Project-based employee v. Regular employee

Article 294[1] of the Labor Code,[2] as amended, distinguishes a project-based employee from a regular employee as follows:
Art. 294. Regular and casual employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

x x x x (Emphasis and underscoring supplied)
Thus, for an employee to be considered project-based, the employer must show that: 

(a) the employee was assigned to carry out a specific project or undertaking; and
(b) the duration and scope of which were specified at the time the employee was engaged for such project.[3] 

Being assigned to a project or a phase thereof which begins and ends at determined or determinable times, the services of project employees may be lawfully terminated at the completion of such project or phase.[4] Consequently, in order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent them from attaining regular status, employers claiming that their workers are project employees should prove that: 

(a) the duration and scope of the employment was specified at the time they were engaged; and
(b) there was indeed a project.[5]


[1] Formerly Article 280. As renumbered pursuant to Section 5 of Republic Act No. 10151, entitled "AN ACT ALLOWING THE EMPLOYMENT OF NIGHT WORKERS, THEREBY REPEALING ARTICLES 130 AND 131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-TWO, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES" (approved on June 21, 2011).

[2] Presidential Decree No. 442 entitled "A DECREE INSTITUTING A LABOR CODE THEREBY REVISING AND CONSOLIDATING LABOR AND SOCIAL LAWS TO AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT AND HUMAN RESOURCES DEVELOPMENT AND INSURE INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE" (approved on May 1, 1974).

[3] See Gadia v. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015.

[4] See Omni Hauling Services, Inc. v. Bon, G. R. No. 199388, September 3, 2014, 734 SCRA 270, 277-282. See also Section I (c), Rule XXIII (Termination of Employment), Book V of the Omnibus Rules Implementing the Labor Code [as amended by DOLE Department Order No. 9, Series of 1997], which govern termination of project employees states:

Section I. Security of tenure. - x x x.

x x x x

(c) In cases of project employment or employment covered by legitimate contracting or sub-contracting arrangements, no employee shall be dismissed prior to the completion of the project or phase thereof for which the employee was engaged, or prior to the expiration of the contract between the principal and contractor, unless the dismissal is for just or authorized cause subject to the requirements of due process or prior notice, or is brought about by the completion of the phase of the project or contract for which the employee was engaged.

[5] See Gadia v. Sykes Asia, Inc., supra note 33, citing Omni Hauling Services, Inc. v. Bon, supra note 4.

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