Types of employment contracts and their impact on employee well-being

By signing any contract, people commit themselves to respect a certain agreement. In many cases, signing a contract seems to be stressful for employees. No matter the company, it is important to understand the rights and obligations that we have by the Law. All the laws and regulations may seem confusing at first, so we decided to give a brief overview of all contract types that exist on the market and help you gain a better understanding of them. Alongside the contract types, we also outlined the main psychological stressors that occur due to different types of employment. Let’s get you ready for your next job interview!

In the beginning, let’s take a look at all types of contracts defined by the Labor Law.

The Labor Law of the Republic of Serbia, among other things, regulates the establishment of an employment relationship between an employee and an employer, as well as the employment contract and all its forms. An employment contract is a document that is valid from the moment the employer and the employee sign it, and it regulates the rights and obligations of both parties.

The employment contract can be concluded for a specified or permanent period. When the duration of the contract is not indicated in the document, it means that the contract is permanent.

Fixed-term contract

A fixed-term contract is concluded when it is justified by the employer’s need to complete the work within a certain period (up to 24 months at the most). In specific cases this period can be prolonged, such as replacing an employee who is temporarily absent, due to work on a project, with foreign residents until the expiration of the work permit, ect.

Part-time work

The employment relationship can be based on part-time for an indefinite or fixed time with the same conditions as for full-time employees performing the same job. This type of contract allows the employee to perform another job with another employer.

In addition to “classic” employment contracts, the employment can also be established through other types of contracts – a contract for temporary and occasional jobs, a service contract, a contract for professional training and development, or a contract for additional work. Contracts concluded in this form imply work outside employment.

Contract for temporary and occasional jobs

 The contract for temporary and occasional jobs is concluded to perform jobs that do not last longer than 120 working days during the calendar year(eg.  agricultural seasonal work is often defined by this contract).

Service contract

The employer can conclude a service contract for the purpose of performing tasks that are outside the employer’s activities, and which have as their subject the independent production or repair of a certain thing, the independent execution of a certain physical or intellectual work. Therefore, in order to conclude a contract with a person outside the employment relationship, the employer must not perform that work as a primary or secondary activity. For example, freelancers can enter into a service contract with the client.

Contract for professional training and development

As a condition for independent work in certain professions, the student has the obligation to perform an internship with a certain employer. Therefore, it is precisely the contract for professional training and development that defines this type of work outside the employment relationship for people who establish employment for the first time.

Contract on supplementary work

An employee who works full-time for an employer, but needs additional income, can conclude a contract with another employer on supplementary work, but up to one-third of full-time work at the most.

What do the studies say?

Numerous studies show that people react uniquely to different employment conditions. Therefore, people prone to anxiety prefer permanent contracts, while fixed-term contracts evoke uncertainty and cause stress. On the other hand, freelance and fixed-term contracts are more suitable for stable people for whom flexibility is important.

Also, it is important to point out that the latest research by the Institute of Statistics shows that the largest number of employees in Serbia has a permanent contract (out of the total number of 2,192,400, there are 421,700 employees with a fixed-term contract[1]). Although at first glance it seems that the portion of employees with permanent contracts is high, It is still significantly lower than the European Union average.

Bearing in mind that certainly a large number of employees in our country, as well as in Europe, are under fixed-term contracts, it is important to point out how such a situation can affect the stress and well-being of employees.

If you have ever found yourself in a situation where you have a contract for a fixed-term contract, you may be familiar with the feeling of anxiety before the contract expires and the fear of whether it will be extended, no matter how well it seemed to you that you performed during the period. This is exactly what some findings are talking about.

  • Some earlier research shows that employees on fixed-term contracts or temporary workers often fear that they will not get enough tasks or working hours at work and that this will lead to contract termination. Furthermore, employees with fixed-term contracts or freelancers often work overtime and do not turn down jobs out of fear of losing potential opportunities in the future[2].
  • With employees who work on temporary and occasional jobs or on a fixed basis, if the responsibilities are not clearly defined, there may be a conflict of roles, while it has been shown that this is not usually the case with freelancers if they have control over the work process[3]. Conflict of roles occurs when there are contradictions between different roles that a person assumes or performs, in this case, on a professional level. Usually, the conflict is the result of conflicting obligations that result in a conflict of interest.
  • Then, when it comes to the integration of employees into the organization and social interaction, employees who do not have a permanent contract often feel marginalized, especially if they are a minority within the organization.
  • Especially important, the way an employee with a fixed-term contract or a contract for temporary and occasional jobs will feel, and even perceive its position within the company, depends a lot on the person’s personality characteristics and belief in its skills and abilities. Hence, Greenhalgh and Rosenblatt [4]note that business insecurity is a complex subjective feeling, and in a study by Sill, Sora, and Gracia[5], which establishes the existence of a connection between business insecurity and health consequences, they state that business insecurity depends on the development of the skills that employees have and the desire to work.

In the end, it is important to remember that there is not one type of contract or employment that is ideal for everyone. Numerous factors affect the way you perceive employment conditions.

Hope that this review will help you understand the differences the next time you change jobs, but also think about your preferences and choose your work environment accordingly.



[1] https://publikacije.stat.gov.rs/G2022/Pdf/G20225682.pdf

[2] https://www.jstor.org/stable/3379109

[3] https://www.researchgate.net/publication/247569840_Health_and_Well-Being_in_the_Workplace_A_Review_and_Synthesis_of_the_Literature

[4] https://www.researchgate.net/publication/228079587_Job_Insecurity_Toward_Conceptual_Clarity

[5] https://www.researchgate.net/publication/46545619_Job_insecurity_and_employees’_attitudes_The_moderating_role_of_fairness

Burnout – a modern employee disease

Too high expectations, short deadlines and consequently high pressure are more than ever part of our business everyday life in the 21st century, and at the same time, those are the most common causes of the burnout syndrome. If you have a job where you are chronically under stress and you do not have adequate mechanisms to manage stress levels, unfortunately you can easily experience a burnout.

This expression was first used by a psychologist Herbert Freudenberger more than forty years ago, and he described it as a condition of mental and physical exhaustion caused by professional life. The subject of Freudenberger’s analysis were ‘helping’ professions – such as nurses and doctors because they directly work with people where those relationships can sometimes be extremely difficult and often emotionally demanding (the spiritual suffering of a patient or death).  Models by which we live today and do business, as well as challenges that are placed before employees are harder than ever, so the burnout syndrome is carried over to all other professions.

Recently burnout was recognized as a syndrome from the medical point of view (by the World Health Organization) since a growing number of employees, especially young people, suffer from it. Burnout is accompanied by physical and psychological symptoms, and it differs from simple fatigue and exhaustion.

Burnout is a body’s reaction to a long-term exposure to stress that can be caused by work tasks (more precisely by the amount of work that is almost impossible to complete within the predetermined deadlines and overtime as its result), but also relations between colleagues and neglecting our own needs. The culture ‘24/7 availability’ to our colleagues and clients, as well as the habit of eating lunch at the working desk while we fill in tables or respond to emails, contributed to the feeling of burnout that majority of employees claim to have experienced at least once during their working life. Gallup study shows that two-thirds of currently full-time employed Americans have experienced burnout, mostly by people in their twenties and thirties.

Due to swift pace of life in big cities that are more and more numerous each day and due to different values than fifty years ago, a growing number of people are participating in the race where we push ourselves to achieve better results, which resulted in this modern-day disease being more and more frequent.

The symptoms of burnout seem to be easily noticeable – it is characterized by a lack of enthusiasm and motivation for work. Activities that you once performed devotedly and with ease, can become strenuous both mentally (tension, feeling helpless, irritation) and physical (fatigue, malaise, pain) as a result of burnout. However, similar symptoms can occur in some other mental conditions (e.g. depression), so you should be careful and seek professional help and support.

Frustration and exhaustion caused by the burnout can severely endanger your work, personal relationships, as well as your health. This condition leads to a decrease in immunity, high blood pressure and diabetes.

It may sound trivial, but experts say that taking a break from work is the key to overcoming this syndrome. Besides, you need to change your life and business habits, so here are some ways to prevent burnout:

  1. Identify and set your physical and mental boundaries and learn to say ‘no’. Assertively set realistic goals that will be satisfactory for both you and your employer. Be free to express your opinion even in stressful situations and thus take a stand for yourself. Avoid multitasking, practice completing task by task instead (‘to-do’ lists can be of great help to you) – that way, work quality will be much higher, and stress will be lower.
  2. Restore the work-life balance – Make sure you do not check emails and make business calls outside of business hours and fill your out-of-office hours with people and activities you like.
  3. In your free time, as well as during your working hours, set aside some time for some exercises (a little stretching in the fresh air has a beneficial effect on reducing stress) and non-work-related mental activities (like reading novels). Five-minute breaks for chatting with colleagues or taking a short walk to the store can reduce stress and improve your work performance. Spend your lunch break in the canteen, instead of in front of your computer, and make sure you create a meaningful relationship with your colleagues.
  4. Do not work in a toxic work environment – make a positive impact on the relationships with coworkers as much as possible.
  5. Do not skip vacation – our body and mind need at least two weeks off at once, or longer if you can, to take a break from everyday tasks and obligations in order to return refreshed and achieve results more efficiently later.
  6. Work on yourself and develop your stress defense mechanisms.

However, if you feel burned out by overwork, it is best to seek professional help, and remember that even people who love their job a lot and enjoy it immensely experience burnout.

Throughout life, our priorities change, but to be successful in all fields and to be generally satisfied in life, our physical and mental health must always come first.

Some companies apply the Employees Assistance Program through which the burnout theme can be covered through professional support. See here which kinds of counseling such a program can support.

Have you thought about a change in your career path?

Nowadays, it is quite common for people to make a complete change in a career direction and make a shift to a new occupation. The speed under which so many new job roles are opened and the availability of jobs on a remote basis globally have inspired people for a change. Usually, this happens in situations where we encounter difficulties in finding a new position in our area, or we feel that our job is repetitive or without challenges. In these situations, people look for solutions that sometimes involve complete retraining. Whether you decided to change your career direction entirely, or you wish to gain additional skills and knowledge to get a better job, it is good to keep in mind that during the selection process for a new position you will often be asked to explain your decision and explain why you chose to make such a step.

Changing your career path can be a confusing decision for the person interviewing you if you choose not to explain your reasons for doing so. If the interviewer is looking at your CV where you have been in a particular field for five years and then progressed and later decided to completely refocus to another area, a very logical question to ask is: What are the reasons for a career change?

Do your best to be honest and open and give reasons for making this decision. Some of the most common reasons are greater interest in a new field, financial stability, greater opportunities for promotion, easier opportunity to find a job, etc. Any reason can be relevant and good if you explain it well.

During the selection process, you can probably expect to be asked for more detailed information about your current (old) job. Also, they could ask you to talk in more detail about the reasons why you decided to change your career path. Do not be surprised about it and do not think an interviewer is judging whether your reasons are good enough. His role is to understand them, not to condemn you.

The best way to increase your chances for getting a new job in a new area is to gain some practical experience in the field which you can get through projects conducted on your own or for someone pro bono. Make sure to mention these experiences in your CV so your proactivity and motivation for a new job could be seen.

A decision to make a change in the career direction is never easy. However, do not let this discourage you and prevent you from fulfilling your wishes. Good preparation and persistence are often enough to drive the change you want to make. 😊

If you need support during the career change process, take a look at our service Career Transition.