Fixed-Term Employment Contracts in Colombia: Everything You Need to Know Before Signing

What Is a Fixed-Term Employment Contract?

A fixed-term employment contract is one in which the parties agree on the duration of the employment relationship from the outset. In Colombia, this type of contract is governed by Article 46 of the Substantive Labor Code (Código Sustantivo del Trabajo — CST).

The contract may last up to three years and may be renewed indefinitely. Many people mistakenly believe that fixed-term contracts offer fewer protections than open-ended contracts — this is not the case.

Requirements for Validity

1. The contract must be in writing — if it is verbal, it is presumed to be open-ended.
2. The end date must be clear and specific.
3. For contracts shorter than one year, the contract may only be renewed up to three times for the same duration. From the fourth renewal onward, the minimum term is one year.

Notice of Non-Renewal

In order not to renew the contract, the employer must give the employee written notice at least 30 days before the expiration date. Failure to do so results in the contract being automatically renewed for the same period.

Practical example: If your contract expires on December 31, the employer must notify you no later than December 1. If notice is given on December 20, the employer must pay an additional 10 days' salary as compensation.

Settlement Upon Termination

Upon termination of the contract — whether by expiration or early termination — the employee is entitled to:

• Outstanding wages
• Proportional vacation pay
• Proportional service bonus (prima de servicios)
• Severance pay (cesantías) and interest thereon
• Compensation for damages (if terminated without just cause before the end of the agreed term)

Early Termination Without Just Cause

If the employer terminates the contract before its expiration date and without a legally recognized cause, the employer must pay the wages corresponding to the remaining period of the contracted term.

Example: If you are dismissed with four months remaining on your contract and your salary is COP $2,000,000 per month, the minimum compensation owed is COP $8,000,000.

When Does a Fixed-Term Contract Make Sense?

For the employer: projects with a defined duration, replacing employees on leave, or covering peak commercial seasons.

For the employee: when the employer offers better conditions in exchange for the certainty of a set term — but always keep in mind the possibility of non-renewal when negotiating your salary.

What to Review Before Signing

• ✓ That the duration is clearly established
• ✓ That the agreed salary is set out in writing
• ✓ That the specific job duties are described
• ✓ That the probationary period is addressed (maximum one-fifth of the contract term, not to exceed two months)

Did your employer terminate your fixed-term contract early or without proper notice? Our team can review your situation and advise you on the appropriate steps to take.

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