Contrato a plazo fijo, meaning "fixed-term contract," is an employment agreement with a predetermined end date. While used across Latin America, each country imposes strict rules on when fixed-term contracts can be used, how long they can last, and what happens when they are renewed.
Duration Limits by Country
In Argentina, fixed-term contracts can last up to 5 years but must be justified by the nature of the work. In Chile, the maximum is 1 year (2 years for managers or professionals). In Colombia, fixed-term contracts can be up to 3 years and can be renewed indefinitely. In Peru, the maximum varies by contract type, generally up to 5 years total across all renewals.
Automatic Conversion
Most countries will automatically convert a fixed-term contract to an indefinite-term contract (contrato indefinido) if renewal limits are exceeded or if the employee continues working after the contract expires. In Chile, a second renewal automatically converts the contract to indefinite. In Brazil, a fixed-term contract that is renewed more than once becomes indefinite.
EOR Relevance
An EOR ensures fixed-term contracts comply with each country's specific duration limits, renewal rules, and conversion triggers. They also manage the proper notice and termination procedures when a fixed-term contract ends, which differ from indefinite contract terminations.