Social benefits offered by temporary contracts : There are few differences in terms of labour law between permanent contracts and temporary contracts. Those that exist are due to the duration, a concept that inherently distinguishes between these two types of contract.
Two types of contract, the same law
Permanent contracts and temporary contracts both fall under the Labour Standards Act and have the same rights for employees, in particular in relation to the number of holidays, and health insurance and retirement conditions.
However, in reality, employees will not come under the same rule on some points, simply because the concept of term exists for temporary contracts.
Does prior notice exists for temporary contracts ?
Me Alain P. Lecours, of the law firm Lecours Hébert, believes it should be remembered that the employer of an employee who has a contract of indefinite duration can terminate the contract by dismissal for economic or technological reasons (case 1), dismissal for just and sufficient cause (case 2) or without cause (case 3). In this example, the employer must pay for a two-week prior notice for any employee who has worked more than a minimum of three months. Conversely, for temporary contracts that specify when the collaboration between the employee and the employer terminates the concept of dismissal does not need to be addressed. However, if for any reason the employer wishes to terminate his employee, the employee can ask to be compensated for the balance of the month to be worked or, more reasonably, for the months needed to find another job. To avoid this pitfall, more and more employers are including a clause specifying that the temporary clause can be terminated. This is especially true for long duration temporary contracts.
Vacations and seniority
As Me Alain P. Lecours reminds us, a temporary contract can be renewed and an employee can continue this type of contract within the same company without getting the benefits of seniority. Thus, after 2 temporary contracts renewals each lasting 2 years, his vacation counter will be reset to zero with each renewal and he will only get the benefit of the base rate, 4% of his salary, representing 2 weeks of vacation. This is while the vacation pay for his colleague, hired under a permanent contract, will rise to 6% of his salary after 5 years, or 4 weeks. A significant difference….
Another difference related to vacations relates to the choice of the date. Although an employee who has signed a permanent contract has to wait 1 year before taking them, he can negotiate, at the time of hiring, by asking for a few days during the first year. However, an employee with a fixed term contract must generally wait until the end of his contract to take his vacations, or else receive his 4% vacation cheque.
And social benefits
An employer can decide to offer additional social benefits (dentist, alternative medicine, etc.) to his employees who are hired on a conventional basis. And, as Me Alain P. Lecours points out, the employer can decide, or not, to share it with his employees that have been hired on fixed term contracts. So for practical reasons it is often preferable to pay the equivalent of the social benefit in the form of salary to his employees rather than granting them social benefits for the term of the contract.