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Pros and cons of temporary contracts for workers
Temporary Contracts: Everything about Labor Reform and the Benefits for Employees and Companies. We invite you to read our article.
Isabel García
HR Consultant
12 of March, 2025
In temporary contracts, an end date is agreed upon between the company and the worker. Just like indefinite ones, they have their advantages and disadvantages.
The assessment of the pros and cons will depend on what the worker and the company are looking for. Other aspects may also influence whether or not these contracts are advantageous for you.
Some of the most important ones are the qualification and the sector in which the company operates. Also, the company’s hurry to incorporate staff into the workforce, or your rush to enter the labor market.
What types of temporary contracts can be made
Usually, when companies opt to offer a temporary contract it is for several reasons. One of them could be that there has been a temporary increase in production.
This means they only need workers for a period without needing to expand the staff.
The use of this type of contract has changed after the latest labor reform. Let’s see which ones are available to you.
As well as their advantages and disadvantages, as this is something that interests you both as a worker and as an employer.
And they have specific characteristics. A series of specific requirements must be met in order to sign them.
The contract for works and service disappeared, and was one of the most used. So now temporary staff can only be hired in these two situations:
- For replacement.
- For production circumstances.
Advantages and disadvantages of the temporary contract for production circumstances
After the labor reform, this contract can be used in two situations in the company:
- Predictable circumstances.
- Unpredictable circumstances.
In the case of resorting to it for unpredictable production circumstances, it is advisable to have a plan for the necessary human resources. It can be formalized when the business activity is occasionally increased.
It is perfect for specific moments when the company needs to increase its production. This could be due to a large volume of orders or, for example, to cover vacation periods.
It cannot exceed 6 months and, if the maximum time has not been exhausted, it can be extended only once.
Finally, this contract model cannot be used on occasions when the fixed-discontinuous modality can be utilized.
The eventual contract for predictable production circumstances is also very advantageous for companies. Now they can take advantage of dates like Christmas or high season to hire with this modality.
However, before formalizing one of these documents, you should know their legal requirements:
- It can only be signed for 90 days a year and not continuously.
- The number of available days does not vary depending on the employees to be hired. This can limit the company’s activity due to a calculation problem. Therefore, an annual forecast of the use of this type of contract should be presented in the last quarter.
Advantages and disadvantages of the eventual contract for substitution
Companies can use this modality only when the worker who is going to be absent has the right to reserve his/her job.
For this reason, the contract can start 15 days before the worker’s absence. This way, the training of the new recruit can be attended to.
It can also be used in the event that a worker requests a reduction in working hours. With a new contract under this framework, the working hours of the person who has reduced it could be completed.
The limitations that the company has when using this contract is that it can only do so for a maximum of 3 months a year.
Once this period has been exhausted, another contract of the same circumstances cannot be made. Also, the document must specify the details of the person being replaced and the reason for the temporary nature.
Advantages and disadvantages of temporary contracts for workers
After seeing the advantages and disadvantages for companies, let’s talk about those for workers.
These contracts are perfect for those who are not looking for a stable position. Their flexibility in duration facilitates their compatibility with other aspects of life.
In addition, this contract model is also perfect for those who want to gain experience. It offers an initial contact with the labor field, even if it is not related to their studies.
These types of jobs provide knowledge about a specific area. Besides, they can also teach the worker how to establish labor relationships with different positions in the company.
For people with professional experience, these contracts offer flexibility and better personal time management.
Since workers can make long-term plans because they know from the beginning the end date. In this way, they can consider what career path they will take after this experience.
If you want to control all aspects related to temporary contracts and the proper operation of a company, the ideal tool is to use a employee database.
HR Software for contract management and more
Sesame HR is a human resources software with which you can control all the labor aspect of your company. This helps you save time and costs so that you can focus on what really matters.
It has a function of bag hours control, employee statistics, and task management to organize workdays.
In this way, you can control the schedule and manage shifts in a quick and easy way.
We invite you to continue reading our articles, where you will find very interesting content about human resources management. You will also be able to expand your knowledge about indefinite contracts.
Need help?
I'm Isabel, HR consultant at Sesame HR. Book a meeting with my team to help you.