Specification of the Project Must Better Seen in Project Employment Contract

Under Article 295 of the Labor Code, as amended, an employment is deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.

The “project” for the carrying out of which “project employees” are hired would ordinarily have some relationship to the usual business of the employer. (Toyo Seat Philippines Corporation vs. Velasco, G.R. No. 240774, March 03, 2021)

Exceptionally, the “project” undertaking might not have an ordinary or normal relationship to the usual business of the employer. According to the Supreme Court (SC), in this latter case, the determination of the scope and parameters of the “project” becomes fairly easy. (Citing ALU-TUCP vs. National Labor Relations Commission, 304 Phil. 844 (1994).)

For the SC, it is unusual (but still conceivable) for a company to undertake a project which has absolutely no relationship to the usual business of the company; thus, for instance, it would be an unusual steel-making company which would undertake the breeding and production of fish or the cultivation of vegetables.

There should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the production of vegetables as “project employees,” as distinguished from ordinary or “regular employees,” so long as the duration and scope of the project were determined or specified at the time of engagement of the “project employees.” For, as is evident from the provisions of Article 280 [now 295] of the Labor Code, quoted earlier, 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.

The term “project” could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.

The ALU-TUCP ruling has since become entrenched in our jurisprudence.40 Accordingly, workers may be considered project employees regardless of the nature of the work they perform, as long as the essential elements of project employment are alleged and proven, i.e., 1) that they were hired for a specific project or undertaking; and 2) the completion or termination of the project or undertaking for which they were hired has been determined at the time of their engagement.

Project employment is further regulated by DOLE Department Order No. 19, Series of 1993 (DO 19-1993).

Avoid the pitfalls of technicality in crafting your project employment contract. See our partial template below as your guide or get the full version here.

CONTRACT FOR PROJECT EMPLOYMENT

KNOW ALL MEN BY THESE PRESENTS:

         This CONTRACT FOR PROJECT EMPLOYMENT is entered into by and between

         XYZ Corporation, a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines with principal place of business at 123 Bldg., Ayala Ave., Makati City, Philippines, represented herein by its President, MR. ____________________, hereinafter known as COMPANY,

-and-

1. ________________________, of legal age, and a resident of _____________________________________________, hereinafter called the PROJECT EMPLOYEE,

WITNESSETH THAT:

WHEREAS, the COMPANY is in need PROJECT EMPLOYEE who will start out as a PROJECT EMPLOYEE;

WHEREAS, the PROJECT EMPLOYEE offered his services to the COMPANY to finish a particular project;

WHEREAS, the agreement shall be on purely project employment relationship where the COMPANY has no control as to the means and methods by which the PROJECT EMPLOYEE performs his work, except as to the results thereof;

THEREFORE, the parties hereby covenant that:

COMMENCEMENT PROJECT EMPLOYMENT

1. The PROJECT EMPLOYEE is engaged for a particular project the scope and duration of which is known to him at the time of engagement;

2. The PROJECT EMPLOYEE shall perform xxx;

3. The PROJECT EMPLOYEE shall be paid the xxxx services ___________________ PESOS (PhP______.00) per month;

THE PROJECT

4. The PROJECT EMPLOYEE shall act as ___________________ for the project known as ___________________________________;

5. The expected completion date of the project is on ______________ after which this agreement shall automatically terminate;

6. As PROJECT EMPLOYEE, he shall perform the responsibilities a list of which is hereto attached as Annex “A”;

7. If the project extends xxxxxxx;

8. The fact of the duration of the project has been made known to xxxxx;

9. During the course of employment the employee shall render full-time service and shall not engage in any moonlighting xxxx.

COMPLETION BONUS

10. Once the project xxx

VOLUNTARY SIGNING OF THIS AGREEMENT

11. The parties have agreed xxx;

12. The PROJECT EMPLOYEE was aware that he had the option of not signing xxx;

CONSENT UNDER DATA PRIVACY LAW

13. By providing personal information and sensitive personal information, xxxx;

IN WITNESS WHEREOF, the parties have hereby affixed their respective signature this ____ day of _______, 20___, in the City of ____________.

1. Project Employment Contract – English Version Soft Copy
2. Project Employment Contract – Filipino / Tagalog Soft Copy