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The main difference between a fixed-term (befristeter Arbeitsvertrag) and a permanent (unbefristeter Arbeitsvertrag) employment contract
| befristeter Arbeitsvertrag (fixed-term contract) | unbefristeter Arbeitsvertrag (permanent/open-ended contract) | |
|---|---|---|
| Definition | A contract concluded for a specific period of time or until a particular project is completed. It ends automatically without the need for dismissal. | An employment contract without a defined end date; it continues until one of the parties terminates it (resignation or dismissal). |
| End of the contract | Ends automatically when the agreed duration or project ends, without a notice of termination. | Does not end unless the employee resigns or the employer lawfully terminates it with a mandatory notice period. |
| Notice period | Usually not required, because the contract expires automatically – unless the contract explicitly states otherwise. | Legally required (for example, 4 weeks or more, depending on the length of service and contractual provisions). |
| Renewal | It may be renewed up to three times for a total maximum duration of two years, unless there is an objective reason for a longer fixed term (§ 14 TzBfG). | No renewal is needed, as the contract continues indefinitely. |
| Protection against dismissal | Often less protection; termination before the end of the fixed term is generally only possible if there is a specific clause in the contract or in cases of very serious reasons. | Stronger protection under the Protection Against Dismissal Act (KSchG), usually after 6 months of employment in larger companies. |
| Reasons for use | Used when there is a temporary need (e.g. a temporary project, maternity/parental leave cover, holiday cover, or to try out a new employee). | Used when a long-term or indefinite employment relationship is intended. |
| Job stability | Lower stability; there is no guarantee that the contract will continue after the end of the fixed term. | Higher stability and better chances for long-term employment and career planning. |
| Social benefits | The same basic social rights (e.g. paid leave, sick pay), but with less continuity and security over time. | Full social rights with greater continuity and better opportunities for promotion, training and professional development. |
Quick summary:
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Fixed-term contract: Ends automatically, less protection, temporary stability, renewal limited by law.
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Permanent contract: Continues until formally terminated, higher legal protection, long-term job security.
Do you need a sample contract or a more detailed explanation of one of these types?
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