Workers naturally prefer to be accorded regular status, due to the greater protection and benefits resultant therefrom. Still, the delineation between the two types of employment hardly remains fixed. Issues regarding the true nature of employment and how and when project-based employees may be regularized abound in such work relations.

Considering the conflicting interpretations, as well as the diversity of the Court’s previous rulings on such matters, the fairly recent case of Carpio v. Modair Manila Co. Ltd. Inc. (G.R. 239622, 21 June 2021) presented an opportunity for the Supreme Court to closely scrutinize the body of pertinent jurisprudence and synthesize guiding principles on these two kinds of employment.

My discussion on project-based employees will be divided into three parts: first, basic differences between regular and project employment; second, two strands of jurisprudence relating to project employment; and third, principles for the guidance of employers who intend to engage or have already engaged project-based employees.

As characterized, regular employment exists when the employee is (a) engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer or (b) a casual employee whose activities are not usually necessary or desirable in the employer’s usual business or trade and has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed; while project employment exists when the employee is hired under a contract which specifies that the employment will last only for a specific project or undertaking, the completion or termination of which is determined at the time of engagement. (Freyssinet Filipinas Corp. v. Lapuz, G.R. 226722, 18 March 2019)

As regards security of tenure, regular employment may be terminated for just or authorized causes, whereas, for project employment, lawful dismissal is brought about by the completion of the project or contract for which the employee was engaged, unless terminated during the life of the project, in which case, only just or authorized causes may be invoked. (DOLE D.O. 174-15; Rule XXIII, Section 1 (c) of the Omnibus Rules to Implement the Labor Code;)

Regarding payment of back wages in cases of illegal dismissal, for regular employment, back wages are computed from the time of dismissal until reinstatement, if such is ordered, or until the finality of the decision ordering separation pay, if reinstatement is infeasible, while for project employment, back wages are computed from the date of termination of employment until the actual completion of the work. (Aro v. National Labor Relations Commission, G.R. 174792, 7 March 2012; Bani Rural Bank Inc. v. De Guzman, G.R. 170904, 13 November 2013)

I must caution you, however, that upon the employer lies the burden of proof to establish project employment by showing that: (1) the employee was assigned to carry out a specific project or undertaking; and (2) the duration and scope of which were specified at the time the employee was engaged for such project.

Moreover, the employer must also prove that there was indeed a project undertaken. Failing these, the worker will be presumed a regular employee. (Dacles v. Millenium Erectors Corp., G.R. 209822, 8 July 2015; Omni Hauling Services Inc. v. Bon, G.R. 199388, 3 September 2014; Quebral v. Angbus Construction Inc., G.R. 221897, 7 November 2016)

In the second part of my discussion, we will discuss the cases decided by the Supreme Court where project employees were deemed regular from the beginning of their employment and project employees whose employment merely ripened into regular employment. More importantly, we will identify the parameters which made the Supreme Court uphold and recognize the legitimacy of project-based arrangements of employers with their employees.

(To be continued)

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