Under Article 87 of Labor Law No. 14 of 2025, a contract is made for an indefinite term, or for a fixed term if the nature of the work requires it. A fixed-term contract ends when its term expires under Article 154, while an open-ended one may be ended only for a lawful and sufficient reason with written notice three months ahead, under Articles 156 and 157.
Step by step
- 1
Renewal
The parties may agree to renew a fixed-term contract for similar periods, so put every renewal in a written agreement.
- 2
When it counts as open-ended
Article 88 treats it as open-ended from the start if it is unwritten, states no term, or continues after its term without a written agreement.
- 3
Contracts over five years
If a contract is made or renewed for more than five years, the worker may end it without compensation after five years, with three months' notice to the employer.
- 4
The Article 154 award
Article 154 also says that if the termination is by the employer, the worker is entitled to an award of one month's wage for each year of service, so have its scope reviewed legally before ending any long contract.
- 5
Contract for a specific task
It ends when the task is done, and if both parties carry on after that, it is treated as renewed for that task or similar ones, under Article 155.
- 6
Ending an open-ended contract
Termination by the employer for an unlawful reason requires compensation of at least two months' wage for each year of service, under Article 165.
Letting a fixed-term contract run on after its term without a written renewal makes it open-ended from the start, under Article 88.
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