November 30, 2022 @ 3:39 PM 2 months ago

WHO is a project (or project-based) employee?

A project employee is one whose employment has been fixed for a specific project, or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee. (Herma Shipyard, Inc. vs. Danilo Oliveros, April 17, 2017) “A project employee is assigned to a project which begins and ends at determined or determinable times.”

The services of project-based employees are co-terminous with the project or phase which they were hired. Meaning to say, the employees may be terminated when the project (or phase thereof) ends or is completed.


The principal tests for project employment are: (1) whether one is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time of engagement for a project, (2) duration of work to be performed must be defined in the employment contract; and (3) terms and conditions of employment must be made clear to the employee at the time of hiring. (Leyte Geothermal Power Progressive Employees Union-ALU-TUCP vs. Philippine National Oil Company-Energy Development Corporation, March 30, 2011)

Simply put, for an employment to be regarded as project-based, it is incumbent upon the employer to prove the following: (1) the employee was hired to carry out a specific project or undertaking; (2) and the employee was notified of the duration and scope of the project. (Gadia vs. Sykes Asia, Inc., January 28, 2015)


The “projects” wherein the project employee is hired may consist of “(i) a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (ii) a particular job or undertaking that is not within the regular business of the corporation. (Gadia vs. Sykes Asia, Inc., January 28, 2015)

It is not uncommon for a construction firm to hire project employees to perform work necessary and vital for its business. In view of the distinct nature of the construction industry, the Supreme Court recognizes the right of an employer to hire a construction worker for a specific project, provided that the latter is sufficiently apprised of the duration and scope of such undertaking. (Bajaro vs. Metro Stonerich Corp., April 23, 2018)



Notably, in the case of Caseres vs. Universal Robina Sugar Milling Corporation (September 28, 2007), it was held that “the repeated and successive rehiring of project employees do not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee.”

In another case, the Supreme Court took judicial notice of the fact that “in the construction industry, a project employee’s work depends on the availability of projects, necessarily the duration of his employment. It is not permanent but coterminous with the work to which he is assigned.” It further stated that “[I]t would be extremely burdensome for the employer, who depends on the availability of projects, to carry him as a permanent employee and pay him wages even if there are no projects for him to work on… To do so would make the employee a privileged retainer who collects payment from his employer for work not done. This is extremely unfair to the employers and amounts to labor coddling at the expense of management.” (Malicdem vs. Marulas Industrial Corporation, February 26, 2014)


While no prior notice of termination is required if the termination is brought about by completion of the project or phase thereof for which the worker has been engaged (because completion of the work or project automatically terminates the employment), the employer is, under the law, obliged to render a report to the DOLE on the termination of the employment.

Implied in Department Order No. 19 of the DOLE is the submission of a Monthly Report of Employees’ Terminations to the DOLE-Regional Office. Submission of such reports is listed as one of the indicators of project employment under Sec. 2.2(e) of the Order. (Cioco, Jr. vs. C.E. Construction Corporation and/or Johnny Tan, September 8, 2004)