Project employees entitled to 13th month pay, not separation pay

Dear Atty. Angela,

I worked as a project-based system engineer for two years for a construction company where I signed a project employment contract. The project contract executed between me and the company is about to expire, and there is no guarantee where I will be working after this. The company has never given me any 13th month pay, which I believe I should be entitled to. Since I have already worked for two years, am I also entitled to a separation pay? This will help me financially while I look for new employment.

Edgar

***

Dear Edgar,

The Labor Code defines the term project employees as: “Art. 280. 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 period 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.”

In Dacuital vs L.M. Camus Engineering Corp., the Court stressed that a project employee is assigned to a project that starts and ends at a determined or determinable time. It is quite clear from your narration that your employment was for a specific period of time only, corresponding to the completion of a project, and as such, you are considered as a project employee. Project employees, due to the nature of their employment, are not entitled to separation pay because their employment was terminated due to the completion of the project where they had been engaged. The employer has no obligation to pay separation pay under this arrangement.

With respect to your claim for 13th month pay, you are rightfully entitled to this. Notwithstanding your employment as project-based employee, pursuant to Department Advisory 02-12,
“Rank-and-file employees in the private sector shall be entitled to 13th month pay regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year.”

Thus, despite not being able to claim separation pay as a former project-based employee, you must demand your 13th month pay being entitled to this under the law.

Atty. Angela Antonio


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