I've been on a rolling contract for a little over a year now out of school, and prior to that the work I did was in and out of internships.

I've heard that employee status is much more preferable than contract status, and I'd like to better understand why. I understand that employee status often comes with better benefits, like health-care, vacation, and salary, but one thing I'm especially curious about is if being an employee confers more job security than being on contract, and why?

  • Canada. And yea I figured so, wasn't sure whether I should make the question locale specific or not, and that the answer might be generalized. – Canadian Coder May 1 '16 at 18:00

In most countries, as a permanent employee you would have protection against unfair dismissal. Exactly what constitutes "unfair" will vary - but things like discrimination on race or religion would be examples. If you're on a rolling contract, the employer can just decide not to renew the contract without ever giving a reason.

In some countries, once you have been in employment for long enough, you will have rights if the employer wishes to make you redundant. These may include a statutory consultation process, and a minimum amount of redundancy pay.

  • I wonder to what extent that 'unfair dismissal' varies. For instance, if an employer decides I'm not meeting the needs of the company in my work then who draws that line? Couldn't an employer theoretically just say I'm not doing my job and let me go arbitrarily, if they wanted to? – Canadian Coder May 1 '16 at 22:58
  • 2
    @CanadianCoder in the case of the employer deciding you're not performing up to the required standard, many countries' unfair dismissal laws would require them to notify you of their concerns in a particular way (e.g. a written warning) and give you an opportunity to deal with their concerns, before they could legally fire you. – Carson63000 May 2 '16 at 0:31

employee confers more job security than being on contract

In theory the benefits are about job security, but in reality there is little difference. In practice if an employer wants to fire someone, they will, finding a reason is not the hard part. The legal minded people will probably disagree, but this is what I have seen.

I have seen people on rolling contracts for 30 years, and permanent employees who have lasted weeks.

  • 2
    Not quite true. In most of europe, for instance, firing someone without a really serious reason is possible but often prohibitively expensive. You can't just conjure a reason from thin air, either. – user308386 May 2 '16 at 13:14
  • 1
    Of course you can, don't be naive, it happens all the time. We're not talking about a CEO or executive, it's a basic worker. – Kilisi May 2 '16 at 13:19
  • 1
    And trying to do so is a great way to get sued and subsequently go bankrupt. I've seen this exact thing where they tried to conjure a firing reason and failed so bad they had to pay out a metric ton of severance, often double or triple the already high law-mandated minimum. – user308386 May 2 '16 at 13:22
  • 1
    then they failed, all that means is they didn't do it properly. – Kilisi May 2 '16 at 13:23
  • @Kilisi: Which is exactly Magisch's point. It is possible, but it is not easy. – sleske May 2 '16 at 14:26

In my experience, when a company wants to make sure they can keep a contractor, they'll offer a permanent position. There is a feeling there is less control or a better way of looking at it, better offers that can be made to employees that are contingent on staying with the company: promotions, bonuses, stock options, retirement plans, etc.

Too many companies don't treat contractors as a member of the team and create situations where contractors don't build relations with other employees. This can happen when you have a contractor paid by the billable hour. Some won't invite you to the office party or even give you a slice of cake. They don't mind it as much with salaried employees.

If you want to keep doing what you're doing, it shouldn't matter. However, if you want to move up into management, you may need to look for opportunities where you're a full-time employee.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .