Indefinite Employment Contract Chile (Contrato de Trabajo Indefinido)

An Indefinite Employment Contract Chile (Contrato de Trabajo Indefinido) is a formal written agreement between an employer (empleador) and a worker (trabajador) establishing a permanent employment relationship with no predetermined end date, governed by the Código del Trabajo (DFL No. 1 of 2003, coordinating the text of Ley 18.620 of 1987 with all subsequent amendments). Article 7 of the Código del Trabajo defines the employment contract as a convention by which the employer and worker mutually agree on the provision of personal services, under dependency and subordination, in exchange for a determined remuneration — and Article 159 governs the causes of termination applicable to indefinite contracts.

The constitutional foundation for employment law in Chile rests in Article 19 No. 16 of the Constitución Política de la República de 1980 (as amended), which guarantees freedom of work (libertad de trabajo), prohibits unjust termination, and protects the right to fair remuneration. Article 19 No. 18 of the Constitución guarantees the right to social security, which underpins the mandatory AFP pension system (DL 3.500 of 1980), the FONASA/ISAPRE health coverage framework (Ley 18.469 of 1985 and Ley 18.933 of 1990), and the AFC unemployment insurance system (Ley 19.728 of 2001).

Under Article 9 of the Código del Trabajo, all employment contracts must be in writing (escriturado) within fifteen calendar days of the worker commencing services — or within five days for contracts of shorter duration. Failure by the employer to provide a written contract within the statutory period creates a legal presumption under Article 9 inciso 4 that the contractual conditions are those stated by the worker, placing the burden of proof on the employer. The Dirección del Trabajo (DT) — Chile's labour inspection authority — enforces this requirement through workplace inspections and may impose fines of one to five Unidades Tributarias Mensuales (UTM, approximately CLP 66,000–68,000 each in 2025) for non-compliance under Article 506 of the Código del Trabajo.

The Contrato de Trabajo Indefinido is the default and most protective form of employment in Chile. Under Article 159 No. 4 of the Código del Trabajo, fixed-term contracts that are renewed a second time automatically convert to indefinite contracts — and any worker who continues providing services after the expiration of a fixed-term contract is deemed to hold an indefinite contract by operation of law. The Juzgados de Letras del Trabajo exercise exclusive first-instance jurisdiction over labour disputes, with oral proceedings (procedimiento de aplicación general) governed by Articles 425–459 of the Código del Trabajo, and the Cortes de Apelaciones hearing appeals through the recurso de nulidad.

Chile's employment framework operates within a unitary legal system — unlike federal countries, there are no separate state or provincial labour codes. The Código del Trabajo applies uniformly across all 16 regions, from the Región de Arica y Parinacota to the Región de Magallanes y la Antártica Chilena. The Corte Suprema de Justicia, through its Labour Chamber (Sala Laboral), issues binding unification rulings (recurso de unificación de jurisprudencia) under Article 483 of the Código del Trabajo that standardize interpretation of employment law nationwide.

All employers must register workers with the social security system before the first day of work, filing the corresponding declarations with the AFP (pension fund administrator) chosen by the worker, the FONASA public health insurer or the worker's selected ISAPRE private health insurer, and the Administradora de Fondos de Cesantía (AFC) for unemployment insurance. The Superintendencia de Pensiones supervises AFP compliance, while the Superintendencia de Salud oversees ISAPRE obligations. Employer contributions are calculated on the worker's taxable remuneration (remuneración imponible) subject to the monthly ceiling of 81.6 UF for pension and health, and 122.6 UF for the AFC unemployment insurance cap.

An Indefinite Employment Contract Chile is required whenever a Chilean employer engages a worker in an ongoing employment relationship forming part of the company's regular, permanent activities. Article 7 of the Código del Trabajo establishes that the employment relationship arises from the provision of personal services under dependency and subordination — and Article 8 creates a legal presumption of employment whenever these elements are present, regardless of how the parties have characterized the arrangement.

A Contrato de Trabajo Indefinido is needed when any Chilean entity — whether a Sociedad por Acciones (SpA) formed under Articles 424–446 of the Código de Comercio, a Sociedad de Responsabilidad Limitada (SRL) under Ley 3.918, a Sociedad Anónima (SA) under Ley 18.046, or an Empresa Individual de Responsabilidad Limitada (EIRL) under Ley 19.857 — hires workers for positions that are not tied to a specific project with a defined completion date. Under Article 159 No. 4, fixed-term contracts may not exceed one year (two years for managers, professionals with a university degree, and technical specialists), and any second renewal automatically converts the relationship to indefinite.

The contract is needed when a worker transitions from a fixed-term arrangement to permanent employment — Article 159 No. 4 of the Código del Trabajo mandates that the employer issue a new indefinite contract or an annexo (addendum) documenting the change. The Dirección del Trabajo may inspect employer records and demand production of written contracts under Article 505 — employers who cannot produce written indefinite contracts face the adverse presumption of Article 9 inciso 4.

A Contrato de Trabajo Indefinido is required for all social security registration purposes: the employer must register the worker with the corresponding AFP pension fund (DL 3.500 Art. 17), FONASA or the worker's chosen ISAPRE (Ley 18.469 Art. 1; Ley 18.933), and the AFC unemployment insurance fund (Ley 19.728 Art. 2) — and the written employment contract specifying the agreed remuneration is the foundational document for calculating monthly social security contributions.

Under the Ley de las 40 Horas (Ley 21.561 of 2024), all indefinite employment contracts must reflect the progressive reduction of the standard work week from 45 hours to 40 hours, phased over five years beginning in 2024. Employers must amend existing contracts or issue addenda to reflect each reduction stage, and the Dirección del Trabajo has issued administrative guidance (Dictámenes) clarifying implementation obligations.

Foreign workers in Chile require an indefinite employment contract as a supporting document for visa applications processed by the Departamento de Extranjería y Migración under the Ley de Migración y Extranjería (Ley 21.325 of 2021). The employment contract must be signed before a Notario Público and legalized through the Ministerio de Relaciones Exteriores for workers applying from abroad.

A valid Indefinite Employment Contract Chile under the Código del Trabajo must contain the essential elements specified in Article 10 to be enforceable and to meet the Dirección del Trabajo inspection requirements.

Party Identification: Full legal name, RUT (Rol Único Tributario assigned by the SII), cédula de identidad number (issued by the Servicio de Registro Civil e Identificación), date of birth, nationality, and domicile of both the employer and worker. Where the employer is a legal entity, the company's RUT, registered name, Registro de Comercio inscription details, and the name and identification of the legal representative signing with power of attorney (mandato) must be included. Article 10 No. 1 of the Código del Trabajo mandates this identification.

Place and Date of Contract: The city and date where the contract is signed, required by Article 10 No. 2 of the Código del Trabajo. The contract must be signed within fifteen days of the worker beginning services (five days for shorter contracts) under Article 9.

Nature of Services: A precise description of the work to be performed (naturaleza de los servicios) and the place or city where they will be provided, as required by Article 10 No. 3. The Corte Suprema has emphasized through unification rulings that vague job descriptions can expand the employer's obligations — specificity protects both parties.

Remuneration: The agreed remuneration (remuneración) and its payment period, which may not exceed one month under Article 10 No. 4. The remuneration must meet or exceed the Ingreso Mínimo Mensual (IMM) — the monthly minimum wage set annually by law, currently CLP 500,000 for workers aged 18–65 (2025). Article 41 of the Código del Trabajo defines remuneration to include base salary (sueldo base), overtime pay (sobresueldo), commissions (comisiones), profit-sharing (participación), and gratificación legal.

Working Hours: The duration and distribution of the work week (jornada de trabajo) under Article 10 No. 5. The standard maximum is 45 hours per week under Article 22, distributed across no more than six and no fewer than five days, being progressively reduced to 40 hours under Ley 21.561 of 2024. Daily hours may not exceed 10 including overtime under Article 28. Workers excluded from hour limits include managers, supervisors, and those working without immediate superior oversight under Article 22 inciso 2.

Contract Duration: Explicit statement that the contract is indefinite (por tiempo indefinido) under Article 10 No. 6. The Código del Trabajo distinguishes indefinite contracts from fixed-term (plazo fijo, Article 159 No. 4) and specific-work contracts (obra o faena, Article 159 No. 5).

Mandatory Benefits: Reference to all legally required benefits — feriado anual (annual leave) of 15 working days after one year of service under Article 67, increasing to 20 days for workers in Regions XI, XII, and Provincia de Palena under Article 68; gratificación legal (profit-sharing) of at least 25% of annual remuneration when the employer generates profits, capped at 4.75 IMM under Articles 47–52; aguinaldos (Christmas and September bonuses) for public sector workers; and indemnización por años de servicio (severance pay) of one month's last remuneration per year of service (capped at 11 years/330 days) for unjustified dismissal under Article 163.

Social Security: Identification of the worker's AFP pension fund administrator (DL 3.500), FONASA or ISAPRE health insurer, and AFC unemployment insurance coverage. The employer's mandatory contributions include: 10% of taxable remuneration to the worker's AFP individual account (plus AFP commission), 7% to FONASA or ISAPRE for health, employer AFC contribution of 2.4% of taxable remuneration to the worker's individual unemployment account, and occupational accident insurance under Ley 16.744 (0.93% base rate plus additional risk premium depending on the industry classification assigned by the mutual society — ACHS, IST, or Mutual de Seguridad).

Termination Provisions: Reference to the termination causes listed in Articles 159 (mutual agreement, worker resignation, death, expiry of fixed term, completion of work, force majeure), 160 (dismissal for cause — serious misconduct, abandonment, dishonesty, violence, immoral conduct, negligent damage), and 161 (employer needs — business necessity or desahucio for managers). Article 162 requires written notice delivered personally or by certified mail (carta certificada) at least 30 days before the effective termination date, or payment of indemnización sustitutiva del aviso previo (one month's salary in lieu of notice).

Forms-legal.com provides this Indefinite Employment Contract Chile template as a practical starting point for documenting the employment relationship. Every employment contract should be reviewed by a licensed Abogado to confirm compliance with the Código del Trabajo, applicable Dictámenes of the Dirección del Trabajo, and the specific circumstances of the employment relationship. Los usuarios de forms-legal.com pueden descargar este documento de forma gratuita en formato PDF o DOCX, completar los campos del formulario guiado y obtener un documento listo para firma.