Differences Between Permanent and Fixed Term and Contractual Employment
Today, individuals generally have two primary options for pursuing their professional activities: either working independently or entering into an employment relationship. To properly address matters related to different forms of employment, it is necessary to understand the concept of employment and the conditions governing each status.
Employment Conditions Under Different Employment Statuses
Concept of Employment
Employment is a contractual relationship between an employer and an employee established to provide services and to supervise and control work performance. Under an employment contract, the employee performs duties assigned by the employer in exchange for wages, which may be paid on an hourly, monthly, or other agreed basis. The terms and conditions of such contracts are primarily determined by the employer, although employees may negotiate specific provisions. Employment contracts generally grant both parties the right to terminate and may be concluded verbally, in writing, or via electronic correspondence.
Types of Employment
Employment contracts concluded within governmental bodies in Iran are generally classified into three categories: permanent employment, fixed-term employment, and contractual or service-based employment.
What Is Permanent Employment?
Permanent employment refers to the engagement of personnel in governmental institutions and official positions for the performance of sovereign and administrative duties. Individuals employed under this status must meet specific qualifications and successfully pass selection procedures relevant to the intended position. Governmental and sovereign roles carry decision-making authority in key public matters and therefore play a significant role in administrative and governmental operations.
From a legal perspective, employees engaged under permanent employment contracts are subject to the laws governing public service management and the national employment system.
Conditions for Permanent Employment
The conditions and requirements for permanent employment have been established in response to population growth and the growing number of applicants for public-sector positions. These conditions generally include:
- Possession of a relevant academic degree, at least at the bachelor’s level, corresponding to the advertised position.
- Successful completion of nationwide employment examinations.
- Possession of a certificate of completion of military service or a legal exemption for male applicants.
Types of Permanent Employment
- Probationary permanent employment.
- Definitive permanent employment.
Government agencies and public institutions typically enter into probationary employment contracts for a specified period to assess candidates’ qualifications and professional competence. Upon successful completion of the probationary period, eligible individuals may be offered definitive permanent employment. Candidates who fail to meet the required standards during this period are generally barred from reapplying for the same position for a specified duration.
What Is Fixed Term Employment?
Under fixed-term employment, individuals are hired to perform executive or administrative duties in accordance with the specific regulations set forth in the applicable fixed-term employment bylaws. This form of employment is often regarded as semi-permanent. Employees with satisfactory performance and employer approval may, in certain cases, continue their service under permanent employment status. All individuals employed under fixed-term contracts are covered by social security insurance during the term of their employment.
What Is Company Based Employment?
In company-based employment, individuals are hired by private companies or non-affiliated public entities. Under such arrangements, the employment relationship exists between the individual and an intermediary company, and no direct contractual relationship is formed with the government. The individual is therefore considered an employee of the contracting company rather than a public employee.
Concept of Service Employment Contracts
Service employment contracts apply to individuals engaged in support and service-related duties within public institutions. Such duties include cooking, custodial services, maintenance, and similar functions. Individuals employed under service contracts are also covered by social security insurance.
Differences Between Contractual, Fixed Term, and Permanent Employment
- Differences in Insurance Coverage: Under fixed-term employment, the employer is obligated to provide insurance coverage for employees. However, post-retirement benefits are generally not included. In contrast, permanent employment includes provisions for retirement benefits.
- Differences in Salary and Benefits: Permanent employees typically earn higher salaries and receive additional benefits and overtime pay compared with fixed-term and contractual employees.
- Differences in Organizational Recognition: Permanent employees are assigned official personnel identification numbers, which confer greater institutional recognition and stability. Organizations generally assume fewer long-term obligations toward fixed-term and contractual employees.
These employment categories also differ in bonuses, leave entitlements, and overall benefits.
Frequently Asked Questions About Differences Between Permanent, Fixed Term, and Contractual Employment
Permanent employment relates to engagement in governmental institutions and sovereign positions. Individuals must pass selection processes and employment examinations and are governed by public service laws. This form of employment includes both probationary and definitive stages.
Conditions include holding a relevant academic degree at least at the bachelor’s level, passing employment examinations, completion or exemption from military service for male applicants, and successful completion of a probationary period.
Fixed-term employment is intended for executive and administrative duties and is governed by specific bylaws. It is considered semi-permanent and may lead to permanent employment upon satisfactory performance. Fixed-term employees are covered by social security insurance.
Under contractual employment, individuals are hired by private or non-affiliated public companies rather than directly by the government. Service employees perform support and maintenance duties and are also covered by Social Security insurance.
Permanent employees receive higher salaries and broader benefits, including retirement benefits, compared to fixed-term and contractual employees.
Fixed-term and contractual employees are covered by social security insurance but generally do not receive retirement benefits. Permanent employees receive both insurance coverage and retirement benefits.
Yes. Subject to satisfactory performance and employer approval, fixed-term employees may transition to permanent employment. What is permanent employment, and what are its main features?
What are the conditions for permanent employment?
What is fixed-term employment, and how does it differ from permanent employment?
What is contractual or service employment?
What are the differences in salary and benefits among these employment types?
How do employment types differ in insurance and benefits?
Can fixed-term employees become permanent employees?
