The defined-term contract or fixed contract is a contractual modality in Spain that is applied in the hiring of employees. That is, when a person begins to be employed by a company, there are multiple types of contractual relationships that can be applied, among all those that exist we can distinguish two, the fixed contract and the temporary contract.
Advantages and Disadvantages of the open-ended contract
On the one hand, temporary contracts serve to momentarily cover a need in production, a substitution or a work to be performed in the long term, so they are usually more unstable in time and guarantee less security to the worker. However, defined-term contracts are those contracts that are expected to last permanently as long as the business or company continues to operate. It should be noted that the main difference lies in that the indefinite-term contract implies a higher compensation for the worker in the event that it is the contracting party who terminates the contract.
Advantages of the open-ended contract
- It provides greater stability
- Great protection against dismissal.
- They are usually better remunerated than temporary contracts.
- Loyalty to the worker and increase their performance.
Disadvantages of permanent contracts
- Reduces flexibility to the employer in case of needing to reduce the workforce.
- It is a costly and costly option.
- It does not guarantee security of employment.