In Chile there are three types of contracts. Their characteristics are jointly defined by the length of the contract and the formulas that the law provides for terminating the relationship. When the type of contract that defines the relationship between employee and employer is defined, both sides must agree on the details of the employment relationship.
Types of contracts
– Finite contract: this contract has a known termination date and can last anywhere from one day to a year. As the reason for the termination of the labor relationship is the expiration of the timeframe agreed upon in the contract, the laws that require one month notice and payment for years of service and vacation do not apply.
However, there is a maximum of times that a finite contract can be issued to the same employee. The law dictates that the second renewal of the work contract must be with an indefinite contract. Also, if the employee continues to work with the company after the contract has expired, the contract automatically becomes in indefinite contract.
– Indefinite contract: this contract does not have a known termination date. The form in which this type of contract is terminated is for “needs of the company”. In this case the employer must pay the corresponding severance package if the employee has been working with the company for at least one year.
– Project contract: this contract has a definite termination, but it does not stipulate a specific end date. The best example of this type of contractual relationship is the one between construction workers and construction companies. The reason for the termination of the contract is the finalization of a project and it is not necessary to neither give warning nor pay severance.
For more information, please visit Department of Labor website.
Foreigners who wish to work in Chile must have the proper authorization that permits them to reside in the country and a separate authorization that allows them to perform labor activities. To obtain a work visa one must go to the Alien Status Office of the Ministry of the Interior and normally the visa is dependent upon a work contract.
The web page for the Department of Labor (organization in charge of overseeing the labor market) contains a complete guide with all of the information that foreigners needs to know to be able to work in Chile.
This post is also available in Spanish