employees to gain knowledge and experience which in turn help in getting best opportunity in
coming future.
Disadvantages for employee: In the present business scenario, there are different sectors that is
facing issue and providing less job opportunity as they are not able to recruit more number of
people. People who are working within this form of contract does not gain long term job security
which sometimes stop their growth and development as well. In addition to this, it is determined
that such temporary jobs is not mentioned in the CV and did not be countable of temporary
employees which enables them to get effective opportunity in future. All this impact negatively
on the mind set of people due to which their thinking and working capability is declined.
Examples of practices from organisation showing how & why they use various contractual
methods.
Employment contract is consider as an important document for both the employees and
company as well. It is basically a norm and procedure which is signed by employee in order to
be fixed in a company. It consist of duties, employment conditions, rights, duties which develop
a legal relation among employer and a employee. With reference to ASDA, it make fixed and
permanent contracts for its employees. The fixed term contract is applicable for those individuals
who is regular in office and perform activities legally. Herein, companies assign responsibilities
and provide them training and development session so that they can gain better opportunity in

coming future an gain higher growth as well as success. In addition to this, fixed term employees
signed contract that ensure job security, health and safety security, income security and so on. In
the year 2017, ASDA came up with the concept of hourly based employees or temporary
employees as a new strategy so that they can fulfil the demand of market in peak season. For
this, ASDA pay up to euro 9 for an hour along with the breakfast of temporary employees. It is
also same as flexible working arrangement wherein employees work according to their
convenience and time. At the time of placing employees for flexible projects, the company offer
services such as free breakfast, 2 holidays and many more. It is stated that projection of such
contract provide standardised service in the whole retail industry in United Kingdom. With the
help of this, the respective organisation is able to enhance its productivity as well as profitability
level in an appropriate manner.
Why organisation use contractual approach
Contracting is considered as the best technique in terms of improving the overall
performance of company as it take various forms and cannot limit for the bare purchase of
service. For this, company tends to opt several contracts considering the formalise significant
types of relations among employee and employers. It is also essential to have strong contract in
terms of protecting significant legal interest and tends to set clear standards among the company
and employer. It also tends to offer better management of commercial relationship and protect
the intellectual property and asset values (Sousa, Cardoso and Colaço, 2019). It is beneficial for
the company in terms of retaining their employees and also eliminate the turnover rate. For this,
the common benefit of permanent contract is that company offer healthcare services to its
employers in terms of feeling quite secure at the time of working in company. Moreover,
effective job security and stability is essential to guaranteed income for their employees at the
time of signing the permanent contract. For this, fixed term employees are not treated less
instead of their permanent colleagues. For this, employees consider fixed term contractor for the
same terms and conditions for employees including bonus, schemes, training pension and many
more. At the time of signing permanent contract, it tends to offer career development to
employees which is useful in terms of retaining employees.
For instance, in various companies considering TESCO employment contracts in which
particular legislations need to be maintained which is related to their employees. For this, basic
pay is defined as per the national minimum wages. TESCO is not entitled to pay of their

employees considering the working overtime from the normal working hours. Besides this, there
are several provisions that are related to the employee insurance benefits considering the
effective discussion of principles of working hours to overcome from the voluntary. Employees
are entitled to resale remaining breaks, potable water at the organisation and access to rest room.
TESCO also tends to make sure that employees tends to work for at least 20 hours every week as
their job security depends on the significant terms and conditions that are mentioned in notice
period.
Beside this, employment contract within TESCO involves detail about how staff
members provided with training that improve their personal as well as professional skills. In
addition to this, union rights and workers are provided with policies as well as principles which
are mentioned in the employment contract. It is stated that all these terms of contract adopted by
TESCO ensures that an appropriate legal compliance is is proposed among the employers and
employees as well. Moreover, it assist in clarifying information & avoids level of conflicts which
is arise in coming future. The reasons of using various contractual approaches within TESCO is
discussed below:
Business functioning: It is analysed that efficient system of contract management assist human
resource department of TESCO in smoothly functioning out activities and meet with the business
expectations.
Enforces compliance: Contract engagement among employers as well as employees within the
TESCO assist in dictating terms and conditions of all the policies that is in compliance with
employees and employers.
Dispute management: Conflicts are very common in a company which occur at any point of
time at workplace. It is analysed that when there is before hand preparation of contracts then it
assist in distributing roles as well as responsibilities properly (Ouedraogo and Koffi, 2018).
Above mentioned are few reasons which leads to proper management of overall contractual
relationship taking place among an employer and employee.

CONCLUSION
From the above discussed scenario it is concluded that there are different types of
contracts that are part of every organisation depending on the requirement of a job position and
the nature of employment. This is depend in some factors such as nature of job, employee
working situations, skill level of employees and the type of organisation, in case of each type of
contract it has specified benefits and demerits associated with it for both employers and
employees.
In every company, the nature & types of contracts are different and is changing with the
situations. In addition to this, there is high risk of uncertainty in providing flexible working hour
shift to staff members. There are minimum aspects of a employment contract that is job security,
minimum wages and many more.

REFERENCE
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