Characteristics of the fixed-term contract in Colombia
In Colombia, the fixed-term contract is one of the most used types of labor contract. This type of contract is very common in situations in which it is necessary to hire a worker for a specific task or project, or to cover a temporary need in the company.
In this article, we will talk about the characteristics of the fixed-term contract in Colombia and its connection to setting up companies in Colombia.
Maximum duration of the fixed-term contract
In Colombia, the fixed-term contract cannot last more than three years. This is the maximum duration allowed by law, although it can be renewed indefinitely for periods equal to the previous one, as long as they do not exceed 3 years. In other words, it is not possible to enter into a fixed-term contract for a period of 4 years, but it is possible to renew or extend a 3-year contract for 1 year or for the same time.
In special situations, such as when it comes to large-scale construction projects, fixed-term contracts can be signed for a period of more than three years, but this must be done with the express authorization of the Ministry of Labor.
In any case, the duration of the fixed-term contract must be clearly specified in the contract and cannot exceed the maximum term allowed by law.
The fixed-term contract must be in writing
Another of the characteristics of the fixed-term contract in Colombia is it must be in writing. The contract must contain detailed information on the duration of the contract, the salary and working conditions of the worker, as well as any other relevant information.
The law clearly establishes that, although the employment contract may be in writing or verbal, in the case of fixed-term contracts, these must be in writing. Otherwise, it will be understood that the contract is of indefinite duration.
The reason behind this requirement is that the fixed-term contract can only generate certainty about its duration when there is a probative document that allows the precise identification of the contract’s expiration date. If the duration of the contract is not known exactly, it will be considered that it is of an indefinite nature. Therefore, it is not possible to enter into a fixed-term verbal contract.
In addition, thanks to the fact that the fixed-term contract must be in writing, it is possible to avoid misunderstandings between the employer and the employee, as well as to protect the rights of both parties in case of legal disputes.
Renewal of the fixed-term contract of less than and more than one year
In Colombia, there are specific regulations for the renewal of fixed-term contracts of less than one year and fixed-term contracts of more than one year.
Renewal of the contract for a fixed term of less than one year
In the case of fixed-term contracts with a duration of less than one year, their renewal can only be carried out for a maximum of 3 periods equal to or less than the current one. From the fourth renewal, the duration of the contract may not be less than one year.
It should be noted that, from the fourth renewal, the minimum renewal will be considered to be one year, as long as the parties remain silent in this regard. In other words, if the parties do not expressly agree otherwise, the automatic renewal of the fixed-term contract will be one year from the fourth renewal.
Renewal of the contract for a fixed term of more than one year
In the case of fixed-term contracts of more than one year, these can also be renewed up to three times. However, the total duration of the contract, including renewals, cannot exceed three years.
Again, it is important to note that contract renewals must be in writing and must be done before the original contract expires.
Notification to not renew the fixed term contract
Another important feature of the fixed-term contract in Colombia is the notification to not renew the contract. If an employer does not wish to renew a fixed-term contract, it must notify the worker at least 30 days in advance. Failing to do so, the contract will be automatically renewed for a period equal to the one that existed.
This is the reason why the notification of the days of notice is a crucial aspect, since even if it is done with one day less than what is required, the contract will be considered renewed automatically. Therefore, it is important to comply with the notice period established by law in order to avoid possible conflicts or misunderstandings.
Another aspect to take into account is that, in the event that the employer does not notify the worker with the required anticipation, he must pay compensation equivalent to the salaries corresponding to the notice period that was not respected.
This article contains basic information of what you need to know about the characteristics of the fixed-term contract in Colombia. As you will have been able to verify, there are many concepts and aspects to consider, so I recommend the use of accounting services that are capable of carrying out the entire process impeccably.
If you are interested in accounting advisory services, do not hesitate to contact us. We are an accounting and law firm specialized in labor legal advice. With extensive experience in the area, JLC Auditors registers and creates companies providing comprehensive support to our clients in all aspects related to labor law. If you want to have expert and efficient legal advice, you can contact our lawyers, who will be willing to help you in everything you need.
At JLC we know that compliance with labor regulations is essential for the success of any company, which is why we work tirelessly to ensure that our clients are always protected and in compliance with current legislation.