Fixed-term contract

A fixed-term contract is employment that ends on a set date or when a set task is done. The employee still has full employment standards rights.

Also called: term contract, contract for a definite term, temporary contract, maternity leave cover contract

What fixed-term contract means

A fixed-term contract is an employment contract with a built-in end: a specific date ("until 30 June 2027") or the end of a specific task or event ("until the warehouse move is finished"). Small businesses use them to cover a parental leave, a busy project or a grant-funded role.

A fixed-term employee is still an employee. They are owed minimum wage, overtime, vacation pay, public holiday pay and the other employment standards in your province, and payroll deductions apply as usual. "Contract" here does not mean independent contractor.

The big difference is how the job ends. If it ends as agreed, it generally ends without the notice an ongoing employee would get. If you end it early, or keep renewing it, the rules can change, and the result depends on the contract's wording and your province.

How it works

Write the end point clearly. Use a date where you can. If the end depends on an event, such as an employee returning from leave, describe it precisely and add a latest end date. Put the contract in writing and have it signed before the person starts.

Decide what happens if either of you wants to end it early. Without a clear early termination clause, ending a fixed-term contract early can be costly. Many employers include a clause allowing early termination with notice that at least meets the employment standards minimum. Get advice on the wording.

Watch renewals. Several back-to-back fixed-term contracts for the same work can start to look like an ongoing job. Employment standards laws and courts treat certain fixed-term arrangements differently in each province, so check your province before you renew a contract more than once.

When the contract ends, you still have the usual end-of-employment steps: final pay by your province's deadline, any vacation pay owed, and a Record of Employment. An ROE is due when an employee has had, or is expected to have, 7 consecutive days with no work and no insurable earnings.

Is it the same in every province?

Fixed-term contracts are used across Canada, and employees on them keep their employment standards rights. What differs is how notice rules apply when a term ends, ends early or is renewed; the employment standards laws of each province treat certain fixed-term arrangements differently, so check with your province.

Example: Covering a parental leave

Fatima runs a 12-person dental office in Halifax. Her receptionist is starting a parental leave, so Fatima hires a replacement on a fixed-term contract.

The contract says it ends when the receptionist returns from leave, and no later than 31 March 2028. It includes a clause allowing either side to end it early with notice that meets the Nova Scotia minimum. Fatima puts the end date in her calendar so she can issue the final pay and Record of Employment on time.

Hollis handles the exit checklist

When a contract ends, Hollis, part of the Staffkin HR Suite, gives you the checklist: final pay timing, vacation pay owed and the Record of Employment deadline.

Try Hollis live

Free tools and guides for this

Questions about fixed-term contract

Does a fixed-term employee get vacation pay?

Yes. A fixed-term employee is an employee, so vacation pay and other employment standards apply as for any employee.

Can I end a fixed-term contract early?

Only on the terms in the contract or the law. Without a clear early termination clause, ending early can be costly, so get advice.

Do I have to give notice when a fixed-term contract ends?

It depends on the province and on whether the contract ends as agreed. Employment standards treat certain fixed-term arrangements differently in each province, so check yours.

Do I need to issue a Record of Employment at the end of a fixed-term contract?

Yes, when the employee has had, or is expected to have, 7 consecutive days with no work and no insurable earnings.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.