Indefinite Contract

An indefinite labor contract (contrato a plazo indefinido) in Chile is an employment agreement without a predetermined end date. This type of contract is the most common form of employment relationship and provides both the employer and employee with greater stability compared to fixed-term contracts. Indefinite labor contracts are governed by the Chilean Labor Code, which establishes the rights and obligations of both parties involved.

Key features of an indefinite labor contract in Chile:

1. No fixed duration: Unlike fixed-term contracts, indefinite labor contracts do not have a predetermined end date. This means that the employment relationship continues until either the employer or employee decides to terminate the contract.

2. Termination: Both the employer and employee can terminate an indefinite labor contract by providing a written notice. The employer must provide a valid reason for dismissal, as specified in the Labor Code, and give the employee 30 days' notice or pay the equivalent salary in lieu of notice. In cases of unjustified dismissal, the employee may be entitled to severance pay. The employee can also terminate the contract by providing 30 days' notice or paying the equivalent salary in lieu of notice.

3. Severance pay: If the employer terminates the contract due to business needs (necesidades de la empresa), the employee is entitled to severance pay, which is calculated based on the employee's length of service. For every year of service, the employee is entitled to one month's salary, with a maximum of 11 months.

4. Trial period: Although the Chilean Labor Code does not formally recognize a trial or probationary period, during the first 30 days of an indefinite contract, either party can terminate the contract without providing a reason or paying severance.

5. Rights and obligations: Both the employer and employee have rights and obligations under an indefinite labor contract. The employer must provide a safe working environment, pay the agreed salary on time, and comply with all applicable labor laws and regulations. The employee must perform their duties diligently, follow the employer's reasonable instructions, and respect the company's policies and procedures.

6. Mandatory clauses: Indefinite labor contracts must include specific information, such as the names, nationalities, and addresses of both parties; a description of the employee's job duties and responsibilities; the place or city where the work will be performed; the employee's salary, including any additional benefits or allowances; the agreed working hours; and the date the employment relationship begins.

In summary, an indefinite labor contract in Chile is an employment agreement without a predetermined end date, providing greater stability for both the employer and employee. This type of contract is subject to various rules and regulations under the Chilean Labor Code, which govern the rights, obligations, and termination procedures for both parties involved.