Today, we will conclude our three-part discussion on project-based employment by enumerating the principles that will guide employers and employees alike on the true nature of one’s employment.

These principles were articulated by the Supreme Court in the case of Carpio v. Modair Manila Co. Ltd. Inc. (G.R. No. 239622, 21 June 2021).

First, a worker is presumed to be a regular employee unless the employer establishes that (1) the employee was hired under a contract specifying that the employment will last for only a specific undertaking, the termination of which is determined at the time of engagement; (2) there was indeed a project undertaken; and (3) the parties bargained on equal terms, with no vices of consent.

Second, if an employee is considered a regular employee at the outset, security of tenure already attaches, and the subsequent execution of project employment contracts cannot undermine such security but will simply be considered a continuation of the regular engagement of such an employee.

Third, even if initially engaged as a project employee, such nature of employment may ripen into regular status if (1) there is a continuous rehiring of project employees even after cessation of a project; and (2) the tasks performed by the alleged "project employee" are vital, necessary and indispensable to the usual business or trade of the employer.

Conversely, project-based employment will not ripen into regularity if the construction worker is truly engaged as a project-based employee and the employer manifested no intent to treat the worker as a continuing resource for the main business between each successive project.

Fourth, regularized project workers are subject to the "no work, no pay" principle, such that the employer is not obligated to pay them a salary when "on leave." In case of an oversupply of regularized workers, then the employer can exercise the management prerogative to decide whom to engage for the limited projects and whom to consider as still "on leave."

Finally, submission of termination reports to the DoLE Field Office manifesting the termination of the projects and the consequent dismissal of project-based employees "may be considered" only as an indicator of project employment; conversely, non-submission does not automatically grant regular status. Such circumstances do not determine the nature of employment by themselves.

In the case of Carpio, applying the principles just laid down, the Court found that the subject employee was a regular employee of Modair from his engagement in 1998 until the completion of his supposed last project in 2013.

The Court noted that while Modair managed to present project employment contracts covering the tail-end of Carpio's engagement, still, Carpio's successive service as Electrician 3 in numerous construction projects manifested the vitality and indispensability of his work to the construction business of Modair.

Very revealing also were the terms of Modair's Memoranda, which stated that Carpio would be "notified accordingly for re-contract if [his] services will again be needed." Such language discloses Modair's continuing reliance on Carpio's services, for which he would naturally make himself available at Modair's disposal. In sum, if it were project-based at the outset, Carpio's engagement had already ripened to regular status.

Nevertheless, while the Court accorded Carpio regular employment status, the Court found that he was not illegally dismissed. The point of reference for Carpio's cause of action for illegal dismissal was his supposed last project. Following the completion thereof, Carpio claimed that Modair no longer provided him with any work despite numerous pending construction projects.

However, Modair's Deputy General Manager established that, after Carpio's last project, Modair's ongoing projects had no need for an electrician and that even when Carpio was offered a project in Palawan, he declined owing to the distance from his family. Essentially, being a regular employee in the construction industry, Carpio was "on leave" during such time.

That concludes our discussion on project-based and regular employment. I sincerely hope that imparting my knowledge on these topics will allow your businesses to grow and flourish. These innovative ideas will allow you to quickly adapt to the ever-evolving industry your business may belong to.