Contract jobs

Dear Atty. Vlad,

I own a small construction company and my employees are project-based. Last May 2025, my project ended. I have 20 project-based employees who worked in that project. After 10 days, I submitted a Termination Report to the Department of Labor and Employment (DoLE) and paid my workers their completion bonus. By July of this year, I will have another project but I will only be requiring 10 workers since the project is relatively smaller. All 20 employees are hoping that I can include them in the new project. Will there be any consequence if I only choose 10 out of those 20 I previously engaged?

Aldrich

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Dear Aldrich,

From the facts that you shared to me, it appears that have submitted a Termination Report to DoLE and paid your workers their completion bonus. Hence, even if you only choose 10 out of the 20 individuals you previously engaged in your last project, the same is still valid. Project Employment is recognized under Philippine laws and decisions of the Supreme Court.

In the case of Isabelo Violeta, et al. vs National Labor Relations Commission, et al., (G.R. No. 119523, 10 October 1997), the Court ruled:

“The principal test for determining whether particular employees are properly characterized as ‘project employees,’ as distinguished from ‘regular employees,’ is whether or not the ‘project employees’ were assigned to carry out a ‘specific project or undertaking,’ the duration (and scope) of which were specified at the time the employees were engaged for that project. As defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee.”

Further, either one or more of the following circumstances among others, may be indicators that an employee is a project employee (Section 2.2, D.O. 19-93):

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and waiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DoLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed from on employees’ terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies.

The pro-rata completion bonus may be based on the industry practice which is at least the employee’s one-half (1) month salary for every 12 month service (Section 2.3(a), D.O. 19-93). When there is no undertaking to pay completion bonus, the employee may be considered a non-project employee (Section 3.4 (a), D.O. 19-93).

Since you have followed some of the guidelines provided for by law, even if you will not be able to hire all of your previously hired employees in your last project, they cannot sue you for illegal dismissal. Their employment ended the moment your last project was completed in May of this year. With respect to your employees who will be hired for your project this July 2025, it will be a new employment for them and said employment will end again when your next project will be completed.

Further, please be careful not to assign your employees simultaneously in two or more projects as this will destroy the nature of their being project employees. In such case, they will now become members of the work pool entitled to security of tenure. This means that their employment may not be dismissed except for just or authorized cause under the Labor Code, as amended.

I hope that I was able to help you based on what you have shared to me.

Atty. Vlad del Rosario