Open-ended contract: what it is and how it applies
Posted: Thu Dec 05, 2024 10:43 am
The Permanent Contract or Permanent Employment Contract is entered into between the employer and the employee without a set duration, in accordance with article 147 of the Labor Code . This permanent contract does not have a stipulated end date . There is no need for renewal, thus offering greater stability to the employee.
The law allows the hiring of permanent workers in the following situations:
Termination of a fixed-term contract (which cannot be renewed otherwise);
Hiring for positions of high responsibility;
Hiring workers with specific skills.
It is also considered an open-ended contract whenever:
the term of a fixed-term employment contract has expired;
the number of renewals of a fixed-term employment contract is exceeded;
mandatory information is missing from a contract;
a worker continues to work after the expiry date line phone number data an indefinite-term contract (or 15 days after the expiry date).
Learn more about the types of employment contracts in our article What Types of Employment Contracts Exist .
Trial Period
According to the Labour Code, during the trial period, both the employer and the employee may terminate the contract without prior notice and without any compensation. Therefore, in an open-ended contract, the trial period has the following duration:
60 days for workers in companies with less than 20 employees;
90 days for workers in companies with more than 20 employees;
180 days for positions of responsibility or with functions of technical complexity;
240 days for senior management or management positions.
Note: These periods may be reduced, in the event of an agreement between the employer and the employee.
Termination of a Permanent Contract
There are deadlines for communicating the desire to terminate an employee's contract. The employer must communicate this in writing with the following advance notice:
7 days - contract less than 6 months;
30 days - contract between 6 months and 2 years;
60 days - contract over 2 years.
Elements of a Permanent Employment Contract
According to the Authority for Working Conditions, the permanent employment contract must contain the following elements:
Identification of the worker and the company;
The place of work and working hours (daily and weekly);
The start date of the contract;
Description of the category and functions to be performed;
Indication of trial period deadlines;
The value and frequency of remuneration and other bonuses included;
Notice periods in the event of contract termination.
The law allows the hiring of permanent workers in the following situations:
Termination of a fixed-term contract (which cannot be renewed otherwise);
Hiring for positions of high responsibility;
Hiring workers with specific skills.
It is also considered an open-ended contract whenever:
the term of a fixed-term employment contract has expired;
the number of renewals of a fixed-term employment contract is exceeded;
mandatory information is missing from a contract;
a worker continues to work after the expiry date line phone number data an indefinite-term contract (or 15 days after the expiry date).
Learn more about the types of employment contracts in our article What Types of Employment Contracts Exist .
Trial Period
According to the Labour Code, during the trial period, both the employer and the employee may terminate the contract without prior notice and without any compensation. Therefore, in an open-ended contract, the trial period has the following duration:
60 days for workers in companies with less than 20 employees;
90 days for workers in companies with more than 20 employees;
180 days for positions of responsibility or with functions of technical complexity;
240 days for senior management or management positions.
Note: These periods may be reduced, in the event of an agreement between the employer and the employee.
Termination of a Permanent Contract
There are deadlines for communicating the desire to terminate an employee's contract. The employer must communicate this in writing with the following advance notice:
7 days - contract less than 6 months;
30 days - contract between 6 months and 2 years;
60 days - contract over 2 years.
Elements of a Permanent Employment Contract
According to the Authority for Working Conditions, the permanent employment contract must contain the following elements:
Identification of the worker and the company;
The place of work and working hours (daily and weekly);
The start date of the contract;
Description of the category and functions to be performed;
Indication of trial period deadlines;
The value and frequency of remuneration and other bonuses included;
Notice periods in the event of contract termination.