Not all types of work or project require a full-time employee. Many companies consider hiring project-based employees because of the latter’s specialized skills and expertise needed for a short duration of time, usually coinciding with the length of the particular undertaking. Thus, cost efficiency and job-skills matching are achieved under such set up.
Under Article 295 (previously, Article 280) of the Labor Code, a project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee. Generally, the services of project-based employees are coterminus with the project and may be terminated upon the end or completion of the project or a phase thereof for which they were hired.
The distinction between project-based employees and regular employees lies on whether they were assigned to carry out a specific project or undertaking, the duration and scope of which was specified at, and made known to them, at the time of their engagement. Hence, it is crucial that the employees were informed of their status as project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the parties. There must have been no force, duress, or improper pressure upon the employees or any other circumstances vitiating their consent (Jamias vs National Labor Relations Commission, GR 159350, 9 March 2016).
To safeguard the rights of workers against the arbitrary use of the word “project” to prevent employees from attaining regular status, employers claiming that their workers are project-based employees should not only prove that the duration and scope of the employment was specified at the time they were engaged, but also, that there was indeed a project (Dacles vs Millennium Erectors Corporation, GR 209822, 8 July 2015).
The term “project” could refer to either a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertaking of the company. This undertaking has a determined or determinable beginning or ending date, such as a particular construction project of a construction company. “Project” could also refer to a particular job or undertaking not within the regular business of the corporation. Hence, project-based employees may or may not be performing tasks usually necessary or desirable in the usual business or trade of the employer (ALU-TUCP vs National Labor Relations Commission, GR 109902, 2 August 1994).
In the 2018 case of Bajaro vs Metro Stonerich Corp. (GR 227982, 23 April 2018), Bajaro was hired by Metro Stonerich as a concrete pump operator on one of the latter’s construction projects.
While working at the site, Bajaro got injured, but Metro Stonerich refused to pay for his medical expenses. Upon returning to work after treatment, he was informed that he should no longer report for work. Bajaro filed a complaint before the Labor Arbiter (LA) for illegal dismissal with monetary claims, asserting that he was a regular employee for having been continuously employed for six years, and for performing activities that were necessary and desirable to the company’s business.
The Supreme Court ruled that Bajaro is a project-based employee whose services may be terminated at the end of the project period. While Bajaro had been employed for six years by the company, every time Bajaro was hired as a concrete pump operator, he was made to sign a Kasunduan Para Sa Katungkulang Serbisyo (Pamproyekto). This indicated that Bajaro was adequately apprised of his employment status, and was sufficiently informed that his employment will last only until the completion of each construction project.
Pursuant to Department Order 19, Series of 1993, or the Guidelines Governing the Employment of Workers in the Construction Industry, Metro Stonerich also duly submitted the required Establishment Employment to the Department of Labor and Employment for the reduction of its workforce. Bajaro was included among the 10 workers reported for termination as a consequence of the completion of the construction project. The submission of the said Establishment Employment Report is a clear indication of project employment.
Further, the repeated and successive rehiring of project-based employees does not automatically convert them to regular employees. Length of service through rehiring is not the controlling factor but rather whether the employment has been fixed for a specific project or undertaking, with its completion having been determined at the start of the engagement.