Some employment relationships are short term or temporary by necessity, such as when an employee is hired to complete a discrete project or fill a maternity leave position. In these situations, the parties will often sign a contract that sets out how long the employment will last and when exactly it will end. We call such agreements fixed-term contracts.
One benefit to employers of a fixed-term contract is that when the employment ends on the date specified (subject to the cautions set out below), the employee is not entitled to reasonable notice or severance. However, there are also potential risks to using fixed-term employment contracts in your business.