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Employment contracts serve as a binding document between the employee — whether temporary or permanent — and the employer, stating the type of employment as well as the conditions attached to the employment. In this way, both the employer and employee understand the terms of the employment. In the case of a temporary employment contract, the employer will state in the contract that the employee is only a limited type of worker, with a stated length of time to spend working for that particular employer. The temporary employment contract, just like any other contract, serves the very important purpose of listing all of the expectations and duties of the two parties in the contract.
In the case of a temporary employment contract, the agreement might be between the employer and the employee, or it might be between the employer and the supplier of labor, in this case, an employment agency. Most times, companies that do not want to be bothered with finding temporary employees simply contract the services of temporary employment agencies with the understanding that the employment agency will supply the company with the specific type of human capital required by the company. In this type of situation, the employment agency will supply the necessary paperwork and contracts for the employee to sign and also serve as a sort of middleman in the relationship between the employer and the employee.
For instance, the temporary employment agency will brief the employee of the duties required of the job, including the time to report to work, the type of work, the hours and the benefits. Any payments of wages to the employee will be handled by the employment agency, a process that usually involves charging the employer a significantly higher amount than what it pays to the employee. Whatever the case, the employer considers the employee supplied by the agency to be a temporary worker, and the contract between them is a temporary employment contract.
A permanent employee and a temporary employee usually have similar expectations in terms of basic remuneration and treatment. This means that the temporary employee will, in most cases, earn the same money that a permanent employee in that position would earn. The only difference would be that such an employee might not be subject to any vested interests in terms of expectations of bonuses and other types of rights that accrue to permanent employees by virtue of their longevity on the job.
A good friend of mine looked for a job for over a year before she signed a temporary employment contract for a job through an employment agency.
Even though she did not receive any medical benefits or anything like vacation time or sick pay, she at least knew she had a full time job for a year.
At the end of that year, the company offered her a full time, permanent position which she gladly accepted. This was such a relief to her knowing she now had a permanent job with benefits again.
The temporary employment contract was the first step, and even though she didn't have benefits, knowing she had income coming in for at least another year was very helpful.
I found out there can be a significant difference in pay between what a temporary employee receives and what the employment agency receives.
When I was working as a temporary employee for a bank, and later took a position as a full time employee, I found out the employment agency was receiving $5.00 more per hour than what I was receiving.
When I took the permanent position I did get an increase in pay, but it wasn't $5.00 an hour more. I can see why companies hire an agency to find part-time employees for them, but I can also see why they offer permanent positions if they are a good employee.
Once I became a permanent employee of the bank, the temporary contract between the bank and the employment agency was no longer valid.