Term Contracts Under Brazilian CLT Labor Law

Term Contracts Under CLT Article 443

The employment contract may be agreed expressly or tacitly, verbally or in writing, for a specified period or indefinitely.

Definition (CLT Art. 443 § 1)

A term employment contract is one whose duration depends on a prefixed term, the performance of specified services, or the completion of a certain event capable of rough estimation.

When Term Contracts Are Valid (CLT Art. 443 § 2)

A term contract is valid only in the following cases:

• Services of a transitory nature that justify predetermining the period;
• Temporary business activities;
• Experience contracts.

Example for temporary business activity: An Easter egg factory can hire employees for a specific period.

Maximum Duration (CLT Art. 445)

The maximum duration for temporary business activities or transitory services is 2 years (Art. 445 of the CLT).

For experience contracts, the maximum period is 90 days.

Consequences of Rule Violations

Any breach of the rules governing term contracts results in the conversion of the fixed-term contract into an indefinite contract.

Extensions (CLT Art. 451)

A term contract can be extended only once, provided the total duration does not exceed the maximum limit (e.g., 2 years or 90 days for experience contracts).

An extension, express or tacit, beyond the first one converts the contract to indefinite.

Example: An experience contract for one month can be extended only once.

Successive Contracts (CLT Art. 452)

If a new term contract is signed within 6 months after the termination of a previous term contract with the same employee, the new contract is considered indefinite.

Exception: This rule does not apply if the new contract is for a transitory employee or activity.

Example: You cannot terminate a term contract and rehire the same employee on another term contract within 6 months, unless the exception applies.

Worker Rights and CLT Perspective

Workers on term contracts are entitled to the same rights as those on indefinite contracts, proportionally.

While the worker knows the contract end date, the CLT views this type of contract cautiously as it can create instability or uncertainty regarding continued employment compared to indefinite contracts.