What is a Project Employee?

As held in the case of Filipinas Pre-fabricated Building (FILSYSTEMS), INC VS. FELIPE A. CRUZ, JR., [GR No. 153832, March 18, 2005], 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 or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.”

According to Department (of Labor and Employment) Order No. 19, [April 1, 1993] Series of 1993, the following are considered indicators of project employment:

(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 awaiting 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 form 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.

In D.M. Consunji, Inc. v. NLRC,[ 348 SCRA 441, 447, December 18, 2000,] The Supreme Court has ruled that “the length of service of a project employee is not the controlling test of employment tenure but whether or not ‘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.’”

It is also worthy to note Clause 3.3(a) of Department Order No. 19, which states:

“Project employees whose aggregate period of continuous employment in a construction company is at least one year shall be considered regular employees, in the absence of a “day certain” agreed upon by the parties for the termination of their relationship. Project employees who have become regular shall be entitled to separation pay.

A “day” as used herein, is understood to be that which must necessarily come, although is may not be known exactly when. This means that where the final completion of a project or phase thereof is in fact determinable and the expected completion is made known to the employee, such project employee may not be considered regular, notwithstanding the one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments in the same project or phase of the object.

Considering the above facts and circumstances, what are the rights of a project employee under labor laws if he has been illegally dismissed?

Well settled is the rule that the burden of proving that an employee was lawfully dismissed lies with the employer. Thus employers who hire project employees are mandated to state the actual basis for the project employees’ dismissal.

Section 3.2 of Department Order No. 19, Series of 1993 states that: “Project employees are not entitled to separation pay if their services are terminated as a result of the completion of the project or any phase thereof in which they are employed. Likewise, project employees whose services are terminated because they have no more to do or their services are no longer needed in the particular phase of the project are not by law entitled to separation pay.”

The rights of an illegally dismissed project employee is based only in the current project contract where he was illegally terminated. If the employer fails to prove that the project was already completed, there is a presumption that the services of the project employee has been terminated with no valid cause prior to the expiration of the period of his project employment. In such a case, the illegally dismissed project employee is entitled to reinstatement with full backwages, inclusive of allowances and other benefits. If the project has already been completed during the pendency of the labor suit, the project employee can no longer be reinstated. Instead, he shall be entitled to the payment of his salary and other benefits corresponding to the unexpired portion of his employment, specifically from the time of the termination of his employment, until the date of completion of the project.