Employment Contracts in Brazil
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Discover the different employment contracts in Brazil
An employment contract is an agreement issued during the hiring or renewal process. It establishes the terms of your work relationship between a company and a person. Today, there are many types of labor contracts in Brazil that companies can offer to their employees.
To that extent, it is essential for companies to be aware of the different labor contracts in Brazil so they can identify which one is best. Moreover, choosing the right contract ensures that the company remains in compliance with the legislation. This also ensures that both sides – employer and employee – are fully aware of their rights and duties during the term of the employment relationship.
In this article, we outline the different types of employment contracts in Brazil and the Brazilian primary forms of contracts.
Employment contracts in Brazil
Indefinite-term contract
Obviously, the indefinite-term contract is the most traditional contract in Brazil. In this model, the contract has no end date after the probation period, which has a maximum duration of 90 days.
In this agreement, company and employer may terminate the contract at any time under the following circumstances:
- Without cause;
- With cause;
- Dismissal/dismissal by mutual agreement.
All the benefits, rules, and norms arising from this type of contract are related to the CLT. Given that, the contract guarantees greater security for those involved.
Learn more about the Brazilian labor laws.
Fixed term contract
The fixed-term contract is another employment contract in Brazil. Unlike the previous option, a fixed-term employment contract lasts for a specified length of time. Then, the employer must establish the start and end date of the contract validity, which must not exceed a period of two years.
The validity of this contract is based on three rules, according to the Consolidation of Labor Laws (CLT):
- contracting of service whose nature justifies the predetermination of the contract term
- contracting business activities of a transitory nature
- Employee’s hiring on a trial basis
Normally, a fixed-term employment contract should finish before the end of the agreement, by either the employer or the employee. Also, at the end of the contract the worker has reduced rights. For instance, he does not have the guarantee of prior notice, as well as access to the 40% fine of the FGTS or unemployment insurance.
Temporary contract
Likewise, the temporary employment contract has a start and end date. This agreement is designed to meet the need to legally define the relationship between employers and employees on a non-permanent basis.
In practice, this type of contracting regime occurs when a company experiences a seasonal increase in business or needs to replace a vacant position for a short period. Unlike the fixed-term contract, the maximum time allowed for the contract to be valid is currently 120 days, whether consecutive or not. In addition, both parties can extend the term only once, for the same period.
In this modality, the company must also register the conditions in the professional’s workbook, and the professional will have the same rights as in the undetermined term regime, as foreseen in the CLT.
Occasional contract
The occasional employement contract is only used in specific cases, in which the firms need an employee for a short period of time. In fact, the occasional model does not create an employment relationship. Since this agreement does not create an employment relationship, the professional does not have the same rights as employees hired under the CLT regime.
For example, companies that need technicians for occasional maintenance can stipulate a occasional employment contract.
Outsourced Work Contract
This type of contract is signed between two companies, when some activity of the contracting company is transferred to the responsibility of a contractor specialized in a certain area.
The contractor is responsible for the relationship with the employees, making payments, training, and other obligations.
Intermittent Work Contract
This is another model among the types of employment contract in Brazil. It allows a professional to work under a sporadic work day.
Firstly, their remuneration is according to the period of service provision. Another point is that the employee is entitled to vacation, FGTS, social security and 13th salary proportional.
The intermittent contract also cannot require exclusivity in periods of inactivity.
Partial Employment Contract
The partial employment contract has a reduced work day, with a limit of 30 hours per week. Alongside, it is not possible to work overtime or to settle a work day of up to 26 hours per week.
Vacations are also thirty days per year and those hired under this regime can opt to receive one third of this period as payment.
Home office contract
The home office employment contract in Brazil is also one of the types of contract regulated by the labor reform.
Normally, the professional will work primarily outside the company’s premises, and may appear there sporadically. The agreement document need to include the activities performed by the employees. The document must specify as well the equipment needed to perform them.
Internship
The internship contract is for students seeking to improve some professional skill before graduating in a certain area. Internship and apprentice contracts must last for a maximum period of two years.
The workload cannot exceed 30 hours per week. And after a period of service of more than one year, the employers must provide 30 days of vacation to the student.
Choose the right contract with Europortage
Managing contracts can be complex when it comes to compliance. That’s why we recommend working with a direct and local partner like Europortage.
Our team of local experts is on hand to support you throughout the entire employee lifecycle, including time-off management. We can give you clear advice on business incorporation and global hiring, in addition to handling employment contracts, payroll, and benefits. That way, you can focus on growing a world-class team and business.
Get in touch to find out more and start hiring top talent in Brazil and Mexico!
