Project Employment Does Not Arise Where the Employee Performed Work that is Necessary and Indispensable to Usual Trade or Business of Employer
Project employment exists where the 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. (See page 276, citing Art. 295, Labor Code of the Philippines, Atty. Elvin B. Villanueva)
The principal test for determining whether particular employees are properly characterized as “project[-based] employees” as distinguished from “regular employees,” is whether or not the employees were assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified at the time they were engaged for that project. The project could either be (1) 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 undertakings of the company; or (2) a particular job or undertaking that is not within the regular business of the corporation. In order to safeguard the rights of workers against the arbitrary use of the word “project” to prevent employees from attaining a 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. (See page 276, Labor Code of the Philippines, Atty. Elvin B. Villanueva, citing Gadia vs. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015.)
In the case of Pacific Metals Co., Ltd. Vs. Tamayo, (G.R. No. 226920, December 5, 2019) Tamayo’s first engagement was covered by a duly executed Service Contract, specifying the project for which he was hired 
and its two-month duration.
The controversy hinges on Tamayo’s subsequent employment or his re-hiring and assignment as exploration manager for the ERAMEN/PAMCO Exploration Project. This engagement was not covered by any employment contract.
According to the SC, the lack of employment contract would not hinder the determination of the status of Tamayo’s employment. For while the appropriate evidence showing that a person is a project employee pertains to the employment contract specifying the project and its duration; the existence of such contract is not always conclusive of the nature of one’s employment.
In connection with Tamayo’s subsequent engagement for the ERAMEN/PAMCO Exploration Project, he rendered services therefor from January 2011 until December 2011 when he got terminated due to alleged project completion.
That the exploration project was allegedly already complete does not suffice to convince that indeed the project had reached its conclusion. For no proof was adduced to substantiate this allegation.
Based on Article 295 of the Labor Code, one is deemed regular employee if one: a) had been engaged to perform tasks which are usually necessary or desirable in the usual business or trade of the employer, unless the employment is one for a specific project or undertaking or where the work is seasonal and for the duration of a season; or b) has rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity for which he is employed and his employment continues for as long as such activity exists.
It is thus, undeniable that Tamayo is a regular employee of PAMCO, for he performs work that is usually necessary and desirable to its business. Verily, the mere fact that employees worked on projects that were time-bound did not automatically characterize them as project employees.
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Although PAMCO persistently claims that Tamayo was only re-hire for two (2) more months following the expiration of his first two-month contract with the company, records bear that Tamayo rendered service much longer than two (2) months. He was made to stay for a year for the work her rendered was in fact necessary and indispensable to PAMCO’s usual trade or business.
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