In accordance with the provisions of Article 46 of the Substantive Labor Code, it can be interpreted that it is entirely possible to agree on the extension and its conditions at the time of entering into a fixed-term employment contract. In this regard, the provision establishes that the contract will be automatically extended for the initially agreed term if the parties do not express their intention to terminate it within 30 days prior to the expiration of the term.
In light of the foregoing, case law determines that the conditions of the duration clause of a contract will always derive from what the parties have agreed, as the utmost expression of their will, provided that such agreement does not contravene the provisions of labor legislation. Additionally, it should be noted that the fact of agreeing on the extension period at the beginning of the employment contract does not mean that the sum of both periods will constitute the total duration of the contract.
By way of example, if a fixed-term contract is entered into for 3 years, and at that same time an extension for 2 years is agreed upon, it is not possible to understand that the contract will have a duration of 5 years. The duration of the contract will be 3 years, since there will be no obligation to extend it for the agreed 2 years, provided that the parties express their intention to terminate it within 30 days prior to the expiration of the term.