3. Project (DO 19, s. 1993)

Project

A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the Er. In either case, the project must be distinct, separate, and identifiable from the main business of the Er, and its duration must be determined or determinable. (PAL v. NLRC, G.R. No. 125792, 09 Nov. 1998)

Project Employment

Project employment is employment that has been fixed for:

• Specific undertaking – a specific project or undertaking the completion; or
• Time-bound – termination of which has been determined at the time of engagement of the Ee. (Sec. 5(a), Book VI, Rule I, IRR)

The period is not the determining factor, so that even if the period is more than one (1) year, the Ee does not necessarily become regular.

NOTE: Where the employment of a project Ee is extended long after the supposed project has been finished, the Ees are removed from the scope of project Ees and considered as regular Ees.

Repeated hiring on a project-to-project basis does not, by itself, make the Ee regular. Continuous rehiring and the nature of the work may show that the Ee’s services have become necessary and desirable to the business of the Er, warranting regular status. (Maraguinot v. NLRC, G.R. No. 120969, 22 July 1998)

Q: In a case for illegal dismissal, the issue is whether the respondents were regular Ees and were illegally dismissed. The respondents were continuously hired by the company and assigned to different projects from the beginning of their employment in 1990 until their termination in 1993. They also claimed that they were not limited to performing work as cement cutters, but they also cleaned canals and pipes, fixed tools, and other related work at the company. Are the respondents regular Ees?

A: YES. The principal test in determining whether an Ee is a project Ee is whether he/she is assigned to carry out a "specific project or undertaking," the duration and scope of which are specified at the time the Ee is engaged in the project, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. A true project Ee should be assigned to a project which begins and ends at determined or determinable times and be informed thereof at the time of hiring.

Clearly, the presentation of service contracts between the Er and their client (even if it shows the duration of the project), in lieu of the Ees' individual employment contracts, does not establish that the latter are project Ees. There was no other substantial evidence offered to prove that respondents were informed at the time of their hiring, that they were project Ees. Moreover, petitioner's failure to file termination reports at the end of each project was an indication that respondents were regular Ees. (Jovero v. Cerio et al.., G.R. No. 202466, June 23, 2021, as penned by J. Hernando)

Q: Herma Shipyard, Inc., (HERMA) is engaged in the business of shipbuilding and repair. Several of its Ees occupy various positions. In support of their employment is a contract of employment denominated as Kasunduang Paglilingkod, which classifies them as a project-based Ee only. The Ees were informed at the time of their engagement that their status is only a project Ee and their duration of specific project or undertaking.

However, under Paragraph 10 of their employment contract, it allows the extension of the Ees’ employment until the completion of the specific work. Is the extension agreement under the employment contract violation of the second requisite of project employment that the completion or termination of such project or undertaking be determined at the time of engagement?

A: NO. It is enough that Herma Shipyard gave the approximate or target completion date in the project employment contract. Given the nature of its business and the scope of its projects which take months or even years to finish, Herma Shipyard cannot be expected to give a definite and exact completion date. It can only approximate or estimate the completion date. What is important is that the Ees were apprised at the time of their engagement that their employment is coterminous with the specific project and the purpose of the extension is only to complete the same specific project, and not to keep them employed even after the completion thereof. (Herma Shipyard Inc. v. Oliveros et al., G.R. No. 208936, 17 Apr. 2017)

Requisites in Determining Whether an Ee is a Project Ee

• A designation as a “Project Ee” may be considered as evidence, but is not itself a requisite or conclusive proof of project employment; the actual terms and circumstances control (Labor Code, Art. 295 [280]; DOLE Department Order No. 19, s. 1993);
• The project Ee was assigned to carry out a specific project or undertaking;
• The duration and scope of which were specified at the time the Ee was engaged for that project (Imbuido v. NLRC, G.R. No. 114734, 31 May 2000);
• The Ee’s history of engagements, including whether the Ee was dismissed after completion of a project or phase, is evidence to consider, not a stand-alone requisite (Maraguinot v. NLRC, G.R. No. 120969, July 22, 1998); and
• The employer should report termination upon completion of a construction project or phase. Filing or nonfiling of the report is evidence to consider, not by itself dispositive of project-employee status. (DOLE Department Order No. 19, s. 1993)

Ees in the Construction Industry

Two types of Ees in the construction industry:

• Project Ees - those employed in connection with a particular construction project or phase; and
• Non-project Ees - those employed by a construction company without reference to a particular project.

NOTE: In the case of Exodus International Construction Corporation v. Guillermo Biscocho, et al., (G.R. No. 166109, 23 Feb 2011), when one project is completed, Ees were automatically transferred to the next project. There was no employment agreement given to the Ees which clearly spelled out the duration of their employment, the specific work to be performed and that such is made clear to them at the time of hiring. As such, they are regular Ees falling under the classification of non-project Ees.

“Day certain” rule

A project employee’s engagement may end upon completion of the identified project or phase—a “day certain” in the sense of an event that will occur, although its exact calendar date is not known at engagement.

Q: Diosdado, a carpenter, was hired by Building Industries Corporation (BIC), and assigned to build a small house in Alabang. His contract of employment specifically referred to him as a "project Ee," although it did not provide any particular date of completion of the project. Is the completion of the house a valid cause for the termination of Diosdado’s employment? (2009 BAR)

A: YES. The completion of the house should be a valid cause for termination of Diosdado’s employment, although the employment contract may not state a particular date.

However, if it did not specify that the termination of the parties’ employment relationship was to be on a “day certain”—the day when the phase of work would be completed—the Ee can be considered to have been a regular Ee. (Filipinas Pre-Fabricated Building Systems, v. Puente, G.R. No. 153832, 18 Mar. 2005)

NOTE: Under DOLE D.O. No. 19, Series of 1993, the Er is required to report to the relevant DOLE Regional Office the fact of termination of project Ees as a result of the completion of the project or any phase thereof in which one is employed.