Permanent, Fixed-Term, Freelance, Platform Work Compared — What to Check Before Signing

The same job offers different protections depending on how the contract is written. One line in a posting — "freelancers welcome" or "fixed-term with a path to permanent" — changes the money and the holiday you receive a year later. Before choosing a contract, it helps to have the four forms laid out in a table.

At a glance

Item	Permanent	Fixed-term	Freelance (business)	Platform work
Four social insurances	All apply	All apply	Health + national pension, local enrolment	Varies by trade and contract
Severance pay	Yes	Yes (after 1 year)	No	No
Paid leave + weekly rest day	Yes	Yes (granted even under 1 year)	No	No
30-day notice of termination	Yes	Yes	Not applicable	Not applicable
Unemployment benefits	If eligible	If eligible	No	Some trades only
Parental leave	Yes	Yes	No	No

Permanent vs fixed-term — the law is nearly identical

Fixed-term workers are protected by the Labour Standards Act. That is why severance pay, annual leave, notice of termination and unemployment benefits work the same way. The difference is usually length of service.

• Under one year of service, severance pay does not accumulate (it requires at least one year).
• If a fixed-term contract passes two years, it can convert to an indefinite contract (under the Fixed-Term Employment Act).
• Annual leave accrues during the first year too: one day per month worked.

When a contract simply expires and is not renewed, that is "expiry of the term," not "dismissal," so notice of termination often does not apply. That means contract expiry is an easier exit than dismissal — which is exactly why the term and renewal clauses in the contract matter.

Freelance — the scope of protection starts in the contract

A freelancer is usually a business or an independent contractor. If you are not a worker, there is no severance pay, annual leave or unemployment benefit. What you get instead is income tax withholding (normally 3.3%) and the four social insurances you pay yourself.

That said, a contract labelled "freelance" can still be judged a worker in substance. The test is not the wording in the contract but the actual arrangement.

• Are you given instructions and supervision?
• Are working hours and place fixed?
• Is the pay regular, and does it make side work difficult?
• Does the company provide the tools and materials?

The closer you are to these conditions, the more the Labour Standards Act applies. Even if the contract says "you confirm you are not an employee," the conclusion can differ if the substance differs.

Platform work — coverage is widening

Delivery, driving, courier and home-service platform work sits in a separate category called "special-type platform employment." In recent years the scope of industrial accident insurance has widened, and part of the premium is borne by the platform company. How national pension and health insurance enrolment works, and whether employment insurance applies, still depends on the trade and the contract terms — so check the platform's contract and the relevant notices before starting work.

Contract checklist

Find these six lines before you sign.

1. Termination conditions and notice period — can it be ended at any time?
2. Payment timing and method — what day each month, and what gets deducted?
3. Who pays the four insurance premiums — is the split written down?
4. Equipment, materials and expenses — is there anything you must buy yourself?
5. Copyright and work product ownership — who owns what you produce?
6. Non-compete and confidentiality clauses — are the duration and scope reasonable?

Summary

• If you want stability, permanent or fixed-term employment (worker status) gives the widest protection.
• Fixed-term is not "worse treatment than permanent" — it is "employment with a fixed end date." Once you know that, negotiation gets easier.
• Freelance and platform work mean tax and insurance are your share. Build that cost into the rate.

This post reflects the general structure as of October 2026. Individual cases vary with contract terms and the applicable law, so for a specific judgement take the contract to the Ministry of Employment and Labour customer centre or get legal advice.