Fixed-term employment contracts in Brazil: rules and early termination

A fixed-term contract is one that is born with a date or condition for ending. Brazil's CLT allows it only for transitory services, transitory business activities and probationary periods (art. 443, § 2). It lasts at most 2 years, can be extended only once and, if the employer ends it early without cause, the employer pays half of what was left (art. 479).

Quick summary

• Maximum term: 2 years; probationary contracts, 90 days (art. 445).
• Extension: only once, within the maximum term; more than that and it becomes an open-ended contract (art. 451).
• New contract with the same person: only after 6 months, with exceptions (art. 452).
• Early termination by the employer: compensation of half the pay up to the planned end.
• Rights: salary, FGTS, proportional 13th salary and vacation, like any employee.

When the employer can use it

1. Transitory service: a construction job, a project or a demand with a start and an end.
2. Transitory business activity: the business itself is temporary, such as a trade-fair stand.
3. Probation: to assess the employee before open-ended hiring.

Outside these cases, the term is invalid and the contract is treated as open-ended. Agency temporary work follows another law, 6,019/1974.

What happens at the end

• On time: outstanding salary, proportional 13th and vacation plus 1/3, and FGTS withdrawal. No notice period or 40% penalty.
• Employer ends it early: in addition, half of the salaries left until the planned end (art. 479).
• Employee leaves early: may have to compensate the employer's loss, capped at what they would receive (art. 480).
• Early-termination clause: if the contract has this clause (art. 481), open-ended contract rules apply, with notice.

Frequently asked questions

Does a fixed-term contract carry the 40% FGTS penalty?

Not when it ends on the planned date. If the employer ends it early and the contract has an early-termination clause, the rules for dismissal without cause apply.

How many times can the contract be renewed?

One extension, within the 2-year total limit. A second extension turns it into an open-ended contract.

Does a pregnant worker have job security in a fixed-term contract?

Brazil's Superior Labor Court (TST) says yes, under Precedent 244, including probationary contracts. The rule does not apply to temporary work under Law 6,019.

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Read more in this series

• Probationary contracts: 90-day limit and rights
• Temporary work: rights and time limits
• Severance pay for each type of exit
• Index: complete guide to labor rights

Topic: this guide is part of Types of employment contract, with all the guides on the subject.