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The most common form of employment contracts offered in Canada are ‘indefinite-term’ contracts, otherwise known as fixed-term or permanent contracts. This form of contract runs for an indefinite period, until the contract of employment is terminated.
Under Canadian law, a written employment contract is not a statutory requirement but is recommended. A written contract, forms an explicit agreement between employer and employee and serves as reliable reference for both parties. From a compliance perspective, the contract of employment should cover the minimum employment terms, including employee benefits, salary, vacation entitlement, working hours as well as detailing specific provincial labor laws such as Ontario’s “right to disconnect” law.
Fixed-term contracts, commonly referred to as limited or temporary contracts in Canada, are also used but less frequently than open-ended contracts.
Under a fixed-term contract, the working relationship exists only for a specified period. Note, if the contract is terminated without just cause before the pre-set termination date, the employee is entitled to the remaining value of the fixed-term contract.
The rise of the gig economy has led to an increase in self-employed and freelance professionals. Independent Contractor Agreements are established with self-employed individuals or freelancers, usually for the set duration of a specific project.
As independent contractors are not classed as employees, they are not covered by the minimum employment terms or legislation.
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Your business can easily hire employees in Canada without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
Indefinite-term contracts vs fixed term contracts: The major difference is permanence, indefinite contracts employ on a permanent basis, whereas fixed-term employees are employed for a specified period of time.
It will depend on your needs and objectives. Horizons offer a range of global recruitment solutions, contact us for a full demo or consultation about your hiring project.
